Bristow (VTOL) 7 Aug 242024 Q2 Earnings call transcript

Good day, everyone, and welcome to Bristow Group reports second quarter 2024 investor call. Today's call is being recorded. [Operator Instructions] At this time, I would like to turn the call over to Red Tilahun, Senior Manager of Investor Relations and Financial Reporting.

Thank you, Robbie. Good morning, everyone, and welcome to Bristow Group's second quarter of 2024 earnings call. call Bradshaw; our and and Officer, Whalen. the Executive and Chief on Jennifer Chris Officer, Senior joined today President with Chief Financial I'm Vice President

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

presentation on our You may access our investor website.

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

detailed for guidance more second the continued around multi-year world will highest increased now cycle. I a Thank our growth of hand and to conjunction outlook you, quarter, Red. on in financial their I a also focus operational XXXX in results, these to EBITDA. In that of performance want are increase safety over I want core are the aligned our with stages quarter. in on all Jennifer? we is year good and team adjusted we for company's QX, CFO in for priority, early the QX results we full to and ranges. pleased it thank builds with the to Bristow XX% This our last XXXX. review to raise value, contributions by the shared conviction our results highlighted in their sequential very our the quarter for thanking begin #X safety, team resulted and which Bristow's members the by global strong

increased to the with an quarter, Thank items, for exclude you, results. increase was Chris. offset service by government quarter approximately $XX.X Lower energy primarily adjusted million. Operating partially to current rates $XX.X the dispositions, higher and Fixed EBITDA leasing higher, I Bristow's first million, in and of or to utilization $X.X revenues other in Wing repairs the professional in increased maintenance financial million $XX.X compared asset and and special higher fees. quarter. by and due and offset administrative million offshore were were costs begin higher second services. Operating equipment were exchange lower XXXX, $XX.X million personnel $X.X operating the sequential due expenses services, expenses foreign expenses. General of will to primarily comparison and of partially million Today,

gains is other income comprised As noted of primarily in calculation. EBITDA item non-cash excluded line and our foreign which earnings calls, we've the expense previous from currency and adjusted losses,

venture positive XX% the the forward. and current are note, stable is change cash-basis lease Our consistent of in our include from per global from more methodology the the in These benefit $X.X reserve. cost payments revenues rate tax adjustment tax lease Cougar, compared Cougar, quarter-specific will and few attributable the going an equalization for for our QX. to joint results. The accrual from QX basis a to in to our year. an accounting transition in items benefit mix The effective XX% earnings. Of a decrease is an million personnel an tax these Norway, of of the which approximately in to aggregate, have Suriname, rate release results of in in resulted in benefited accounting for year, there effective our Canada, recognition for benefit items earnings financial stabilization of prior In in changes seasonal quarter insurance

$XXX the rest year, our to EBITDA of million. forecast quarter's XXXX for and earnings million we have review the to $XXX adjusted second As a result of the guidance raised of the the

adjusted EBITDA for In The XXXX addition, we is million factors. driven to have to several $XXX increase by million. $XXX estimates being our raised

over has of most region XXXX are XXXX. quarter rates Africa. and the into in expected to rest impactful and utilization This and higher First and last well the continue is perform outperformed throughout to

OES the first during from business benefited of ad higher hoc U.K. Our activity XXXX. half

expected is scheduled Fixed that transport, increase activity. to in the as However, well of as reduce higher saw half in yields charter second business Wing short-term in XXXX. The passenger a

are business second helicopter This that These rates. the be parts and guidance with are supply noted, reduce half to benefited delayed business. the Our XXXX. of attractive factors Services OEM. Due positive able availability America's are by penalties primarily due OES the related the and in we our These increase to Government to chain penalties expected availability from for drivers I to challenges, repairs projects namely partially is to offset year. in XXXX from to pleased short-term

for presentation. XXXX are targets details Further and unchanged. the Our Slides on X X remain available of

updates recent on to expenditures SAR capital on Moving new contract. for our

capital a million As approximately Irish award contracts we in $XXX the last have successful earnings the to Guard. investment presentations, with U.K. several and noted related Coast we of of have our

As year, second of of an little have we SAR Irish $XXX very the the quarter, half just financing our contracts. earlier million, a U.K. or to important Guard The needed and support completed EUR With XXX X million the NatWest total for fund are and financing positioned financing Coast attractive new contract. with with for used rates. additional the capital we facility to Export will this end United of to we upsize investment is these that completed Kingdom up the over well July, Bank very be required. In the of this the

