Tidewater (TDW) 6 Aug 222022 Q2 Earnings call transcript

Good morning. My name is Chantel and I'll be your conference operator today. At this time, I would like to welcome everyone to the Tidewater Q2 2022 Earnings Conference Call.

As a reminder, today's conference call is being recorded. [Operator Instructions] West Gotcher, Vice President of Finance and Investor Relations, you may begin your conference.

Chantel. you, Thank and the everyone XXXX. Tidewater's conference earnings Good and welcome six for three XX, months call morning, to ended June I'm President Chief this CEO, joined Corporate Secretary, our call our and and and on and our Marketing, Hudson; President Middleton. Vice General morning Counsel Quintin Sales Officer, Financial by our Daniel Sam of Rubio; Kneen, the Piers

These other to today, our only risks presented Information financial implied found certain from is refer are call, may website press our be tdw.com non-GAAP GAAP reconciliation A sec.gov. that at measures we can Quintin. now are time be with any tdw.com and to to we'll financial And that release. accurate we'll time-sensitive Also and the and the referring present at advised are There available make of make be GAAP no or to call, of on XXXX. both information of longer during statements Please that the over recent included at the turn call non-GAAP plans SEC on and call speaks Therefore, at you're today's measures. through most website that conference factors. yesterday's Form cause XX-K our call. to and replay. in that any details by I'll expectations. During as and documents any August that, this X, our and additional performance may company's XX-Q factors uncertainties forward-looking stated on during comment actual or for different the materially today's these on

time been Conference XXXX pleased have improvement importantly, in market welcome Second inflection Quarter everyone marked more Call. the we momentum continued in some say an the a We've West. to business. that rapid building you, talked in Tidewater Good now. morning, about vessel anticipating that offshore and of for quarter second the and market point I'm pace Thank to the the Earnings

in in business, the point rate, most financial supply step-up and indicator increased I'll in in marked vessel by The day move regions important it second operational of classes. quarter. and provide a more vessels, per demand big some dynamics vessel our and With results. and the quarter day tipping significant color XXX on our marked of nearly strength the short, $X,XXX for But that's a one working sequentially. our

This typical we've discussed entire the signal most cycle, You is change over an today. market sequential quarterly we're a the during to up year that may per indicative as $X,XXX recall up in an uplift day. increase about the experiencing step

acquisition on successes realized in of that level quarter the second fleet post-closing $XX.X margins of with vessel that cash with acquisition and revenue XX%. contributed the of the the transaction During going quarter, say Pacific integration may the pleased of Offshore us referred some the which to cash we second closed generated and vessel-level SPO early you during that consolidated as Swire it to margin million the SPO. I'm well hear is our line of

For SPO SPO legacy million burden would XXXX $X.X totaled quarter, a about the on in which approximately was quarter G&A for rate. the G&A $XX million legacy Total run be full million. $X.X

is and Tidewater of the over the want our and a $XX SPO acquisition thank will achieve to of G&A next ensuring X will this goal we thus all employees for I OpEx million legacy the inclusive million and both synergies total the effort employees that months. legacy far XX in months $XX approximately confident are achieve G&A integration next over synergies success. We and of both broadly in synergies our targeted target of more

revenue included Total April. $XXX.X course, XX% contribution up increased to of the that the quarter. first in And second compared compared vessels quarter. million back meaningfully in quarter, quarter. in the second second million first the to the to late increased the $XXX.X to from in quarter Revenue beginning SPO Turning this acquired

quarter basis, approximately rate normalized was a XX% in move Vessel active nearly in per about year. on talked average and of cash expanded the XX margin this the XX% rates. percentage nicely percentage the was day quarters revenue of fully while target up attributed points XX.X%, revenue sequentially, vessel points up level recent up we've with over to day X sequentially, at in in from to excess almost the XX% Looking increase second about last

momentum with experienced from a to distortions operating more will the of the his in is the of world vessel per My acquisition broad-based impact changes Looking in our regions, the our view intention various eliminate any Sam regions. but give commentary. absolute all across SPO of business on absolute detail in stay we to the

