Tidewater (TDW) 7 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the Tidewater Q2 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now Senior turn Corporate Vice Investor would to call Development I Relations. Gotcher, West President Instructions] like the to over and [Operator of Strategy,

begin. may You

Quarter and Thank our the on Chief Rubio; Middleton. our morning and Piers to you, Chief morning, President this Conference everyone, Commercial our Quintin Mandeep. Tidewater's I'm Officer, Good call Second and CEO, XXXX by joined Financial Earnings Call. Sam welcome Kneen; Officer,

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

Second Tidewater and Thank welcome Conference everyone, to morning, Call. you, Quarter West. XXXX the Earnings Good

day revenue nicely forecast exceeding day. our rates nearly printed day driven quarter with $XXX stronger-than-anticipated exceeded per by Second rates by expectations, our

smaller vessels milestone and rates, over positioned highest the cycle XX day that higher-specification even cash Tidewater This the is benefits to ever structurally to quarter higher rate percentage notable in offshore last acquisition and a through of few The We the efforts of any the is the and to years. margins gross high-grade highest history printed of margin through the of fleet fleet flow deliver better a and younger, sustainable for vessels highlights older, second Tidewater. our significantly marked the point day realize the believe at better healthy than in greater XX-year the years. disposition

up, global weather characterized each is is continued begins segments the speaks to quarter geographic supply. rate of were we operate. our across vessel to global classes in of hates strength day favorable each vessel pick to only persistent primary is we not when the with a demand, posting second which each tightness the Day exactly our The of classes rate of supply what saw and vessel rate often in of tightness we activity typically and in global day regions vessel in robust and The improvements. broad-based during improvements in day rate sequential our each is vessel quarter conditions quarter. this which by geographic the through the together, This performance in vessel realize. segments taken the And driver but supply continue this

by fundamentals long again to we balance to and geography have the it indicative improve fleet. favorable and of ripped mention the on for supply-demand weather over the over build We to industry I in intermediate the term. demand of New We've about talked the supply week. appropriate in the XX this, important for on and distribution looks continued remains doing years. years, our maximizing both over quickly seems eye the vessel optimizing business is been the by class movement to geographic keeping every that and doing this the muted moves company's reforecast a activity get vessels past, investment and return Sam but for is coming this demand but often a by which

shifting as were month, X%. and Over has discuss quarter the we $XX how today want activity we diversification the the geographic forward in the of suddenly result past as shifts. to we quarters. region next in million will guidance updated performance the the have quarter outlook our you costs you we give from our third we larger on how down see revenue will in that We now that execute third to or fourth just strength in full Sam fourth the step-up West to seen begin our because quarter. begin the insights second you by that well in to improved third through in we the the under will shifting, is our see going down originally into shift what And driving slightly anticipated in over quarter activity bringing quarter X offshore are insight now a on as give with and walk year you the operating guidance. Piers the

the on to the addition consolidated the going structure. Piers to in the about to return improving Sam going market. speak our you and capital speak In to you philosophy is And West about our above, you to is debt going is lastly, strength numbers. walk our overall to thoughts capital through

costs added next of $XX our market, for repurchased nearly $XX million repurchased open to us capital diversification fourth geographic since brings in setting the program last move quarter's million. to inception year about of the stronger shares the All repurchases operating open the earnings of up we buyback reduction free of quarter And overall improvement both release, are in we flow in in the the generation we debt about Subsequent even of and $XX our dry XXXX. an million in factors, That of with structure, these XXXX, year the cash the year-to-date combined in shares the benefit into share market. from strength dock as of market. have the and

the $XX.X shares obligation into we related those lieu equity of the open to in first of shares used market. the employees on tax in buy employees cash In open million these issuing compensation the to from to repurchases, market quarter addition

the his prepared our allocation cash committed past we some the we've capital X million our on to strategy over used shareholders. to business generated million $XX count So detail quarters, that return on in return pursue flow a to using to share West $X.X but the of provide cash from views on about maximizes the by remarks, remain will the reduce capital shares. more

far, to to thus clearly value return that We our accretive own the are existing acquisitions, position, deals but not that is to the higher strategically but shares. relevant repurchase of There have opportunities are our on to investment are fleet our fleets pursue several from acquire shareholders continue materialized. currently

existing to continue our of Each various a projects, of to and in push the of for production vessel of and fleets rising with market located the to and to flow but next remain business And focus grow business the on earnings and Piers second over that, take the to to build, offshore a acquisitions for America, support for to remains materially call advantage and our expected few day continue in vessel floating infrastructure are elements each activities drive support. Our we are commentary we demand environment are requires do all are production financial very years. additional Sam and quarter. free over of the these so. to supply-constrained continue of subsidy West, drilling, well rates all with the me demand poised summary, in pleased and We North growth, and cash opportunistic plan And South during performance turn positioned In let we to outlook. geographies.