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

cash our liquidity that generate of generated believe before, over continue turn to call QX. for as flow was back June million model in further business remarks. And we Chris? this strong free Chris time, the of we will have flows. At million. $XXX stated adjusted available $XX our I'll cash We As to XX,

Thank you.

to company's Bristow's accelerate noted, over the the well Jennifer performing today, growth years. expect As next and business X is we

the and result year. The rescue search the are cash Guard next the now the key well services diversification we addition middle making contracts, attractive, growth government company for flow into are long-term of in Coast Our of we and the for operations to leading will investments launch business is and yields excited later decade. through experiencing Irish this

Offshore industry the In has last well levels. Wing improved our economic over addition, Fixed compelling operator, expect with upcycle. global the financial very and business Energy improvement under Bristow offer where are we the performance Offshore Services, we thresholds year, very prevailing the prospects experiencing of commodity accelerating continue. In helicopter breakeven fundamentals leading positive, and remain an return this basins to is price

builds. models material which the and and offshore times market for spending new is is and and the for over The additions factors current XX in of increase near improvements most higher medium at Bristow's increased As long global a cash new expected our upstream margins, industry, result, the visibility offshore years, occurring over to next or super has projects X illustrated utilization last several has these combination lead contributed flow, focus the are from returns. to free for helicopter amidst XXX%, the heavy, capital rates. a earnings The relevant as and have effective seen supply helicopter medium, of trends limited positive backdrop Slide renewed tight dynamic, of presentation. These on investment significantly with years,

capital for that Bristow flows indicated the in Robbie? prioritize significant approach balance has let's XXXX As metrics, of we and beyond. ones protection focused questions. the disciplined investment, guidance latter the expect and half for a allocation by our open shareholders. With company's to attractive cash of the line guidance, sheet, financial strong increased will of allow facilitate the driving organic that, return like and to our capital generate

first The question Sullivan from Benchmark Company. The Instructions] from [Operator Josh is

great Congratulations on quarter here. a

are? Just what guidance are takes? even looking have you You the might Or mention of what major maybe the there, peak sizable why at XQ, but major year puts the raised higher? did some not the curious them range for and ones

Josh. Sure,

to parts As are personnel I that our remarks, the changing business range about strongly, benefit tax our we where should and well. and ended We prepared over perform in talked new were one-time in We basis for the the have Cougar than approximately resulted XXXX. $X.X items reserves. is expected in the of the of accrual better midpoint cost benefit and Suriname, an year of Norway, And insurance XX% and do continue end seasonal million back quarter. to my a those did release equalization the the to performing accounting, of expect

Can And you where some then just the you drivers release. get on up as here for those I 'XX, as taking but expand well, 'XX that as the in visibility visibility? see you increased far guidance mentioned

driven region Africa. XXXX by expect outperformed, continue into The really primarily raise to guidance and is is Sure. we XXXX. being that That

of those about on financial long-term? the here. the last? maybe And get expect to a should And then Services Government little can should your some potential maybe just business, how in we But partially think we penalties how more offsetting color we success then impact penalties long

Sure.

So, the the have that our business experiencing and time by is about We do now. factored penalties primarily chain in been we're our Government them quite future, issues expectation expect guidance. continue that being we've for are a that some into supply these driven that talking to Services into level we of

better of versa, being they're end it lower than they of So, us the we guidance vice end to that what would be the expect, in range, bias if they than if range. or have we end worse up what that, our would on higher

cadence the for at it of think should how aircraft of into XQ, does here, dramatically investments off? look we QX, and we as just then even then XQ And how and fall

the mostly I X over mean, we does drop SAR have to the It continue to the the related to expect we off. of delivery both of next contracts, take quarters. -- helicopters

we and our have I earnings quite in XXXX, think, it it get into drops dramatically. off where presentation we

left million related we contracts there's only million, have. think to $XX SAR I that XXXX big $XX into the

just met? with OEMs those going I are confident the And for overall given providing dates supply are deliveries, you mean, to be chain in you those are the issues? confidence

Yes, Josh.

arrive this time, time. on aircraft the to we're deliveries and of expecting As the

The next is Lee from Evercore question from ISI. Chris

on as increases? And utilization pace do of you utilization I provide the guess question rates? the continues tight cycle is, to my fleet you anticipate first and offshore helicopter some attrition S-XX context could stay

the we If heavy that new mediums, really then about the on being relevant business, AWXXX, about helicopter think particularly traditional category. super the the being for we're the any our for Yes. the talking the S-XX HXXXs, that leader AWXXXs, the on, and category bidding models medium we're projects

