Bristow(US:VTOL)2021-08-07 18:25Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 FY2022 was $40 million, an increase of $10 million from $30 million in Q4 FY2021, driven by higher revenues and lower compensation expenses [9] - Revenues increased by $7 million primarily due to higher utilization in oil and gas and government services [10] - Adjusted free cash flow for the current quarter was $39 million, consistent with the average of the previous two quarters, totaling $180 million since the merger [15] Business Line Data and Key Metrics Changes - The company has reorganized its revenue reporting, adding a government services line, which now includes various government contracts [7][20] - Government services revenues showed increased activity, primarily due to higher flight hours and a small benefit from foreign exchange [21] - Oil and gas revenues decreased by $8 million due to lower utilization [14] Market Data and Key Metrics Changes - The company noted a positive outlook for offshore oil and gas activity, expecting significant increases starting next year [16] - The Caribbean triangle region of Trinidad, Guyana, and Suriname is highlighted as a bright spot for the global offshore oil and gas industry, with Bristow holding a leading market position [41] Company Strategy and Development Direction - The company is focused on strategic growth opportunities in government and military services, offshore wind farm support, and advanced air mobility [17] - The company aims to achieve at least $50 million in annual run rate savings from synergy projects following the merger [5] - Asset sales will continue but at a reduced pace compared to the previous year, as the company rationalizes its fleet [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a multiyear recovery in offshore oil and gas activity, with idle aircraft expected to return to work [50] - The company is looking to optimize expenses and improve cash flows through aircraft lease management [51] - Management believes that the second half of 2021 will show improvement compared to the first half [16][49] Other Important Information - The company repurchased approximately 1.5 million shares for $40 million, with $25 million remaining in the share repurchase authorization [6][29] - An impairment loss of $22 million was recognized related to Petroleum Air Services and certain helicopters held for sale [11] Q&A Session Summary Question: Drivers behind strong government services revenues - Management noted a reorganization in revenue reporting, highlighting increased flight hours and additional government contracts [20][21] Question: Future asset sales and revenue trajectory - Management indicated that asset sales will continue but at a slower pace, focusing on maximizing returns from their asset pool [22][25] Question: M&A market outlook - Management remains optimistic about potential consolidation opportunities in the industry, particularly in regions with overcapacity [26][27] Question: Share repurchase authorization status - Management confirmed that $50 million of the $75 million share repurchase plan has been utilized, with $25 million remaining [29] Question: Assets held for sale - Management clarified that the $7.4 million in assets held for sale consists exclusively of helicopters [30] Question: Investment in unconsolidated subsidiaries - Management confirmed that the investment includes Cougar and Lãder, with no current plans to sell [31][34] Question: Fixed-wing business in Australia - Management discussed the transition of Airnorth's fleet, expecting improved EBITDA generation post-transition [36] Question: Offshore drilling updates in Guyana and Suriname - Management highlighted ongoing prolific discoveries in Guyana and similar potential in Suriname, indicating a positive outlook for the region [39][40] Question: Margin improvement concerns - Management explained that margin contraction is primarily due to operating expenses and fuel price increases, with a focus on optimizing costs [44][45] Question: Future revenue upside potential - Management refrained from providing specific financial guidance but indicated significant upside potential through better fleet utilization [54]