Example blog

Tidewater: Profits up, red ink down

Written by

Nick Blenkey

Image: Tide

“Tidewater is uniquely positioned to capitalize on what appears to be a truly transformative time for vessel activity and improved daily rates over the coming quarters,” said CEO Quintin Kneen as offshore services giant Houston-based Tidewater Inc. (NYSE: TDW). announced its results for the quarter ended March 31, 2022

Profit was $105.7 million, compared to $83.5 million for the same quarter last year. Net losses were $12.2 million, compared to $35.3 million for the quarter ended March 31, 2021.

Excluding charges, Tidewater would have reported a net loss for the quarter of $11.7 million and a net loss of $35.2 million in the prior year quarter.

In other highlights:

  • the average active fleet increased by 6 vessels during the quarter and active utilization remained strong at 82.5%
  • the average daily rate rose to $10,687; the highest since the fourth quarter of 2020
  • gross margin at vessel level increased from 24.7% to 34.0% and global fleet utilization increased from 52.9% to 70.9% compared to Q1 2021

“Over the past few years, we have implemented a multi-faceted strategy to create meaningful and lasting value at Tidewater,” Kneen said. “Recognizing the cyclical nature of our highly fragmented and capital-intensive industry, we have focused on several priorities to prepare the business to weather lean times successfully, while being well positioned to capitalize on the inevitable upturns. of the cycle when they happen… With a strong team and an efficient cost structure and operations, we were then in a good position to address the balance sheet of the business, and we are proud that Tidewater now has the capital structure strongest, most liquid and most flexible in the industry. Finally, with all of these pieces in place, Tidewater is well positioned to act strategically, acquire the best assets to complement our global fleet and capitalize on improving industry momentum and generate sustainable value. The acquisition of Swire Pacific Offshore that we completed in April is transformational as Tidewater is now the undisputed industry leader at a time when demand for high quality offshore vessels is poised to dramatically outpace available supply.

Commenting further on the supply of vessels in the market, Kneen said: “Since the onset of the offshore energy downturn in 2014, very few new vessels have entered the market and existing vessels have aged or been retired. service. Many industry operators have struggled to survive under the burden of high debt levels, low daily rates and inefficient operations. As a result, the available supply of high-quality PSVs has shrunk dramatically over the past eight years, so that only around 30 remain to be reactivated worldwide.

“Prolonged underinvestment in offshore hydrocarbon infrastructure began to drive increased demand for offshore oil and gas activity in the second half of 2021, and this demand has been compounded by recent geopolitical issues. The demand for offshore wind energy infrastructure also continues to accelerate. As a result, the demand outlook for OSV to support these offshore energy activities has begun to accelerate significantly. We are already seeing this impact in the market, but the most significant improvements will materialize over the next few quarters as this demand quickly eclipses available supply. For example, during the first quarter of 2022, we entered into contracts of various durations for 16 vessels with charter dates starting after the first quarter. The average daily rate improvement on contracts for these vessels over their previous contracts is over 20%, with our largest PSVs in this group achieving an average daily rate improvement of almost 30%. We believe that the daily rate improvements are a clear signal of fundamental shifts in ship supply and demand, and that as additional tenders continue and existing contracts expire, the upward acceleration of daily rates will continue.

“Everything we’ve worked on over the past few years has allowed us to thrive in all market conditions, and now that the market is improving rapidly, we’re ready to capitalize.”


Source link