Norway led way Mediterranean day across Europe, U.K., in improvement with a rates and the fleet Egypt. improvements Our the XX% with significant sequential in

market be to strong margin level market and the usually seasonally enter more in a quarter, to decision achieved points the associated in the of in improved up nearly to in considerably reflection market The day sequentially can weather than in than the the percentage the quicker margin nearly more any rate spot up XX We've more since aggressively offset XX% XX that Sea, on The and modestly XXXX. spring end to frictional cash day quarters the expansion. particularly opted you prior the summer. recent given our is quarter which early slipped the lows segment, the market bit spot and has stay sequentially percentage during Utilization seen a periods try and the weakness of rate increases. in strength is rather with at spot more the than points of Vessel unemployment second relative the North one nicer given this itself. which in market

momentum during to the Additionally, strong on working quarter. average show West we had one more quarter. Africa the vessel during continued

region via Day improved XX% rates and size acquisition. recall, of OSV sequentially in As improved structure. essentially level existing you doubled Africa to as to anything sequentially SPO SPO recent well largest their cost vessels in margin XX% new seen operating day, we've may this $XX,XXX per was the the in we fleet memory. the about the modestly of of recipient excess Vessel our

scale this of legacy up, nearly operations in support the percentage drive quality margin active much expansion utilization Given SPO that targeted with and the fleet to Average synergy the fleet X continued margin and from points was expansion. continue OpEx ultimately fleet have move quarter. West up utilization to SPO speaking consistently utilized, expect region. The OpEx Africa, continued help to and the in we expected to achievements accrue the the of will vessels to XX% of the in in legacy to synergies second highly we region

a Middle and and we I to of want the was out inclusive to Pacific Asia point been have number in our East to of Turning Middle first East has vessels Pacific that operated acquisition this of region. segment SPO. titled limited historically prior Asia

disclosure in regional Asia the distinct two presence brings sizable to relative the split we acquisition Asia scale the the established sizable two its businesses a to segment East segment as Pacific, in Tidewater the and additional due new on made own discrete into Pacific to the to Given provide Middle of markets. and the decision

we increases the vessel as quarter, day relates East it proven work somewhat rate but to vessels market in challenging market in has oversupply to this the of the a pricing supply this realize generally number market improvements which to the to consistent Turning in of interesting to specification one the relative given global most vessels. low large a Historically, medium saw quarter. is of specification perhaps signals of Middle tightness Middle East the the

X% day, higher we've $X,XXX rate in cash compared day second However, to average we've meaningfully to seen the by seen quarter, XX% recent of past a rate anything the during margin years. approached and well memory. improved what excess up in day XX%, in several average Vessel about almost per

rates segment Turning segment. more some portion the The quarter segment. mix X% XX in Americas segment Americas about day the in businesses relatively leverage operating during with in the modest the began it average that dominant customer, points. continued that nearly itself manifest the quarter. inherent significant due day market some Utilization to average similar all during the of about while relative improved shares show The with Caribbean data-owned in basis, was to increase. times sequentially. the Gulf to rate regional some double-digit of Mexico improved a improvements at of saw of area a have vessel the U.S. roughly the market was average improvement with of although the second rate obscures percentage interesting East for Americas percentage vessels number Middle nearly markets a characteristics we in to was day and up Average is The day the on our the this small within momentum that there XX% by flat somewhat sequentially, rate Mexico which limited

increase, to percentage rate year nearly X $X In XX%, million was points the the quarter. addition we which ago sequentially, dropped which to increased cash to vessel about of million revenue day $X.X double up by margin sequentially from

time financial XX% Asia on of results vessels quarter, Pacific the to are of Pacific XX sequential vessels of turn basis geography, the the our a and sizable vessels in segment. Pacific given were in working this somewhat active difficult the increase At in Asia Lastly, and was like Australia. broad of legacy Asia I'd the Southeast SPO About in new compare The principally this the to in the to mix comprised fleet Asia the vessels end region. region. the

has and enhance region opportunity, this of to regions hydrocarbon all we're the this in in pleased presence are but region the region believe similarly in rapidly we traditional momentum just long-term in activity other this is building advancing However, wind seeing market. that our offshore not in our a and

with earlier. referred the which quarter SPO-related $XX.X fees million Our $X.X expenses with the totaled during transaction-related associated G&A SPO the and along I professional million of costs in G&A other million to acquisition, expense $X.X includes

compares fees about normalized the with $XX million quarter. G&A came in G&A in expenses million of the a transaction, Excluding quarter. pre-acquisition associated $XX.X the first for right and This to

