Bristow(VTOL) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Bristow reported adjusted EBITDA of $67.1 million in Q3 2025, reflecting a strong financial performance despite ongoing supply chain challenges [3][5] - Total revenues increased by $9.9 million, and adjusted EBITDA increased by $6.4 million on a consolidated sequential basis, primarily driven by government services and other services segments [6][10] - The midpoint of Bristow's 2026 adjusted EBITDA guidance represents a 27% increase over the midpoint in 2025, indicating robust growth expectations [5][16] Business Line Data and Key Metrics Changes - Offshore Energy Services (OES) segment revenues and adjusted operating income decreased by $2.4 million this quarter, with lower revenues in Europe and Africa due to reduced utilization [6][7] - Government services revenues increased by $8.4 million, primarily due to the transition of the Irish Coast Guard contract [8][10] - Other services revenues rose by $3.8 million, mainly due to higher activity in Australia [9][10] Market Data and Key Metrics Changes - The fleet status for offshore-configured helicopters remains near full effective utilization levels, with tight supply dynamics supporting a positive outlook for the sector [4][16] - The U.S. market is stable with less ad hoc work, while Brazil, Africa, and the Caribbean are experiencing growth [26][27] Company Strategy and Development Direction - Bristow is focused on enhancing its government services business and transitioning to new contracts, with expectations of improved profitability in 2026 [4][12] - The company is also investing in advanced air mobility, with ongoing trials and partnerships aimed at commercializing all-electric and hybrid aircraft [39][52] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for offshore energy services activity, anticipating increased capital investment in deep-water projects [3][47] - Supply chain challenges are impacting aircraft availability, but the company expects working capital to improve as these constraints subside [13][37] Other Important Information - Bristow's unrestricted cash balance was approximately $246 million, with total available liquidity of $313 million [13][14] - The company made an additional $25 million of accelerated principal payments on the UKSR debt facility, totaling $40 million for the year [14][15] Q&A Session Summary Question: Guidance on OES and market implications - Management acknowledged tightening guidance due to persistent supply chain challenges affecting aircraft availability and fewer contracts in the North Sea and U.S. [21][22] Question: Outlook for main OES markets - Management highlighted Brazil, Africa, and the Caribbean as growth markets, while the North Sea is experiencing softer activity [25][26] Question: Vendor credits and their impact - Management explained that higher vendor credits this quarter were due to increased activity and various factors related to aircraft purchases and maintenance contracts [28][29] Question: Aircraft delivery and deployment - Management detailed pending deliveries, including five aircraft for government services and seven offshore-configured AW189s, with expected deployment in Brazil, Africa, and the North Sea [33][36] Question: CapEx outlook for 2026 - Total CapEx for 2026 is projected at $100 million, with expectations of approximately $140 million in free cash flow at the midpoint of guidance [38] Question: Advanced mobility trials progress - Management reported positive progress in advanced mobility trials, including a sandbox project in Norway with Beta Technologies [39][52] Question: Asset sales and future activity - Management discussed opportunistic asset sales and potential sale-leaseback transactions for older assets [42][44] Question: Future tax outlook - Management indicated that a one-time tax benefit was realized this quarter, with expectations of a normalized tax rate as profitability improves [45][46] Question: Focus on exploratory drilling by customers - Management confirmed that while their business is primarily focused on production support, there is an increasing share of capital investment in deep-water projects [47][48]