Civeo(US:CVEO)2024-02-29 19:42Financial Data and Key Metrics Changes - In Q4 2023, total revenues were $170.8 million, with GAAP net income of $23 million or $1.55 per diluted share, and adjusted EBITDA of $17.4 million [42][39][56] - For the full year 2023, revenues totaled $700.8 million, net income was $30.2 million or $2.01 per diluted share, and adjusted EBITDA decreased to $102 million from $112.8 million in 2022 [56][39] - The total debt outstanding as of December 31, 2023, was $65.6 million, a decrease of $37.7 million from September 30, 2023 [45][86] - Free cash flow for 2024 is expected to be in the range of $45 million to $60 million [61] Business Segment Data and Key Metrics Changes - The Australian segment saw revenues of $89.3 million in Q4 2023, up from $73.1 million in Q4 2022, with adjusted EBITDA increasing 64% to $21.5 million [44][39] - The Canadian segment reported revenues of $72.7 million in Q4 2023, down from $88 million in Q4 2022, with adjusted EBITDA decreasing to $3.4 million from $11.8 million [49][84] Market Data and Key Metrics Changes - Australian billed rooms increased to 638,000 in Q4 2023, up 23% from 519,000 in Q4 2022, indicating strong demand [85] - The average daily rate for Australian villages in US dollars was $74 in Q4 2023, slightly up from $73 in the same quarter last year [85] Company Strategy and Development Direction - The company aims to grow its Integrated Services business in Australia to $500 million in revenues by 2027, leveraging existing infrastructure and pursuing new contracts [82][93] - The capital allocation strategy focuses on returning capital to shareholders while maintaining a target leverage ratio of 1.0 to 1.25 times [59][86] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Australian business, citing strong performance and margin improvements, while acknowledging macroeconomic factors [4][39] - The Canadian segment is expected to be a transition year, with improved macroeconomic conditions anticipated for oil sands and increased customer capital spending [62][90] Other Important Information - The company completed the sale of the McClelland Lake Lodge in January 2024, with proceeds recognized in Q4 2023 [41][53] - A quarterly dividend of $0.25 per share was declared, payable on March 18, 2024 [46] Q&A Session Summary Question: What is the outlook for Australia? - Management is constructive on the Australian business, expecting continued strength in occupancy and integrated services [4][39] Question: Any changes to target range or uses of capital? - The company is focused on growth opportunities and may increase leverage to pursue accretive growth [10][86] Question: What is the expected cadence of cash flow? - The company anticipates a typical seasonal pattern, with Q1 being the lowest cash flow quarter [26][32] Question: How is the integrated services business performing? - The integrated services business has seen significant margin improvements due to inflation mitigation efforts, with a goal to reach $500 million in revenues by 2027 [82][93]