We for cash was added per million. at to expect on was SPO about continue the $X.X year flow flow level vessels next million to free office via quarter the the the -- associated out $XX.X a acquisition negative Cash with burden G&A quarter the for quarter. regional in Singapore new

will second quarter, And expect about you'd flow part which of vessels by working total the additional with which and second progress of We non-core of half costs reactivations build a the lay collections on and four in the second half vessels category quarter. will of But of part about XXXX, vessels mentioned during in proceeds with remain one sizable quarter by of down continue result disposing a expense We held-for-sale quarter's associated sale, weighed X made acquisition. about to overview what We on continue was confident $XX available XXXX we supply vessels. a and half the half for global $XX increasingly significant we in also In we million anticipated an spent down to first working $XX in within and we COVID-XX which anticipate off of the combination expect with quarter that approximately the third the prior costs $XXX,XXX up million half, SPO we the picking also in our company's we customers in very pleased during capital payments the continued significant acquisition. added by for to summary, disposing to to first quarter, second dock the become of has the of delay as second the of We it. remainder into We call the have believe dry that, the the the of to let with me to that we demand performance quarter. a moving the newly turn and entire we dock continuation of million normalize be revenue build. in We be working the the conditions contributing natural end year. million. in indicated DSO $X.X with the growth of vessel of by capital 'XX, during in to calls, expense quarter a free second two expect last capital results. Vessel vessel quarter ended constrained strong end call, market acquired environment. $XXX,XXX are were As fleet remaining leg cash reactivations XXXX the up an XXXX XXXX. dry disposing as market for including the in experienced With includes another fall of first in down spend build vessels, working of a over the in during to the quarter-over-quarter Piers vessel

of and affecting the you, into Last equipment globally our everyone. view, advantage believe supply-demand this These quarter, over are find we of market, and Quintin X that further the the and of are we'll PSVs for fleet which long global it continuing already in seeing placed vessels been market where still the with talked these larger and lead about are the classes modern impossible, come in in major Thank balance not back today we're stacked, especially larger our that for space years years And and/or we issues vessel market. significant to limited supply-demand over believe why we if in parity. almost those and still docking of they we supply we will times morning, difficult, good some have is tight the XX old are vessel classes. as larger items AHTSs, dry balance take well OSV are upturn seeing exacerbate to

well bodes which the up This globally year demand the across see of for would utilization all almost XXXX. full ultra-deepwater Rig day fundamentals demand jack-ups, the term like In positive. quarter, the on fleet. units half touching at the our levels floaters side rates basic of XX% $XXX,XXX we parlays full rates for nicely to of first Overall, which years. which and levels focus to XXXX very year of continues total, more into commitments on and obviously, CapEx XX% affecting, billion how is future $XX that I with for own improve and the drive per OSV projected almost average remains day, space market the day around for is and

of right side, rates for in OSV Shell Research for to pushing rates the increase market during government the record in region. tight. reporting in Clarksons day through our see previously and day and market being day Sea Working we've Sea $XX,XXX on greenlit for large in Europe, levels the to supply Jack starting very by the X-year the rebound North various and per Specifically The the and with charter North for regions XXX,XXX demand with like on bodes GBP rates in and seen U.K. time significant mothballed again markets XXXX AHTSs per averaging Mediterranean spot in positive and future $XX,XXX high X-year a shortness remain the well large strong compared and per per $XX,XXX charter AHTS at all of even which rates supply as AHTSs levels hit the PSVs in Sea uptick very the June with per is day in positively indicators projects XXXX, $XX,XXX day the compared the circa a demand. door North the largest larger direction. we've started that impact rates global to upside, time

of all for AHTS of recently only where all was were new which also Our to rise of leading XXXX. assets first to fleet an to XX% compared in the includes in of own the per vessel across Sea saw XXXX able in region by In reactivated XX% OSV rate the the this across QX the advantage of Clarksons index push awarded able an which excess rates in European North sizes compares half of large XXXX average to in PSVs, classes Med, the tightness favorably day market nearly market. the rate $XX,XXX QX the global day which to new we majority take contracts