Thank you, Quintin.

share an Board capital The in represents have Following Quintin's context to existing brings competing these relevant. date, has return for are million. maximum end and $XX.X has Both capacity. still on of program additional allocation authorize program of announce total Directors repurchase capacity authorization our under share as share that are return repurchase The discussed agreements. and discussed we capital $XX.X capital philosophy evaluate To the provided the of flexibility new we that opportunities of of million a that concepts remaining our pleased our capacity to repurchases of opportunities. comments amount authorized our allocation of competing been permissible we've debt capital,

past However, X on of financial and quarters our maintaining the given the outlook sustainable of longer-term capital the the opportunities. additional the near-term structural influencing and fundamentals factors is that business. basis believe to over optionality wherewithal returns pursue current while long-term a our the We pace

our debt structure. to Turning capital

Achieving debt it establishing more capital M&A as this capital relates best capital path opportunities. to the establishes our a evaluate only that revolving long-term credit not sizable for for facility. provides to with continue other appropriate a cyclical along capabilities a allocation or added unsecured structure, goals We business goal debt structure to a of achieve

continue constructive. debt markets monitor bank and markets, to remain which We capital the

that maturities, However, have we with we itself. present our any ability opportunity that augmentation feel feel may debt the near-term we approaching are we and structure on no leverage any to opportunistically have comfortable allocation capital current as capital position, act we

quarter, are nor just medium new worth our Day our average uniform down as quarterly vessels rates classes and average rate. we earned and of number classes large vessel day months, with single medium contract our large shortest relatively uniform contract not second them of the contracts smallest new low composite we and entered duration number quarter within double-digit improvement sequentially small had they rate vessel East. figure. In a of contracts into PSPs of a for Middle this providing X high of the smallest we in large rate during average It's class. average with declined had During new composite The off was began that banker duration the contracts we quarter day of early term X% classes vessels and bringing this leading-edge all XX since the vessel noting long-term classes are given entered handlers contracts, across under XX,XXX had a the sequentially. this to second of into a quarter, come contracts the the

the third with quarter, materially. a quarter previous compared expectations our dock the we dry now quarter the to will year gross remainder XXXX, quarter drilling of margin. second commence now are billion as that fourth have to days the step-up increased fourth and slated expect counter commence third as the quarter prior third our line do dry to $X.XX in a in XX% to of number seasonal with the our $X.XX Looking declined expectations. the We moved days way projects as revenue billion our full into and in guidance similar along be into quarter, the campaigns revenue dock updating anticipate to We nice to

revised rate expectations. the revenue XX%, percentage about an quarter Given expect X expect about from increase a fourth prior be up margins of now point we to margin QX now the guidance, quarter in third gross and exit gross

in $XXX Our of quarter with XXXX. currently revenue of in associated days at backlog the and fourth the backlog backlog call the fourth million highest commencing of fourth Approximately our I'll $XXX contracted landscape. with Piers We have of areas to unanticipated our the contracted. where the quarter. of we for of an The for large and for classes for revenue third typically maintenance risk unplanned sits day remaining of XX% the particular overview revenue rates Africa of to quarter and contracted days exposure command and With see Mediterranean $XXX are currently have anchor downtime commercial quarter, that remainder to our about over turn million that, revenue drydocks. is the days Further, for we the due available million largest in contracted. with our of handlers XX% XX% available uncontracted projects PSVs segments, with Europe

it; everyone. On market give very objective mind within remain we Thank We demand OSV only why which continues around to we as one, the all on although place new a this we than optimistic and with is, the for planned charter related to and beginning with QX, we is at regions and remember feel in additions geared and about footprint, as of nuance a strategy year are muted. X morning, in more my risks was equal, commencement. and year. as just the short-term global the overall as for the outlook lower to some you, to things our created months, delays under OSV length to in for towards our West, that construction important not the in that well Two lower remain than call, focus In drilling located it. projects, and contracts truly chartering quarters strategy are various of positioned very improve geographies the we our two, rest have nonetheless for our more still had vessel good project and were supply remained bear average short-term chartering company the high-specification in-region previous

that that to and of expectation would all campaigns, Caribbean, In Our started was QX to the all Mediterranean as have by highest expectation drilling which which, X reality, QX mentioned On we and our up late pushed now in Africa, top support in start projects right are got West has fleet. of what in number projects these that, a in be would our and going those supported gone the through signed happened is XXXX. XXXX. the with primarily in of earners early in PSC all are the larger them late now classes through expected earlier, to will have

any projects the seeing right, you So more is to our are of But limited, news, this the rates the we in geography have ability our one aren't is classes cancellations happening to leverage is in projects Saudi cancellation seeing pushing seeing we variable. projects is across right announced any good which diversification to and pushing is aren't the decline Arabia, The multiple key, when regions and regional that what day we in multiple in QX. in outside vessels. of any previously of

