Civeo (CVEO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues were $176.3 million, with a net loss of $5.1 million, driven by lower Canadian activity and higher costs, partially offset by 33% revenue growth in Australia.

• Canadian segment underperformed due to lower lodge billed rooms, wildfires, and LNG and mobile camp activity declines, while Australian segment Adjusted EBITDA rose 19% year-over-year.

• Announced a 33-month contract renewal with a major Canadian oil sands producer, valued at approximately CAD $150 million through June 2027.

• Returned $17.8 million to shareholders via dividends and share repurchases in Q3; board renewed share repurchase program for up to 5% of shares.

• Tightened 2024 revenue guidance to $675–$700 million and Adjusted EBITDA to $83–$88 million.

Financial highlights

• Q3 2024 revenues were $176.3 million, down 4% year-over-year; net loss was $5.1 million ($0.36 per diluted share) versus net income of $9.0 million in Q3 2023.

• Adjusted EBITDA for Q3 was $18.8 million, down 45% year-over-year; operating cash flow was $35.7 million; free cash flow was $28.3 million.

• Year-to-date Adjusted EBITDA was $68.5 million (down 22%), but operating cash flows rose 31% to $74 million.

• Q3 CapEx was $7.5 million, mainly for maintenance; share repurchases totaled $14.2 million.

• Cash and cash equivalents at September 30, 2024: $17.9 million; total liquidity: $211.8 million.

Outlook and guidance

• 2024 revenue guidance narrowed to $675–$700 million; Adjusted EBITDA to $83–$88 million; CapEx expected at $30–$35 million.

• Free cash flow projected at $50–$60 million for 2024.

• Preliminary 2025 Adjusted EBITDA expected to exceed $90 million, with Australia driving growth and Canada expected to be flat.

• No material wildfire impact expected in Q4; Q4 to see typical seasonal decline in Canada, offset by some recovery.

• Inflationary pressures and labor shortages, especially in Australia, are expected to continue impacting costs.