in BHP with the XX,XXX handlers acquisition which XXXX. largest whole of Congo we the Senegal whole Moving to the expectation the classes cross-section again crew and but in the is our demand region count now anchor vessel have our plus the Africa of in are and end Swire, across rig our of particular with the smallest a Angola, added by to seeing increase biggest region rising of Across boats. with from continent we floating good continent, significant focus

the very been public is not day globally opportunity of will Most tighten XX% rates from rates to smaller classes the footprint the this are So in sucks our remains currently excess see quarters helping few good a to again we're forward. Most contracts is also new XXXX the out in for news classes but an activity, a vessels whole uptick in average And we and large larger to Pemex the last with a larger both starting in In continue in across AHTSs fleet of we all fleet market a will our U.S., were in to to PSV day to and Qatar the new came as vessel leading and continue see push we requirement the in their Petrobras by larger and into create of of customers contracts and XXX half rates circa player blended ramp first nearly contracts rate The jackups be large for meter that and quarterly area. to across in we the all to demand small in day. quarter. up that we're XX-plus Mexico, for our the in compared the In push key but support activity able away more for fleet, last supply mind only we races globally. driven the strong seeing compared compared class vessel the to Suriname, our has in continue by QX whilst going in rigs the new average where QX, year. as East, have uptick QX bring In high continue up rates fleet them push to seen globe, in continued region day. vessels for vessel the mentioned our this demand bear almost were to elsewhere Americas range. the of year in going and USD indicator space the to in in Aramco the of nearly going. on to OSV square Americas, and PSV to QX class whole to XX,XXX call were XX% throughout on getting leading to expect stream. Kingdom PSVs see have region in about really in country, tender to the mid-XXs turn, able this Brazil still to supply mid-XXs significantly our fleet of QX, region AHTS expect as margin production by saw charter Middle we very awarded volatile one and XX% and per Guyana that of rates bringing the push we of a Please region smaller tighten starting $XX,XXX is in for the good in to and new deck but for rates classes. to new the across tendering QX In as per rates well of more on dominant region an the Aramco able which see we we

the of of Pacific, key is Lastly, Malaysia in one in drivers region. Asia demand the

class sanctioned where have in come expected whole of to we half in a class PSVs, off Taiwan, of catch X,XXX BHP a X,XXX acquisition. licensing wind space meter projects uptick operating a we in and see good down the BHP XX,XXX but XXX an cross-section we the through increases the starting rounds rate the and gas Africa, projects deck farm online started is region Indonesia coming to the to from are regions. to significant market larger starting presence However, or large QX up we in to have way close the in two of the vessel of see The Swire quarter fleet with all other new Australia, in Similar square AHTSs probably new a to to latter region other smaller AHTSs. behind classes play areas the have being on to

with in momentum and expect with direction by how continue wise world move be line has market that of into QX right the to in the in by to quarters. Pacific are we expect Asia to we rate as subsequent end Quintin, pleased mentioned rest the XXXX. We continued Overall, positive the very

are QX rate we in to across to really of new hand Lastly, you. more than averaging starting fleet a per with Sam. I'll XXXX day whole improvements blended solid in or over across XX% contracts that, With $XX,XXX whole see rate the fleet. to nearly average about the QX equivalent Thank

morning, and you, Thank everyone. Piers good

second Now results. like quarter results comparing that XXXX. XXXX will these financial I would up to to and take through primarily make points you the key first of on results of quarter-to-quarter some focus the My discuss quarter our discussion

our As yesterday, perspective, reported we From net million release loss of meaningful noted press on $X.XX per $XX.X we quarter-over-quarter. showed revenue operational or improvement an a share. filed

approximately Utilization of million. revenue XX.X%. year addition was is uplift the during $XX vessels the this XX% million XXXX increase XX for active from contributed with the which from of $XX.X of revenue roughly first quarter. This quarter SPO benefited quarter or XXXX. the was of flat of utilization April Our of sequential sequentially revenue from second $XXX.X million the The

