Civeo(US:CVEO)2024-04-26 17:33Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were $166.1 million, with a GAAP net loss of $5.1 million or $0.35 per diluted share [57] - Adjusted EBITDA for the first quarter was $17.3 million, reflecting a significant increase due to higher billed rooms and improved margins [57][58] - Operating cash flow was $6 million and free cash flow was $7.2 million [28] Business Line Data and Key Metrics Changes - Australian segment revenues increased to $91.7 million, up from $77 million in Q1 2023, with adjusted EBITDA rising 43% to $20.3 million [76] - Canadian segment revenues decreased to $67.2 million from $89.5 million in Q1 2023, with adjusted EBITDA dropping to $5.5 million from $12 million [77] - Billed rooms in Australian owned-villages reached 614,000, a 17% increase from 523,000 in Q1 2023 [29] Market Data and Key Metrics Changes - The average daily rate for Australian villages in US dollars was $77, down from $78 in Q1 2023 due to a weakened Australian dollar [29] - Billed rooms in Canadian lodges totaled 610,000, down from 643,000 in Q1 2023 [92] Company Strategy and Development Direction - The company aims to grow its Australian integrated services business to AUD 500 million by 2027, focusing on operational improvements and innovation [12][55] - Capital allocation strategy includes returning capital to shareholders through dividends and share repurchases while evaluating growth opportunities [12][78] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter and full year outlook for 2024 were in line with expectations, maintaining full year guidance [7] - The company is optimistic about growth in the integrated services side, with expectations to exceed budgeted revenue [17] - Inflation remains a concern, particularly regarding food and labor costs in Australia [93] Other Important Information - Capital expenditures for Q1 2024 were $5.6 million, up from $4.8 million in Q1 2023, primarily for maintenance and activation of Australian village rooms [10] - Total liquidity as of March 31, 2024, was approximately $136.9 million [30] Q&A Session Summary Question: What are the drivers between the low and high end of full year guidance? - Management indicated that the Canadian turnaround season significantly influences guidance, with expectations for better occupancy in Canadian lodges and strong performance in Australian villages [82] Question: Can you elaborate on uses of cash and criteria for potential M&A? - The company prioritizes dividends and opportunistic share buybacks while seeking growth opportunities that exceed the returns from stock repurchases [64] Question: Is there more near-term growth expected in Australia? - Management expressed optimism for continued growth in accommodations and food revenue, with ongoing contract renewals and new contracts expected [84] Question: What are the risks associated with the renewed contracts in Australia? - Management acknowledged the need for consistent service delivery to maintain customer relationships and mitigate risks associated with contract cancellations [68] Question: What is the status of the McClelland Lake Lodge transportation contract? - The transportation contract was completed in Q1, and the company is pursuing reinstallation of assets at a new location in the Western US [87]