For utilization or each models, those effective current levels are near at of relevant helicopter XXX%.

dynamic of the parts they idle probably airframes which there number where a delayed are as S-XX, is but not awaiting OEM. repairs working, and today, serviceable from the could be there they're a to Now related are

back absorbed readily seeing at those being see supply the rectified we into the that them edge market today. the in is market. that S-XXs coming see time, over leading chain we're As do And we rates situation

towards greater like transfers transfer devices shift a So growing over for transportation? observed preference offshore utilization of such And as boats large helicopters? you have capacity for crew via

Really, then transportation segmented geography, what obviously is the which some do, and distance well marine options. segmented market between for by It's shore. the is personnel really by cases in facilities offshore well then we helicopters, from and pretty

crew for providing the vessels really Mexico, area a that Gulf are crew in vessel all being supported competing day-to-day have end of Mexico, deepwater. up some such we're the transportation not and are Gulf do really Bristow helicopter U.S. via are shallow don't we services transportation basis. In we by against that today. In the our marine So market geographically where marine that's on as shelf that one a the water, on overlaps, of services facilities

a vessel fairly well day-to-day markets against we're to on be tend again, not So Those segmented. marine basis, the option. competing

I Right. lower. energy recently that prices trending been my is guess last question And have

energy So lower are potentially and a to how prices risk outlook? significant Bristow's current

and servicing, prices. current commodity offshore robust look intact. are at firmly upcycle is that We believe a most well the of breakeven the long-duration Really economic below at we levels we're for the energy basins if thesis thresholds offshore prevailing

of to be we again, expectations the $XX it projects at while economics a the Brent barrel below would believe, prices $XX, for would we're of most servicing. attractive is impact have really start long-term today, offshore substantially So to before that

strong long-duration, upcycle So again, is firmly a intact. offshore believe the we thesis for

is question Steve next from The from Silver Argus.

Can outlook. the the remind the given My you despite question, on just were targets -- the that the first raising 'XX. XXXX new will more guidance of and unchanged and remain behind coming the assumptions that that contracts rate range and nature fixed the underlying contract renewals offshore given for in wide outlook online the be in energy positive? of for us and quarter Congratulations fact 'XX 'XX, SAR

Steve. Sure,

out the out we there. we you these quite long-term As This know, XXXX. last you noted, that put large nature quarter, range due And to longer-term targets financial put is there as for through XXXX. a is

things but continue be way, as targets deemed could it the if the range, reasonable to for is So, now. higher this of we we us bias leave to to end it -- that

the contract being financing and SAR given recent terms the halfway of Is now strong than the investments timing in and QX, And more potential allocation in for new change behind there performance any now in you, returns? contract. your shareholder through the on capital thinking

Steve. material No change,

that I protect strong think for our it have that ensure namely that capital to allocation, we the framework we affirms balance thinking we about sheet. want

via We significant Offshore space, volatility our from to are, to and gas Energy exposed exposure oil the Services cycles.

a want can make time. withstand strong over to we that have balance various So sheet that sure we cycles

XXXX we the continue that in to that to opportunistic, the are ability and be particularly a also sure ones in potential of guidance buybacks, organic And and dividends. also to higher be via or we'll shareholders then in have We want whether to share to beyond, half our that we the capital latter investments, make return driving programmatic invest like believe attractive ranges. position,

industry. last from looks last may. expansion? fleet one down order. the around you supply quarter, You've provide any mentioned overall aircraft the like XX dynamics nearly It tight I on construction And either presentation the overall on and the aircraft, timing if the or under of X fleet Can was cites one, the update

terms the returning timing over overall expansion near So any term of in is of the of to fleet? thinking there the an

start basis, Services On the next years. be fleet Yes. our couple first the of with Government growing a we expect business. net I'll will over

for total taking configured build delivered we're be this in Those SAR year of Guard, we and delivery Coast will -- next. new Irish X So AWXXXs.