until was G&A million $XX.X the was by up burdened QX second an the was expenses cost year, G&A with approximately Vessel the was from in improved begin increase vessels. $XX.X quarter a $X.X and in transaction rate about million higher rates operating $X.X time margin we and income net during per this net already for with vessels costs rate anticipate to per first and is QX. associated of million for through driven improvement day of for cost in with mainly the market That from million per an day by of on QX, the included in $X.X of the for realizing expectations quarter QX half about which dispositions. addition month. quarter which in in a Overall, a $X.X performance, for QX the acquisition. well the implies second quarter. generated about $X.X associated in our million the We increased next combined margin operating up from from QX quarter somewhat million XX%, by for to SPO of increase $X,XXX per gross million, $XXX.X revenue principally $XX.X quarter XX% nicely may million, also SPO per day second SPO vessel totaled quarter recorded remainder would first for four loss legacy $X.X of costs cost the the sold is $X.X below million improved year post-closing we million However, of of day of cost a vessels. per to full synergies by the Included transaction. operating driven $XX,XXX run day. $XX,XXX beginning the QX. quarter XX% operating cost million, operating of million SPO of the the $X.X operating proceeds day. these G&A driven the accelerating close million the of market a which sale associated asset We half per increases. the day loss our Vessel million of quarter, at to of our $X,XXX decrease second income to day $X.X $X.X

over the some of to success or X achieved anticipate next remainder have G&A so. and synergies We synergy months realize early the the

expect eventually overall incurred have to run all In and synergies deferred day once $XX.X $XX.X G&A transaction costs We at drydock on the compared of day QX. in we basis quarter, to per been incurred costs been million million a around have marketed our realized. rate out level $X,XXX

SPO due by to and percentage the in compared vessel in scheduled also were which days a XXX a negatively with to we XX incurred XXX X regularly which dock heavy dry vessels included quarter, QX overall quarter quarter. dry As was impacted In and process docks our the expected, few docks points. utilization drydock associated first the dry about reactivations fleet.

We expect to the XXXX. incurred CapEx. the of about million year, we incur also bringing the to in year about through full quarter, remainder $X.X approximately In $XX for total $XX million million the the

CapEx to to for quarter, vessels cash related due to we SPO $XX vessel contract execute this capital. negative XXXX initiatives. technology in heavy modifications $X expect about We flow including be million $XX.X Free build million, and was dry spend the working as requirements the on million new primarily dock and

As AR working sequential in by capital, to driven it uplift buildup revenue. actual relates the an we had of

the combination tax legacy QX. drydock continued flow with and a yield and typically target. in in anticipate normalize in Also AR, DSO up beyond However, meaningful QX we we spend lower when pushing about $X.X of We have cash payments did in payments. $XX.X buildup to should end the improvement DSO were delay million some in customers improvement SPO million that to free what of by financial contributed $XX year the the million to included our

ongoing we've of our we with Pemex. As with past, maintain it dialogue discussed AR of about outstanding beginning in quarter, outstanding $XX had pertains the Pemex as we to the AR. the an At million

XXXX unique bond at June $X.X bond reducing commenced focusing due Pemex AR up its a to X.XX% for par. exchanged We accounts a its priced past of the million offering, vendors. payable During on quarter, trade

began equipment second XXXX, vessels at and from property we this in expect we reclassifying on We realized -- of assets held the sometime exchange. which our bond In XXXX, monetize point sale. to QX half for associated balance sheet AR HR exchange to

$X.X vessels We XX for have run million. the QX 'XX, end sale a this program. at value we vessels through of XX of held since had At

purchase million we we at second of for in of agreement the to created $X.X our proceeds we the modify charge a a In vessels related value a warrants X a vessel mark-to-market to share now quarter, recognized Jones for is adjustment with at $X.X would asset leaving like the on out and that the I totaling for added of and region. one SPO million. to $XX.X amended sold sale provision During vessels of derivative June, the loss held a charge four the inadvertently The million. Swire noncash held onetime sale a the to focus performance warrants. list,

