Civeo(US:CVEO)2025-02-27 17:29Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $151 million, with a net loss of $15.1 million or $1.10 per diluted share, compared to a net loss of $17.1 million for the full year 2024 [18][20] - Adjusted EBITDA for Q4 2024 was $11.4 million, a decrease from $106.5 million in 2023, primarily due to lower build rooms in Canadian lodges [19][20] - For the full year 2024, revenues were $682 million, with adjusted EBITDA of $79.9 million, down from $106.5 million in 2023 [20][21] Business Line Data and Key Metrics Changes - Australian segment revenues increased by 23% to $110 million in Q4 2024, driven by increased integrated services activity [22] - Canadian segment revenues decreased to $40.7 million in Q4 2024 from $72.7 million in Q4 2023, with adjusted EBITDA turning negative at -$4.7 million [24] Market Data and Key Metrics Changes - In Australia, build rooms totaled 637,000, remaining flat year-over-year, while daily room rates increased from $74 to $77 [22] - In Canada, build rooms decreased to 360,000 from 617,000, with daily room rates slightly decreasing from $95 to $94 [24] Company Strategy and Development Direction - The company is focusing on diversifying revenue streams and expanding its asset-light business, particularly in Australia, with a goal of achieving AUD 500 million in integrated services revenues by 2027 [16][39] - In Canada, the company is rightsizing its operations due to reduced capital spending and is looking to expand geographically and into new end markets [10][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medium to long-term outlook despite current challenges in Canada, citing potential growth from LNG projects and carbon capture initiatives [11][42] - The company anticipates a challenging 2025 in Canada but remains committed to strategic actions to improve performance [43][44] Other Important Information - The company returned approximately $44 million to shareholders in 2024, representing 65% of free cash flow, and plans to continue opportunistic share repurchases [11][29] - The company announced a quarterly cash dividend of $0.25 per share, payable on March 17, 2025 [30] Q&A Session Summary Question: Details on asset-light versus asset-intensive businesses - The asset-intensive side includes catering and facility management at owned assets, and the integrated services side is expected to be the area of growth [50][52] Question: Seasonal distribution expectations for 2025 - The company expects a normal seasonal distribution, with 60% to 65% of full-year EBITDA generated in the second and third quarters [56] Question: Visibility of Canadian revenue streams - Historically, turnaround activity in Canada accounts for about 25% to 30% of total room nights, which is expected to continue [58] Question: Long-term impact of political uncertainty in Canada - Management views the current customer behavior as a long-term shift, necessitating adjustments to the cost structure [66][68] Question: Impact of economic weakness in China on Australia - Despite softening prices, customer demand for rooms remains strong, and long-term contracts are still being pursued [74] Question: Acquisition details and market pricing - The acquisition price was favorable due to the company's ability to pay cash and the seller's desire for a straightforward transaction [87] Question: Free cash flow and shareholder returns - The company plans to maintain a framework for returning free cash flow to shareholders while pursuing growth opportunities [95] Question: Managing costs in the Canadian business - The company has rightsized its business for current realities and will continue to monitor and adjust its cost structure as needed [98]