Bristow (VTOL) 6 Nov 222023 Q2 Earnings call transcript

Good day, and welcome to the Bristow Group Reports Second Quarter Fiscal Year 2023 Results Call.

As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Mr. Red Tilahun. Please go ahead.

Matti. you, Thank and Fiscal everyone, Bristow Second Group's Good XXXX welcome Earnings of year Call. Quarter morning, to I'm joined Vice Senior and Americas, on Chief the Officer, Corbett; President phone today with and Chief and EMEA Chris Jennifer Executive Willenbacher. Transformation Senior Samantha and of Officer; Alan Sales Executive Stepanek; our of Bradshaw, Vice of Financial Vice President Senior President Chief Dave Whalen, Vice President Officer; President and SAR,

remind like forward-looking detail to that during take subject Before everyone we investor to call, make that in on course opportunity may to begin, our of statements presentation. this of more I'd X are described uncertainties the this are Slide risks management and that

You may our presentation access investor on our website.

non-GAAP free and our EBITDA certain will presentation. such such will now the included of reconciliation investor the also cash to A to release call financial and President GAAP measures is I CEO. turn earnings Chris? in reference as measures our flow. and We over

you, Thank to everyone. call, the and Red, welcome

our safety will company important on most note which always, our safety, the I in very a with Bristow's prepared value achieved good operational again remarks priority. is once and highest The performance quarter. core As begin

and have of to proud personnel are We in industry. pilots, the highly most many technicians experienced skilled the support and

around I backed first for Bristow's world safety programs. all procedures to want Target to team the training by dedication are world-class thank members We our Zero day. operating Safety robust their and culture, every place of continued Bristow

multiyear view that early in oil strengthening in offshore our gas business innings growth and market the The the support are outlook. cycle. fundamentals to of a Turning we the

challenges XXXX the supporting presentation increase few potential our additions improved view as underlying our years over Bristow's significantly. Australia the and risk a slides some gas concerns. of and economic market third-party given of quarter's contract data the Despite year included fundamentals review oil tightening helicopters. outlook. in recession, hand business offshore for and outlook Jennifer? supply full exchange financial plans guidance. a for I foreign CFO activity financial now a business spending dollar government of in significant the in again new once over for global outlook from a these to activity it in business improvements resilient our view A wing This our energy discussion long-term constructive spending the that of that are results XXXX fixed and with is for offshore earnings in for upstream next equipment, an will support the U.S. our summarize energy impact strong including for upstream unfortunately the combined our have muting We these analysts, calendar services improving impacts, we security and levels

will Today, currency. Chris. discussion the a notes begin you, couple Thank with of I on foreign

such located currency foreign continued As many our is are by denominated dollars. hedges many In as by mitigated world, over particularly, around jurisdictions strengthening the affected the few contracts in cases, fluctuations U.S. U.S. dollar's fluctuations quarters. partially in currency Bristow past and natural the we're foreign

particularly fluctuation that ways by However, we're our affected British pound. business, financial are are our in the and pound X the sterling. U.K. to U.K. the There main exposed British results the SAR of

in business. First will some the to on I discuss U.K. our is guidance. with revenues detail initiating through overview related further

for losses gains the items. from primarily are line foreign that noncash exchange gains the reported revaluation the statement. balance other exchange and the losses are, income are and of part, most These foreign income sheet there on Secondly, in

the present exclude adjusted income the in quarter, we is more of the foreign to in reported business. have presented the other I EBITDA to referenced have operations that past, While foreign the clearly this our impact exchange results exchange of starting

in was fees. $XX.X Moving of and Operating with million other to $X.X $X due exclude million, fixed expenses higher personnel expenses to to repairs approximately and primarily primarily first in wing for were sequential administrative year services, and our and XXXX or service in special higher exchange in activity analysis the to an increased Cougar gas asset of revenues items, $X the million, compared were gains collections utilization due oil quarter primarily to higher, of a and second maintenance fiscal expenses. on, million comparison and dispositions timing million General related start Bristow to increased cash decrease foreign results. of I'll adjusted higher professional EBITDA Operating by $XX.X higher due quarter costs, of services $X.X the Africa. financial quarter million.

disposed X or net of for and $X.X of We also gain helicopters a assets other otherwise sold million.

my adjusted comprised which noted in calculation. other income opening gains, have is from our EBITDA noncash of As excluded currency remarks, primarily we foreign