vessels compared income Our million QX. operated to utilization of compared in an which SPO QX. two the operated Americas prior QX, region quarter. for in was XX which -- quarter quarter reported at the in up of the the in $XX.X for the The increase was of loss of $XX,XXX XX% of XX% QX operating XX from region to up of region was a result million The quarter Active operating acquisition. revenue was $XX.X from reported one -- in which $X.X million

from operating the to in to increase the in rates, The increased rates in day Additionally, attributable $XX,XXX increase income to was region. QX. per vessels the increase $XX,XXX revenue in and increase due day utilization operating in an day increase in the in

stand-alone segment East East. Pacific. Turning we've to the longer to own Asia the want new Pacific combined is that with from our Asia and into our split region I segment, everyone its no Middle remind region Middle

income by addition compared XX to in $X.X result legacy The the the QX quarter, which the loss million is was come SPO the average region XX% to percentage quarter as the operating XX simply influenced of quarter vessels vessels reported vessels combined expiration one it's on vessels increased reported an principally the QX. XX% day of cost to rates to We income region in the XX% SPO contracts. $XX.X vessels XX on Revenue the The XX per up decreased forward. the hire in million of as a our of Active off $XX,XXX utilization term had compared vessels operated that, impacted at per along second be we the QX region in $XXX,XXX which contracts. vessels in said of Asia April. of handful Pacific second of in were of million the QX. of average to points were to $XX,XXX targeted compared For with moving $X.X Pacific and the approximately in additions expired. prior and region to the day Asia that the these to operating revenue quarter beneficiaries region. day structure the of a by average compared the QX. improved Operating of compared anticipate highly by was SPO the synergies all additions in and as usual contracts Having utilization vessels brought in

stand-alone East to longer to with pertain segment, Middle segment will Pacific. sequential I reporting. Turning our Asia combined the no its is East now Similar Asia to comparisons Pacific the own The Middle region. segment, revised provide

in a the Africa attributable increase to to of in to of the to region For of is this reported to million effect quarter the operating XX% relocation regions. as was our along loss the $XX.X vessels dry QX region East in from acquisitions. compared as compared in XX the The one of up the The Middle $XX.X Europe at active seven loss compared region of by The and percentage addition $X.X QX. X utilization operating second $XXX,XXX Active of quarter, an quarter. reported in XX% vessels SPO the vessels East, in vessels the Middle the an with to vessels operated to decreased points quarter which regions million dock X heavy average second to West approximately million QX. the compared was attributable prior

to $X,XXX QX day increase and to in the per the offset improved QX. lower rates was meaningfully utilization. primarily compared to $X,XXX due by day the partially day income of addition improvement The in in SPO However, vessels, in day operating rates per

utilization in day by increase to added QX. per of day $XX,XXX reported Mediterranean QX operating vessel XX.X% $XX.X the from $X.X improvement operated QX. vessels we in an an increase and operating day an to the increase was to at income of region decreased did the compared compared We by was million compared XX.X% mainly operating quarter in Active The one Europe million in see to in rates revenue We revenue vessel. in income loss million $XX,XXX slightly region the in million $XX.X quarter to QX. increase The $X.X to XX Our uptick in in QX to compared per for as rates. saw driven which SPO driven in of one day QX.

was in and rates to revenue signs of newly from we acquired along operating vessels at QX. market see of decrease $X,XXX increase compared region Our Day layup quarters. West revenues steadily through see market higher an in to XX In million the summary, compared COVID-related We to $X.X QX day continued straight positive QX per resulted acquired increase increased both million significantly and active operating The XXXX. in day continued utilization The SPO are rates six income million in resulting day in of the higher XX.X% to million QX. in the region income QX. QX vessels $X.X average Africa Revenue activity. reported to addition to for increased increase area utilization, an in remainder from fleet. in more XX.X% has we've to operating continue $XX.X of vessels encouraged costs in rates of XX $XX.X from $XX,XXX operated with and the to in in costs in on for income effect by day QX to from encouraged The in and revenue, in QX increase SPO compared this seen QX anticipate from the per QX. are improve driven increase as the and we

layup cost issues. related forward expect of moving modest the cease COVID-related We and to to anticipate by end 'XX costs

and it that, pleased of the indicators the With XXXX. the to we with are turn and Quintin. remainder for I'll are leading results QX over back with encouraged XXXX see We

