Yahoo Finance Helix Energy Solutions Group Inc (HLX) (Q1 2024) Earnings Call Transcript Highlights: ...
Revenue: $296 million for Q1 2024, compared to Q1 2023.
Gross Profit: $20 million for Q1 2024, up from $15 million in Q1 2023.
Net Loss: $26 million for Q1 2024, primarily due to pretax losses from extinguishing convertible notes.
Adjusted EBITDA: $47 million for Q1 2024.
Operating Cash Flow: $64 million for Q1 2024.
Free Cash Flow: $61 million for Q1 2024, showing significant improvement from Q1 2023.
Cash and Cash Equivalents: $324 million as of Q1 2024.
Total Liquidity: $419 million as of Q1 2024.
Funded Debt: $328 million as of Q1 2024.
Net Debt: Negative $6 million as of Q1 2024.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you clarify the expectations for the shallow water business EBITDA this year, given the revised revenue projections? A: Owen Kratz, CEO, explained that the initial EBITDA guidance of $30 million to $40 million was set at the time of acquisition. He anticipates exceeding that guidance this year.
Q: Why is the shallow-water business considered seasonal compared to deepwater operations in the Gulf of Mexico? A: Owen Kratz, CEO, noted that the seasonality is primarily due to weather patterns affecting shallow waters, where diving facilities and lift boats are more susceptible to weather conditions, unlike in deeper waters.
Q: Are you observing an increase in leading-edge rates for Well Intervention globally, and specifically in the Gulf of Mexico? A: Owen Kratz, CEO, confirmed that rates are being pushed up, with leading-edge rates approximately 15% higher than previous rates. He also mentioned ongoing negotiations for multi-year commitments which could influence rate structures.
Q: Regarding the Cox bankruptcy, where does Helix stand in terms of securing contracts for the wells being returned to operators? A: Owen Kratz, CEO, indicated that discussions vary by operator. Some operators are well-prepared, though official mandates from the government on specific fields are pending. Work could potentially begin later this year, but most activity is expected in 2025.
Q: How is Helix planning to manage the significant cash balance in terms of shareholder returns and potential investments? A: Owen Kratz, CEO, stated that the priority is to deploy cash for growth in areas that are immediately accretive to shareholder value. The company also has a $200 million facility for share repurchases, which will be utilized depending on the availability of growth opportunities.
Q: What are the prospects and strategies for the Well Intervention business, considering the current market dynamics and asset availability? A: Owen Kratz, CEO, discussed that new asset construction is not viable under current conditions. The focus is on exploring options for existing assets in tight markets, and potential opportunities in the wind farm market and shallow water abandonment services.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