We an the XX. As through we revenues on in guidance our details range announced presentation, to billion of last million dollar to be calendar million foreign with XX rate X.XX. quarter, have of exchange In Slide when the of year the earnings $XXX billion we $X.XX U.S. $X.XXX for to $XXX anticipate an are exchange, XXXX. EBITDA, using and initiated dispositions excluding asset to adjusted average pound

earnings. currency foreign significant a As I effect our noted previously, has on

million. XXXX in exchange calendar approximately year the X.XX rate adjusted For by movement to British dollar example, will U.S. impact pound $X.X EBITDA projected each GBP

than In the we the year approximately with projected currency the fundamentals which adjusted calendar view dollar were the last the months for XX guidance is that to next year. equivalent consistent average British the for million EBITDA is XX% apply midpoint are in for EBITDA, improving our rate business of range $XXX our $XXX million. be pound, addition, adjusted XXXX, that results to U.S. if to would higher the the LTM exchange The range

position. benefit strong liquidity a Bristow from continues sheet balance to Finally, and

with BIH As and of cash of outflows liquidity that funded purchase share PBH after $X.X $XXX available million of of September cash. from related was $XX to our repurchases million, available the XX, million were all $XX.X buy-ins, million

still call for Chris before, stated business this to further we I'll At remarks. will have believe Chris? strong to that generate flows. continue cash back model turn we this time, As the

you, Jennifer. very market Group, significantly. turning while as and for model Era been the continuing is Thank sector. strong was outlook business weather have difficult tailwinds, and for pre-merger see financial positive and challenging last our the cash conditions few to support maintain resilient previous now Nevertheless, a these demonstrated our discipline can headwinds years we case We that have of with business fundamental balance Bristow's improving flow. industry sheet the into The

and increasing is drive a magnitude services While forward. full activity, masking flow the somewhat are offshore improvement, growing this and government gas fixed a robust cash wing the oil of business U.S. recovering we business dollar going confident strong that generation will

market line strength Matti? and leading create avenues present open for position, value We continue believe to let's to growth for the company's questions. multiple that, that the financial opportunities stakeholders. Bristow's With

from Instructions]. first question [indiscernible]. our take [Operator We'll

Just of off of the some services. with dig the wanted we government here. interesting could guys to awards into Clearly, guidance the through won start some new you year. drivers Maybe if

exact You have just the you large throughout the recompete under your drivers belt. expand year? this Can on

in which well to SAR new government month. contract, Coast end the the The primary as Guard year Dutch that the services were contract, winning. began the what you benefit at successful awards That be the growth just Caribbean scheduled our which in of week be of contract the of for includes will is full Thank question. would we last Netherlands the as begin driver this Yes.

growth winning for is addition, the the our But government index. increase In services. new primary that to noted, driver in is our there a in tied contract, which in rate contracts we've the there successful as SAR U.K. inflation been an are

And what opportunities you're then does the the like? are know the others? other pipeline for throughout does year? one Irish at What just like following Are pipeline what award. -- Or there the that look look I point

There there. is an attractive pipeline

We contract. are Irish the in Guard participating the for Coast tender actively

contracts in That other other other for be Defense that like has in regions the will be and We and of growth which We the expect BIH, contract the potentially opportunities places Ministry recently a Cyprus, whether with the is -- new International aspects of Falkland next British U.K. summer, or summer of there Islands. us Helicopters, with U.K. world, that, XXXX, announced or a that. by opportunity Oman. that behind additional acquired Brunei MOD award presents

think of such these some governments that that success other occurred of the look Netherlands the are look to jurisdictions the critical operators that, has there at and and will in other at these Beyond in as Bristow. privatize we services the some to U.K., opportunity

opportunities? those opportunities, assets invest some cover capabilities and just it. other like those things in you with of of some can classes? pursue And to need Or new you transport? Got would get kind asset would your you current Or those into the of opportunities on to any BIH then

in I we mix, up the think award and rescue it will be example, the Netherlands. with for a that search picked

assets. from We are new a in existing Leonardo. bringing using helicopter Also some

Guard Caribbean work, that existing Coast fleet. generation to whether new aircraft. be is the aircraft factory For the work, likely have a delivered we work that to models is government Any support for Dutch require clients conventional new in or helicopters that new that