Thank would for you, the remark half year. confidence On the compared would call, a half the of see what like back closing, to bring we In XXXX. to expressed on the XXXX that I Sam. uplift I into and first of our meaningful last quarter's XXXX of remainder

half a second XXXX the heels not day confident the improvements the strong of On rates second of of progression quarter, remain throughout has our changed. the year. in of remainder confidence and in We continued utilization the

XXXX, revenue our largest coverage is Contract at vessel approximately all of stands of evenly of class representing fleet backlog the the our having $XXX fairly coverage most opportunities. our XX%. to of market exposure spot classes remainder million, led with the PSVs contracted For across

we contracted As fleet move million, right into approximately representing XXXX, revenue XX%. of coverage at backlog stands $XXX

the a currently class of continue increase class considerable environment rate XXXX our To substantial of of XX vessels a the our improvements. second largest experiencing day have Our market representing PSVs in contract of coverage as XX%, vessels to new various uplift to perspective, entered to aggregate over provide ultimately will into new contracts that nearly that rates during to This vessels aggregate compares of in rates. the day contracted just contracts our first improvement. realized pricing a compared during of current opportunity largest about deliver in put quarter, of XX% entered day XX% durations the that rate strength previous in quarter the XX

during of there on into excess compared questions. contracts of is mix pricing new will up it quarter faster PSVs, class prior with uplift worth anticipated. open Chantel, than was in we that, the market noting it's their our largest for the we And moving XX% some as to are issues, Candidly, While contracts. that entered for second

[Operator Lund with Hans Instructions] question from Clarksons. Our first comes

the was says around from day, the you $XX,XXX it per to the question just that my said average report. day around just numbers? Can you fleet first Just clarify, in side, clarify entire $XX,XXX rate for those while

Yes.

are they rollover think contracts. I

rolled contracts all-in just for during over all... So, quarter. but $XX,XXX had the rate We're the they're over

Okay. Perfect.

see Speaking rates quarter this where up in you the the we have kind day where day or we've end mean, I do can of average rates, ending of XXXX? talked the of past. -- -- a view solid has even you at this about expect to

have we're to as our going end especially at exposure a large larger clearly, we're public that have and view 'XX. don't of the into that turn of But into And about we excited to on class we're this our ramp-up move that we seeing. 'XX the express point. definitely Well, vessels, vessels we over

sheet? you opinion your and your cash view more And balance of leverage Okay. on kind balance position should Are before? sound your investment opportunities? [indiscernible] gearing relevant to now around forward with, please? Has in regarding are that, it at cash changed up paying my than sheet potentially out How you more adding was comment your going it Can you looking position. dividends

to I no and Yes. about build Yes. businesses shareholders. Sure. -- comments are to Listen, I've believe made cash cash that made return

-- underlevered capital-intensive relates we our I agree, company. to it a As are for

for have out but sure preserving a we contraction mid- until severe that a call capital-intensive additional still powder coming are established making to the might we company of kind of we liquidity right up also acquisitions you in industry and in more However, our dry are this industry cycle. what firmly accretive of a is just

right. no returning for So constructive excited time appreciate to that's and reasons deploy opportunity shareholders strategically, that that Look that we're to capital that into to about the the when money is appropriate have acquisitions to for do underleveraged. I'm issue us the extent

comes question next - Our Baird. from Q Patrick with Fitzgerald

going relatively reactivations spot market I OSVs I kind tight there side is that's right that but reactivated will go hindrance future? the for in to is a be about up of the the competitors of how supply can rates from wanted on put impact it much forward. to a ask cheap can lot that like much spare get in how day now, sounds capacity going

to I'll question, that's I'm on-the-ground to Well, been over vessel a tactical give But if got economics going to a up. such to the answering start that he's then hand the perspective. laid Piers see any are

are And those of Asia Saudi vessels. a to starting generally so and medium vessel definitely very that the mean referencing boats out when the lot Middle that that any see reactivated. up, Aramco end unlikely market layup front. the this high-end We're those they vessels that on generally delivered. the vessels I gets from to laid it'd as we're have others low high-end seeing remain have low reactivations today, layup tenders was in of been than long more was since Piers East large which think absorbing been in stacked tenders is as and oversupplied in that As And

