Constellation Oil Services (COSH) Q2 2024 earnings summary

Executive summary

• Revenue rose 2.6% year-over-year to $144.3 million in 2Q24, driven by higher fleet uptime and improved day rates from new contracts.

• Adjusted net loss narrowed to $4.6 million in 2Q24 from $8.1 million in 2Q23; adjusted EBITDA increased to $56.8 million with a 39.4% margin.

• Total backlog reached $1.1 billion as of June 30, 2024, with ultra-deepwater contracts comprising 96.3%.

• Net debt decreased by $7.7 million to $866.8 million compared to December 2023.

• Average uptime improved to 98% in 2Q24 from 92% in 2Q23.

Financial highlights

• Operating costs rose 12.8% year-over-year to $90.5 million, mainly due to higher material and personnel costs.

• General and administrative expenses increased 3.4% to $8.0 million in 2Q24.

• Other operating income benefited from the $8.1 million sale of Olindar Star and a $2.0 million reversal of penalty provisions.

• Cash flow from operations was $90.7 million in 2Q24, up from $51.1 million in 2Q23, aided by a $25.7 million mobilization fee.

• Capex rose 72.3% year-over-year to $49.9 million in 1S24.

Outlook and guidance

• Strategic review underway, considering recapitalization and refinancing options; potential post-recapitalization gross debt target of $600–650 million and cash around $100 million.

• No assurance provided that recapitalization or refinancing will occur; subject to market conditions and stakeholder feedback.