Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bristow Group Inc (VTOL, Financial) raised its adjusted EBITDA guidance for full year 2024 to $220 million to $230 million, indicating strong financial performance.
- The company reported a 96% increase in operating cash flows, illustrating improved financial health.
- Positive demand trends and a tight supply of offshore helicopters are expected to improve margins, free cash flow, and capital returns.
- Bristow Group Inc (VTOL) has funded 60% of the capital investments needed for UK and Irish Coast Guard contracts, with the remaining expected to conclude in the next two quarters.
- The company maintains a strong balance sheet and liquidity position, with available liquidity of $260 million as of September 30.
Negative Points
- EBITDA adjusted to exclude special items decreased to $60.2 million for Q3 2024 from $71.3 million in the preceding quarter.
- Operating expenses increased by $16.3 million due to higher operating personnel costs, repairs, and maintenance.
- Lower utilization in Americas Offshore Energy Services contributed to a decrease in operating revenues.
- Supply chain challenges continue to impact the company, causing delays in parts delivery and repairs.
- The company experienced a decrease in utilization within the Americas region due to a completed project in Suriname and changes in accounting for Kouger.
Q & A Highlights
Q: Can you elaborate on the factors behind the recent decrease in utilization within the Americas region and provide insight into your underlying assumptions for the Americas specifically?
A: Jennifer Whalen, CFO, explained that the decrease was primarily due to a change in accounting for Kouger and the completion of a project in Suriname. CEO Christopher Bradshaw added that despite these factors, they remain positive about utilization and growth potential in the Americas, citing promising exploration plans in Suriname and expected growth in Brazil.
Q: Could you break down the components of the $16 million increase in operating expenses and provide guidance on these costs moving forward?
A: Jennifer Whalen, CFO, stated that $13 million of the increase was due to personnel costs, with the remainder attributed to repairs and maintenance and other expenses related to new contracts, particularly in the search and rescue business.
Q: What are the current thoughts on the 2025 outlook given the momentum and raised guidance for 2024?
A: Jennifer Whalen, CFO, noted that 2025 will involve operationalizing the Irish Coast Guard and UK SAR2G contracts while continuing offshore energy operations. Significant increases in adjusted EBITDA are expected in 2026 as these contracts become fully operational.
Q: How will the remaining funding for the new government contract CapEx be managed, and what impact will it have on liquidity and leverage?
A: Jennifer Whalen, CFO, explained that funding will primarily come from upsized facilities for UKSAR and Irish Coast Guard contracts, which will increase leverage over the next quarters but will stabilize as significant CapEx concludes.
Q: Is there any update on the capital allocation strategy as the investment phase concludes and contracts are implemented?
A: Christopher Bradshaw, CEO, emphasized the focus on maintaining a strong balance sheet, funding organic growth opportunities, and potentially returning capital to shareholders through share repurchases or dividends once major government projects are funded by early 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