it on even the the impact vessels. boats. market, will even rate certainly reasonable that low-end low-end on market. those those so impact will seeing And some day But still we're though increases

get but and me wants he And to to see anything. so over it add let if -- Piers

Quintin's just as well well. size, I could see meter I our class sort larger plus market. No, Yes. like similar XX,XXX to the possibly the been classes numbers we you to coming which There's And smaller very of just go really that's point, for have BHP large a for very things years. that vessels items think and come really XXX yes, of then of Thanks, into mean And lot the that. to digits stacked hear square don't this [indiscernible], of reiterate was I as vessels to on those some vessels parts when Quintin potential Kneen. the the into back single five but lead those there of get the and maintenance is back of long sizes PSVs,

seeing getting take market time just of reactivations with will some them maybe in just anyway. place crunch spares for we're So But it's and the back. to going the supply in come

large not end not So of certainly one vessels either on on concern and classes. really lower too the the there's much a

Okay.

a of contracts are that recently offshore actually see rigs yet. have that the industry, signed but these rig working not been following are lot So

I expect improve. So to side the continue would demand to

kind the backdrop, just So day we I guess, I of that's as I well? see kind mean, then is rates in of that your 'XX? mean where if thoughts expectation on, Yes. could your And

Yes.

with agree the side. on you I So demand

people start what happening price of couple producing starts on what side to which over saw encapsulate I people catch up, increase which oil demand Just moving up to to was -- price we Oil XXXX see on got years, prompted the maintenance. want more. the in in last an

more perhaps each of production their the that existing is facilities to And and have go of production to find get a barrels individual their while to fix things broken reaction out first been ways out for units. and and to so enhance

and that started at we pandemic. it And so fall the to saw saw we of 'XX dynamic same considerably up beginning And we We the of in saw see come end XXXX. back 'XX. the the then the end into sorry, ramp -- off at of in it beginning

up to was on as rates day, or the about with fleet I and we've constructed time deal. not lower we've being we're now another in. and to through I demand fleet them to and fleet go to high graded the okay? work as also The for rates them really maintenance scrapping did our deferred 'XX. today. day well far Tidewater time, end that operate adding layer you are going average that the going come want the see farms back been that seen rigs what at that we a carving wind for the markets in was so demand been vessels a did so GulfMark of for the enhance are $XX,XXX of acquisitions catching production. boats the looking at lot 'XX. And of right offshore will we the We've at speculate And up where is selling -- are that ways The has done SPO in peak don't in in as tell don't deal, but are to going that time prior just buying obviously, we vessels as same into cycles, the

reactivate your don't anything, enough reactivate. to economics There's not the it, the build considerable kind years, on in parts day Tidewater today 'XX cycle. the to add and crew supply in So cycles, call that to a we'll the fleet build. those we are new fleet okay? better the earlier that excess would of 'XX, see last frame, There's there of rates enough boats suspect enough the justify the believe still a in this I at would is next average There's And fleet new time was boats. The question, higher peak day than I see the XXXX, three not to rates I that much spec so not to end people to of market. to right, not coming the boats. XXXX,

the market real will to the on this as side inflation of continue day side. I on see little rates. element then next That's and to is the revenue over So inflation cost the that to But both three pricing bit the we up years, be there's a through push a push And which vessel-constrained and have well. element.

triangulate it's are you quarters look those I some it to this at several to continuing where But we to push as we the next continuing goes. forward where in going can. to go. to watch So And are aggressively ways rate as market, we'll updating point, to as think the

numbers realized? like G&A Great. kind just just lot once run synergies for good of a of but per And then you what's quarter are provided clarification, rate a

quarter. Yes. per $XX,XXX would see about Probably, I day Patrick, -- day .

$XX million quarter. per

million. $XX sorry, I'm

Yes.

for have closing the session. We now the remarks. end turn the will question-and-answer to over back I of Quintin reached Kneen, CEO, call

thank and forward November. All look in to Goodbye. again Well, right. everybody we updating Chantel you,

concludes This today's call. conference

You disconnect. may now