Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sea1 Offshore Inc (FRA:S5H0, Financial) reported a significant increase in revenue, reaching $108 million, up from $88.8 million in the same quarter last year.
- The company delivered a strong EBITDA of $52 million, reflecting an uptick in the market.
- All 17 fully owned vessels delivered a positive EBITDA margin.
- The company has a firm contract backlog of USD841 million, with an additional $600 million in options.
- A dividend payment of NOK5 per share has been authorized by the Board, reflecting strong financial performance and outlook.
Negative Points
- Net financial items were negative by $16.2 million, including a currency loss of $12.6 million.
- The North Sea market was slightly below expectations due to less drilling activity than predicted.
- There was a negative effect in the first quarter for the Subsea segment as two vessels were at dry dock.
- The company experienced a net currency effect loss of $4.8 million due to the depreciation of the Brazilian currency.
- The spot market for anchor handlers and PSVs was penalized by lower-than-expected drilling activity.
Q & A Highlights
Q: Can you provide an overview of the financial performance for the second quarter of 2024?
A: The company reported $107.6 million in revenue, up from $88.8 million in the same quarter last year. EBITDA for the quarter was $52.2 million, an increase from $45.9 million. This reflects a continuation of the positive market trend that has lasted for over two years. (Respondent: Vidar Jerstad, CFO)
Q: What were the pro forma figures for Sea1 Offshore, excluding the vessels sold?
A: Pro forma operating revenue was $74.3 million, with operating expenses at $32.6 million and G&A expenses of $6.5 million, resulting in an EBITDA of $35.2 million. Operating profit was $141.5 million, and net profit after taxes was $124.5 million. (Respondent: Vidar Jerstad, CFO)
Q: Can you elaborate on the recent vessel sales and their impact?
A: Sea1 Offshore completed the sale of nine vessels on July 5, 2024. This transaction resulted in a 35.7% share in Siem Sustainable Energy and $117.5 million in debt. The repurchased shares were canceled immediately. (Respondent: Bernt Omdal, CEO)
Q: What is the current status of the company's debt and refinancing efforts?
A: The company repaid $69 million in debt maturing in 2024 and existing loans with longer maturities. Two new credit facilities totaling $150 million were entered into. This has improved the company's financial position significantly. (Respondent: Vidar Jerstad, CFO)
Q: What is the contract backlog and future outlook for Sea1 Offshore?
A: The firm contract backlog stands at $841 million, with an additional $600 million in options. The largest part of the backlog is related to the subsea fleet. The company expects higher rate levels and more term opportunities, particularly for the anchor handler segment. (Respondent: Bernt Omdal, CEO)
Q: How has the fleet composition changed recently?
A: Sea1 Offshore now has 17 fully owned vessels, 12 vessels under management, and one vessel on bareboat. The fleet includes various types of vessels such as anchor handlers, offshore construction vessels, well intervention vessels, PSVs, oil spill recovery vessels, and fast crew vessels. (Respondent: Bernt Omdal, CEO)
Q: What are the key operational highlights for the quarter?
A: The company operated 30 vessels with an 87% fleet utilization rate. Contracts were signed for the oil spill recovery vessel Siem Marataizes and the anchor handler Siem Emerald. The agreement to sell nine vessels to Siem Sustainable Energy was also finalized. (Respondent: Bernt Omdal, CEO)
Q: What are the market conditions and outlook for the offshore support vessel segment?
A: The second quarter showed strength in the offshore support vessel segment, with several contracts and transactions indicating market optimism. The North Sea market was slightly below expectations, but Australia and South America contributed positively. The outlook remains positive across all segments. (Respondent: Bernt Omdal, CEO)
Q: What is the company's dividend policy following the strong results?
A: On the back of solid results, a strong balance sheet, and a positive outlook, the Board has authorized a dividend payment of NOK5 per share. (Respondent: Bernt Omdal, CEO)
Q: Are there any significant subsequent events to note?
A: Yes, the nine vessels were handed over to Siem Sustainable Energy on July 5, 2024. Additionally, the company completed refinancing parts of its debt, and two new credit facilities totaling $150 million were entered into. (Respondent: Bernt Omdal, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
