“We are executing on the plan we laid out on the first quarter call after reassessing our business outlook as a result of the pandemic,” said Quintin Kneen, President and CEO of Tidewater (NYSE:TDW) as the offshore services major released results for the three and nine months ended September 30, 2020. “As of the third quarter we were positive cash flow from operations and free cash flow positive for the nine-month period. We are dedicated to remaining free cash flow positive for the year, and we are repositioning our shore base operations and our fleet so our business can remain free cash flow positive under the currently depressed market conditions.”
Tidewater reported revenue for the three and nine months ended September 30, 2020, of $86.5 million and $305.2 million, respectively compared with $119.8 million and $367.8 million, for the equivalent periods last year. Net losses for the three and nine months ended September 30, 2020, were $37.9 million ($0.94 per share) and $167.0 million ($4.15 per share), compared with $44.2 million ($1.15 per share) and $81.9 million ($2.17 per share) for last year’s equivalent period.
Excluding impairment charges, Tidewater would have reported a net loss for the three months ended September 30, 2020 of $35.3 million ($0.87 per common share) and a net loss for the nine months ended September 30, 2020 of $42.6 million ($1.06 per common share).
“Tidewater generated $30.0 million of free cash flow in the third-quarter, its best quarterly performance since its restructuring in 2017,” commented Kneen. “That cash was used to repurchase $27.7 million of our outstanding bonds at 95% of par, and we completed the quarter with $33.7 million of net debt. We recently launched a tender for another $50.0 million of the bonds at 100.5% of par, and we simultaneously launched a consent to relax the financial covenants in 2021.”
Kneen noted that the operational impact of the pandemic and overall lower market demand had been severe and challenging.
“Domestic and international travel restrictions have started to ease in some regions, and as a result we have been able to improve the frequency of crew changes and allow our mariners to return home safely to their families and to more easily return to work,” said Kneen. “The situation remains far from solved, however, and we continue to urge global government coordination to support open travel for seafarers as designated key workers. For 2020, we continue to see the additional costs associated with managing the travel inefficiencies to be approximately $20.0 million, and this is in addition to the decreased level of profitability from lower overall demand.
“Another key element to our strategy is high-grading our fleet through strategic acquisitions and disposals. We disposed of 22 vessels in the third quarter for $10.6 million and early in the fourth quarter we made an acquisition of 11 modern crew boats for $5.3 million.”