We in will be electric comes class I that those today. UAVs fleet. forward. as even them we hybrid or of customers government powered expect asset requirement heavily well. in, And term, power, I Aerial relevant of an Unmanned eventually aircraft those think generation, the U.K. will need would order are Vehicle would as going be aircraft that think using some more hydrogen-powered to to into And will solutions bring some new our delivering by used contract some for that if become the we maybe longer SAR

over gas next drivers switching and largest see do and the then the And X? which maybe it. you the year then over Got as regions to oil this side,

areas XXXX, by that of effects gas we more oil U.S. levels be we flights off market business, of do activity. contributing to with But forward offset U.S. the receding. somewhat activity. a in Gulf business positive some reduction our look That's we growing of and Mexico recovering would we a as Nigeria, will search and of be year oil being rescue Mexico aspects the and the in gas Gulf some given think As which see overall, what pandemic next of the COVID of trough-like is are

In a addition, Brazil. successful similarly, going in begins XXXX. commence in to are contracts not in multiyear in rescue Norway. search half And the Equinor new contract winning we latter were in some to mostly contract we September successful Those That and were support of XXXX. recently of until winning

a of latter year to contributor, that oil a of ending the the latter the run year. business gas is stronger next which more of our in half beginning again, So XXXX for speaks be than broader point, and rate which to the half expect of we

given just the the some concerns were elements some were the what buildup, of you looking some risk into doing guidance when you were at? of macro are that What then the outlook, on putting economy? just corridors you're And broader that more that

and Mainly view think is global our challenges on is informed which that customer some security, we about an energy focus increasing supported are base. by what conversations with supply

oil, spot be projections, global year. near-term because, volatility anticipate we expected of less we our a production we that plans the their price we're to excess will specific coming in out in close total capacity projects to the the is think medium- in price and as from So as necessarily deck we challenge but be X% for see long-term this major again, oil global some mostly more we that than spending supply referencing believe pipeline, customers demand issue not from a is which for our disconnected

clear view, that that for increase come to will in So good demand supply. our need need, offshore of our drive from A portion to and there's new will an sources add services. a in

looks destinations? segment? new you wing recovery the the in on How with key Got projects nicely. Is are then there trends it. outwards mining you're coming fixed this like booking And along operations, it's projecting looking,

the One Australia, reopening of pandemic be more in of the and the and major effects borders improvements receding travel occurring. would

and to an people We in them. bookings is now available travel for are opportunity to seeing again increase demand that that,

that's the side. retail So

those companies and or think need rightly you supply Australia Northern well. to opportunities are opportunity have a for whether oil will seeing growth side, are we some gas we charter to Australia required a mining On on continue in be that operating who to as and the I us as see to point meet bring commodities in it's the charter

guidance, EBITDA the just EBITDA for and into gains fixed on losses reasons why presenting adjusted just you then of then and net now? can And the dig

is guidance reasons adjusted foreign we of Sure. that The showing losses. issuance the gains primary the exchange excluding one EBITDA, of and are

areas the be mentioned, flows and like that revenues of in the we ways. As are FX Jennifer are in coming impacted by U.K. various from that Part in our would contracts.

either revaluation which income aspect the statement is negative the through In have really been in balance quarter. income past, or items, our other of those mostly the line. other The noncash upon sheet flow depending positive

over quarters, in However, impact presentation showing of given last some particularly we're EBITDA. couple and generated the the U.S. gains, strong our dollar, those of significant of the have that adjusted

we're exchange. taking with not view on a our guidance, forward, Going foreign directionally

the loss presenting guidance neutral income impact. adjusted to that gain and FX it we're So relates EBITDA as for other

And it. significant operations Got in but U.K. any I then offsets the and you the to the business? obviously, impact, have dollar are get there

do for We from are have European aircraft those order and denominated that consists coming euros. in of an book mostly that manufacturers, were aircraft

We will be dollars. with U.S. purchasing that

financial lead the will in in using over U.S. a of that that at a value. lower if to to better returns bring U.S.-denominated those stronger returns purchases. benefit ultimately -- a fund That we is with asset, we're there life us dollar So and regard capital to the the euro-denominated those

then opportunity. it. air want check And just advanced to Got I on lastly, in mobility

You a in developers. orders guys and working have leader with been

Just the you're curious on currently. Any developments that looking market how just interesting your at view or last quarters. throughout

remain which obviously some mobility, doesn't is aircraft become develop air We expect to potential develop one yet that for we and certified. that but advanced industry as new exist, the about rapidly these of optimistic an

the think the has leader certifications timeline. a well market that aircraft around from XXXX We services and flight to to we're new customer as a these existing base as to new into benefit opportunity as opportunities customers new to We use both providing expand class global operations first the current expect them in that well as our of them in good the incorporate for occur customer. vertical solutions, as Bristow,

we the some of developments, signed additional terms have recently in So partnerships. recent

the about new the they those We supporting means number develop are types potential well And look we as to for do and industry that developers -- them of into it we both as what bring certify a optimistic are market. of asset Bristow. the aircraft, as these them for remain

question We'll next our take from [indiscernible].