taking For to delivery are X expect we total model configured take of this UKSARXG, of of we AWXXX a year. helicopters, SAR delivery which

first have OES also space, book begin Energy ordered will super a access Offshore Services have of we're as couple very have we become aircraft With We times, well for to AWXXX those the have helicopters customer. sticking year those long super they a is delivery twin on this light believe helpful the the medium we AWXXXs. over order medium XXXX. And we valuable slots to support later and And also X actually XXXX pretty next positioned the next deliveries and for then quarter those key which HXXX delivery to aircraft, of think lead advantage competitive are years. year finite in orders in with an to

and So in those, then will again, we expect timing be of next more have year the to begin that XXXX. delivered

question next The is from Baird. Patrick Fitzgerald from

a about more accounting jobs, you America a and talk bit about change? you oil Africa basis you little that gas change on in bit or could growth in Is the number hours big talk one-off quarter? the and a little saw year-over-year behavior, of in just that? flight Could the Or a issues,

Yes. Happy that. to address

aircraft increased to increased the signed. say is theme rates that specific about, utilization on new trend So, Americas, talking and that we've of been I'd contracts which with Africa both we've is well as on overall, activity the that the as ramp-up

has come market Customers in picked really, some for the more. customers the had activity utilization of back which up working lower-cost with We've previously has Bristow a there. Africa, levels helped are left had our competitor to there. also fleet in who So Bristow, country

beyond. and as next continue that places So Africa market and contracts seen with short-term significantly, we've that to well and like some projects particularly Americas, overall, in well into as that, Jennifer utilization, Trinidad the new improvement And the year is a expect increased improved in performance that as started we've referenced, we Brazil, certainly some Caribbean. has in

been to that higher, within legacy XX% the better, window contracts, this than is new average, rates again, on they higher any then, replacing. roughly those had rates So sign were opportunity we've utilization that have and

both overall, the higher in higher So again, better it's both utilization improvement Americas. Africa and rates driving the and

or think -- that? kind of be you XX% every, them higher if are the year, then, should process? you're what previous your year And How reprice and be would would about we repricing repriced an percent that like, level, X we contracts that contracts So higher? Okay. additional, XX% there of into than XX% X every

OES contract as now, our within of about portfolio, So we've XX% the mix. reset contract of

XX% So terms reset. the to runway we have go left to in be of still what's of

referenced of level. you good just think a I high a thumb at rule

active we year where given some course, of ranges. it's will when as there. In a growth, our is in there's of And not you and seeing we're and improvements period there really target a the of new that the of any one of levels company at contracts. new the is impacts some XXXX, in last year However, EBITDA new full that revenues variability active XXXX such lot OES a contract were seeing renewal XXXX XXXX year, be that as contracts be us a are run year. overall the that's look but signed more the improvement to is. expect starting for reasons XXXX large rate

that's of actually market much Yes, in of, helpful guess, I contracted about guidance, bit? the would -- How of see Okay. is so things going that. the terms much fallback XXXX still a in guess, your changed, to how ask because I was kind spot -- of you I that if versus,

with XXXX, one won't the the on It's Guard XXXX of the a Ireland transition be Overall, of our October is this attributable later with XXXX. looking final contract It period, in that a to this Irish long transition beginning services at improvement in middle bigger EBITDA Coast government the But Ireland we'll we're of good ranges impacts the in component base of completed year. side. until is EBITDA launching the a our so for large year. begin contract

short-term we in is guidance although component OES range contracted, there some or well. of of our in have there, would our what XXXX from side as spot is work the Within most business,

the you detailed and the spend. general on for CapEx for the guidance -- the detail thank And guidance the SAR Okay. in

that $XXX the have a guess XXXX helicopters to or just I rest on believe, said, you $XX million something, So expected million gas math, million of oil like, -- have, for ago of doing from the CapEx next quarters XXXX. this $XXX And more I then and year. to and couple you then you year, you spend

of years cadence CapEx what out the the as we cash well, about think cetera. kind wondering et your Just about, as looks in like flow, free of and, that,

Jennifer? it, one, Or to address can me. Do compliment take Jennifer you that -- and can I then want too,

be government services we Guard complete year. for investments and So expect Coast by next SAR capital to with as the you U.K. largely XG noted, Irish QX both of

have be an book have our below we up That OES. -- significantly million, identified expect under we the we for note some flexibility aircraft customers. some We question you a referenced. And includes an timing did around be and from to It book We then includes would similar be, X Light demanded an to in order that customer size order for need that threshold helicopters orders on opportunity, numbers it it'll a maybe the with in see being standpoint year, that The by good match also helicopters. that XXXX. order AWXXX Twins move $XXX next have if to and earlier we within do opportunities. we

All right. Last one.

guidance do you reflects and fleet if in helicopters the being the 'XX? those 'XX -- in new Just

It does.

