Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Australia's adjusted EBITDA increased by 19% from the third quarter of 2023, driven by strong performance in owned villages and integrated services.
- Civeo Corp (CVEO, Financial) announced a 33-month contract renewal with a major Canadian oil sands producer, expected to generate CAD150 million in revenue.
- The company returned $17.8 million to shareholders through dividends and share repurchases in the third quarter.
- Civeo Corp (CVEO) has tightened its full-year 2024 revenue and adjusted EBITDA guidance, indicating confidence in financial performance.
- The Australian segment showed significant growth, with revenues up 33% year-over-year, supported by increased customer demand and competitive wins.
Negative Points
- The Canadian segment experienced a decline in revenues and adjusted EBITDA due to the wind-down of LNG-related activities and wildfire-related disruptions.
- Civeo Corp (CVEO) reported a net loss of $5.1 million for the third quarter of 2024.
- The Canadian segment's billed rooms decreased significantly year-over-year, impacted by wildfires and the sale of McClelland Lake Lodge.
- The company faced challenges in Canada with lower than expected performance due to external factors like wildfires.
- Civeo Corp (CVEO) anticipates a sequential decline in billed rooms in Canada for the fourth quarter due to seasonal factors and previous disruptions.
Q & A Highlights
Q: Can you discuss Civeo's M&A strategy and potential markets for expansion?
A: Bradley Dodson, President and CEO, explained that Civeo is looking to grow its core operations in Western Canada and owned villages in Australia. Additionally, they are exploring geographic expansion in North America, particularly in Eastern Canada and the US, and expanding their integrated services business in Australia beyond natural resources.
Q: How much of Civeo's Canadian business for next year is highly visible or contracted?
A: Bradley Dodson noted that about 60% of the billed rooms in Canada are typically contracted, with some under exclusivity agreements. For 2025, they expect billed rooms to be relatively flat year-over-year, with a significant portion already visible or contracted.
Q: Can you quantify the impact of the Canadian wildfires on Q3 results?
A: Bradley Dodson estimated the impact at roughly 30,000 room nights in turnaround activity, equating to approximately $3 million. Despite this, the Australian integrated services business performed strongly, offsetting the wildfire impact.
Q: What is the outlook for Civeo's integrated services business in Australia?
A: Bradley Dodson highlighted that the integrated services business in Australia is expected to grow significantly, with a target of AUD500 million by 2027. This growth is driven by winning new work and expanding existing customer relationships.
Q: Are there growth opportunities outside of energy in Canada and the US?
A: Bradley Dodson mentioned that while most opportunities are still resource-related, Civeo is exploring possibilities outside of resources in the long term, leveraging their expertise in taking care of people.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