many are the shares A left buyback amount? couple how point questions. this One, dollar at on of for program

authorized million We potential have time. $XX a repurchases of have that could used over share and be of total been

remaining? $XX million

Correct.

on Is Or reports? I based is third-party that Chris, a comments Okay. exiting oil your outlook, that you based the than will kick said on start XXXX. What Good. that contracts you regarding to expect based winning into gas think run stronger rate in that on on? that XXXX it XXXX? and you're research going is in,

contracts Yes. Thank you for and the question, John. It's mostly based upon commencing. the ending timing of

So end now we do contract we're servicing expected year. calendar have a end in Guyana the that's at this that to of

On that in contracts latter that half the commenced new the been some have have Brazil in XXXX. we mostly awarded inverse, of

in and new XXXX. rescue which contract for in of September We search Equinor commence will have Norway, a

heavily other of Norway XXXX. and Gulf a ending, a some the Mexico. again, We and show calendar little and of Nigeria by influenced have in those contracts U.K. contracts full bit that of will U.S. the benefit the But really the cadence for because starting full Brazil,

a end 'XX rate beginning. We the the of run will stronger at than see

idea the think mean higher to Could kind the significant I curious range and a you Okay. hours you of us as can in give 'XX how perhaps because higher much I as to be oil of be range hours the you drillers reporting And just might ask gas some any 'XX? results, of how are XXXX? versus I'm some give if before pretty robust upticks. might in much

we're hour providing an not disclosure. So

XXXX. a I It before offshore their contracts to strengthening tend sign is the that services rigs are market case for seeing are would However, procured. our we the throughout drillers note,

than their in be growth gas is the business for But earlier of in support. XXXX. going will see support really will we you emphasize And there I think areas more think year you so to activities do to growth what the for we and helicopter uptick in the and that spend. visibility in gas beginning oil cycle clear is -- a multiyear that is that want mentioned, oil that the in to And I just a demand

helpful. That's Okay.

half to gas the 'XX stronger is the half sector. the and than So fair? of you second in Is going oil first that think be

half do. and be uptick year in back a We clear support. going weighting We to gas of the think oil there's to the

more have And question left. we do one

just So emerged, when COVID you EBITDA. announced you medium-term the ERA-Bristow before targeted right merger million $XXX of

Given your comments industry, cycle? on you of that EBITDA achievable over as the still the strong is fundamentals view in a the level that

those late mean -- Thank put together are Yes. I you obviously, now years question. X that's in the old. for projections XXXX. Those numbers were

we beginning on number, grow profoundly and really providing a has changed will then. without we which X-year see recovery, to beyond. guidance recovery What is we're XXXX that the but a since bridge continue in as So the think XXXX, world to being a of providing stale

I a investor speaks If to would our you look reference overall at there's -- this, slide in upstream deck, spending. which

is in will next that that XXXX, commensurate I the overall levels the think providing recovering and But the guidance relevant in calendar number the is we're shows now, 'XX. pre-pandemic. and an spend increase market slide year is this for with XXXX to deck, to #XX

Boeing, supply other and issues with talk lot and chain the continues particularly Airbus, issues. castings of a some to labor aerospace about

As that all of to available Is longer-term part and spares? of about your Are the concerned are conversation? at ability the selling point? is your contracts, chain service? customers at aircraft supply that a and pool looking Is they your

Thank Josh. Yes. you,

as to idle operation appreciation are cost, longer into they and by to take back will which part at position that that for bring, about conversations And be government the the as are that as there and orders, moment, to eventually an fact some helicopters think absorbed, to that that clearly a I that or with that coming going will need well time our involved, the a needs we will where oil increasing be once the an S-XXs come. future equipment and overabundance. no it for that if existing is of whether in in is as gas, certainly backlog cost all see but be customers becoming for we're of customer we growth, example, don't planning born think really contracts new require we're will

there an in I global yes, constrained point, market. is, we to a are your So appreciation labor force think that

careful more the We will are as market, going is in equipment tightening a absorbed. quickly require forward that and planning getting overabundance

further have at We questions this time. no

everyone. and quarter. safe again well. and you Matti, thanks joining, Talk for you, Stay to Thank next