Tidewater: momentum continues says Kneen
Written by Nick Blenkey
Tidewater president and CEO Quintin Kneen says trends point to “as compelling of a long-term market backdrop for our business as we have ever seen.
Quintin Kneen, president and CEO of offshore services giant Tidewater Inc. (NYSE:TDW), said he is “encouraged by the continued momentum we saw during the first quarter” as the company released its results for the quarter ended March 31, 2023. Highlights included:
- Revenue of $193.1 million; Highest quarterly revenue since fourth quarter of 2015; an 83% increase over the first quarter of 2022
- Highest quarterly global average day rate since third quarter of 2015
- Net income of $10.7 million, or $0.21 per share
- Adjusted EBITDA of $59.1 million; Highest quarterly EBITDA since third quarter of 2015
- Quarter-end net debt balance of $4.3 million
DAY RATES CONTINUE UPWARD
“We are encouraged by the continued momentum we saw during the first quarter and the new cyclical revenue and global average day rate high-water marks, especially for what is anticipated to be the slowest quarter of the year due to seasonality in certain markets,” said Kneen. “Consolidated global average day rates continued the upward trend we saw throughout 2022, with the average day rate increasing nearly $1,100 per day sequentially. In addition, each individual geographic region increased its average day rate during the quarter. Also, all individual vessel classes except the 4-8k AHTS class increased in average day rate during the quarter. Seasonality did play a factor during the quarter as activity in the North Sea and the Mediterranean declined sequentially though, notably, we did see net day rate improvements in these markets during the quarter.
“The first quarter is typically the slowest calendar quarter of the year due to harsher weather conditions, calendar year budgets and the contracting habits of some of our global customers,” continued Kneen. “This year we used the period to reposition vessels and to perform as many dry docks as possible so that we can maximize the utilization and profitability during the higher activity periods we typically see in the second and third quarters. Incidentally, we anticipate a stronger fourth quarter than third quarter, which is atypical, but representative of a market strengthening in excess of the typical calendar year seasonality. The repositioning in the first quarter resulted in disproportionally higher dry dock cost and idle time. Dry dock days were up approximately 41.0% from the fourth quarter and drydock spend was approximately $31.0 million. Our forecasted dry dock spend for the year remains unchanged at $77.0 million. Similar to what we are expecting in the fourth quarter of this year, first quarter revenue actually increased over the fourth quarter, as the $1,100 increase in the global average day rate overtook the active fleet utilization decrease of 1.9 percentage points.”
Kneen noted that the company’s $557 million acquisition of Solstad Offshore’s 37 PSVs is expected to close by the end of the second quarter.
OUTLOOK
Looking ahead, Kneen said: “As we survey the market and evaluate the momentum that built during the quarter, particularly as we moved beyond the seasonally slow period of the quarter, we remain confident in our outlook for 2023. As such, we reiterate our 2023 annual guidance of $900 million of revenue and approximately 50.0% vessel operating margin for the legacy Tidewater business and reiterate our updated pro forma 2023 guidance of $1.03 billion of revenue and approximately 50.0% vessel operating margin which contemplates closing the Solstad PSV acquisition by the end of the second quarter of 2023.”
- Download the full Tidewater results release HERE