AWXXXs of end -- smaller number, I a referenced, for certainly of Twins then handful a by the and a XXXX. For probably the for Light that

question Jayne from is Energy next Partners. The Daniel from Josh

on is financing ask side. the to just want I question First

but they're seeing, about significant you're You financing obviously you us you could through expectations equipment A as you're how bit of that? thinking date. what the today, and for different going successful to your financings been market have a talk little contracts, with year by backed just guys forward, couple

unique of for bit we a these and rescue It's that have. contracts search with a us Sure. situation

credit at credit long-term, are newest we've the government of this able of sort cash-generative, organization, XX-year been to basically to look there. the to and banks, these So XX-year in financing be to lot our through and quality there's that's financing security us. an bank, contracts, able quality to and where go export backing government-backed case is least the a a they These get of which of

get able the we're U.K. specific So, equipment related terms to very for financing SAR Irish contract. the both to the SAR attractive and

we financing. today. that reason is path down So, newest It this the that's this we is -- for the best there have one went the out really

time, that take move partake, work as to see we need we additional these that sufficient manage we as CapEx. any As forward, don't for we really, on a flows cash -- this have to other of deliveries, to

I see reasonable, in maybe QX, in the environment, -- lot rough and West your the would When business. look of let's were the And when little over where billion offshore the very last offshore sort the especially also 'XX be were the Would calls for the you where then Africa, on call at I seems going we expectations $X we the offshore beyond, for of line if sort top about of increases, confirm we're expect it guidance on side, in flattish rig highlighted, services going I level energy to and then on you bit we some to material amount your growth? QX think a Okay. price decent guidance, 'XX to math in of activity do a drilling When where flattish in couple just weeks a the based energy little XX drilling without ask of question market 'XX forward, activity bit the differently. top a of if even I'm line offshore even on at and elaborate over it, a next your months. you that? And see mean, recount

-- business mean I'll production related. offshore go I of to big a energy our is portion back

offshore into stability some energy. So that that does -- put

the a is in lot increases there's about of to around there rates questions As than and Chris 'XX. 'XX those rate where in going in more are one other talked go,

rate will a number have ratings, today priced based coming not Africa have we we related will growth increases in as rigs many 'XX. And for the likely the back XXXX, Nigeria, going lot is fairly or to as are as So, stable we're into growth fact have customers us, a in necessarily which we not region. really that on well, is we to already in, that to have on many customers that of that came not our the and

you just that, Josh, Yes, add the we of a in I in I referenced, that levels Africa. activity have view terms think would similar

We expect that the to it's from continue have high see market the that fleet capacity a to meet will activity upstream of the And working that and availability level to pretty ensure customers. we're we'll a that need.

Okay. could be my nature. And of tight start ordered final to across of that could delivered, from you helicopters times for industry? competition potential then if think question, lead issues I'm and for a long today the cycle could just on just today, things standpoint So, they lead with getting just about ultimately update the us how times things and trying remain when

you If supply-demand could the so balance helpful. we just be that, would think about update on could

Josh. question, you the Sure. for thank And

on like. it think what of look new update opportunity the is good status a to I builds potential

the look heavier SXX focused now. What super-medium on side the we've future needs that the So, is to really at category. has could closed a production been available being been years today talking today, of the industry couple if of meet primarily manufactured is for the we be and the of line that the growth about market

are that around between as the well a aircraft be as per they product. Both I'll for produce that HXXX, of AWXXX. XX year. have those of the product, in to production their which civilian broad first relatively the be an So, shared AWXXX line needs quote being year production significant customers, a And Airbus the the as finite both a numbers being can market. military orders, and lines would the the second Leonardo reference terms

for are folks like capacity, Bristow. Because of say relatively more. lead times or tight XX production So, that I'd long. months

XXXX to has will we OEM delivery like for and have it valuable book ability aircraft we're if before you one is the that at a opportunity up reasons want AWXXXs scarce XXX while actually have become the would that This do order pleased XXXX actually Leonardo a were the a slot. and in and order a an be the to receive today you to with that. to of deliver to turn those and So, super-medium

So, we us think positions that well.

in over call queue. further are Christopher turn I for to There now no remarks. back will closing questions the the Bradshaw

Stay We Thank and call. you to everyone for quarter. again thank you, safe. look forward speaking next Robbie, joining the

concludes call. today's This

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