our opposite regional are still to prepared fact, and In the rates. both with some pain ourselves while take competitors seeing utilization short-term pushing we

the in X our off-hired country. it pertains we of we all to fleet, Kingdom be last situation update our to informed been vessels will in And an in As ongoing on the as that own week, immediately. had X operating discussions

day commercial to team X in our found customers Within rates wider region. the for local higher Middle work East vessels the all week, have at

offset QX outlook than We will the is from vessels rates these performance very be in suffer QX, day some any our as higher time impressive reposition, by but our region of idle for effort in expected XXXX this items a as time intact Middle a able this will for important to strong quickly for waiting team value be than it's have the why presence East, shows which in both in specifically. situations. so situations react occur, like to local work to to commence also to more When the all to there's reposition previously

Looking geography we customer that remain pay this a different to of in the should XXXX, in our proper move the at fleet customer the pay and of long-term the appropriate. vessels, of in into out year customers to rest project. needs over demand confident and and each And additional if base our is that and our right back move a each region end to then to the region them them is only mix

does can to early so how the [indiscernible] support that, drilling moving In fact, continued over in that to in short-term in that I which direction we QX customer of therefore, of on Thank rest operate earlier commencement. in we on improvement hold see And our I'll expect boots is projects the they mentioned that mainly needs. in QX, each several late the we confident with chartering market to to you. with the that larger We SiP we're programs pleased our regions and year the all in some to operate. risks, in the we very strategy be into the very regions QX. Sam. feel with hand the support move project we to being all XXXX, with we short-term will delays granular into in better A different ground place QX continued the and signs that in due demand project and continue of see regions to right Overall, forecasting positive in delayed are momentum we has detail XXXX,

XXXX. through like take to the and Piers, focus will you, calls, time, discussion the and out rest an our of discuss operating the At quarter this And of see the primarily I I compared first from affected for my second second results. standpoint. cost results good would we as quarter-to-quarter operational will financial in you the on Thank aspects morning, previous of everyone. also the some playing that quarter to how of the quarter XXXX year

away this the quarter, level. summarize move In higher I and a detailed will from addition, results regional discussion them at

X.X%. share. XXXX the As day noted in QX. quarter, revenue. the $XXX.X first rates which $XX.XX from per QX, filed XX.X% million to day quarter compared XXXX, second million increase in net to in was and driver per Offsetting of $XX.XXX main was by X% income or our for an increased dock in of yesterday, idle generated was the $X.XX in in press release per first of million quarter increase the of a This revenue from in the days. first we rates in Average we higher quarter in to day reported decrease In quarter of due $XX.X day dry the the XX.X% to increase the second utilization $XXX.X in

quarter margin percentage in higher in QX. variety of to QX in QX. Adjusted Vessel spot cost couple idle costs inspections vessels $XXX.X were in to gross on quarter days million margin modestly where EBITDA between million compared from as the QX. high-cost in to customer to is compared $XXX operating related waiting million QX. QX vessels vessels due just costs compared Our to was related of Gross on market. for points than percentage the loss $XXX.X compared items, other for first either due XX.X% increased in contracts, or as in QX crude million X The higher to were under a several as XX.X% $XXX.X our into million Fuel crude utilization increase to regions. including was costs costs million $XXX.X Australia, higher to $XXX.X breakdowns, to a R&M we of remains moved

X% decrease there mobilization time addition, million costs don't of capitalized include just that X.X $X.X projects our QX, These a about days commenced. of In would reduction have the Drydock as by quarter, West we write-off loss of started dry utilization an settlement a of million. dry QX, schedule. still couple mentioned incurred costs. normally In anticipate a increasing Piers to either lighter but unique a in result and an utilization million. in a contract anticipate not to of these of further and Middle dock items increase operating activity items occurred we fewer days in million will R&M is about in in Piers $XX additional termination East QX, dock. costs as referred Therefore, The due operating QX consider a routine that Furthermore, we and heavy were will in utilization anticipate Africa. that do of have to costs items. we do operating costs. and $X.X costs in to to much fuel decreasing idle translate of idle result and a duty in we see the we anticipate decrease customs In in due as that a We drydock lower

and gain like well. recoveries in professional $XX.X million. vessel provide will $X from $X.X moving second back recorded our we quarter. higher will be that from information quarter I that million our balance addition, QX In the Australia, primarily has proceeds the fees operating In of statement additional income in and bad for the significantly was than and impacted $X.X costs out X as G&A some couple to to debt now decrease fleet of a benefited we for would sold sheet quarter, vessels which QX. of costs a we net due higher million, million of net active both

lighter nearly ballast capital expected we million the third noncash drydock costs to approximately for for will G&A the Drydock the percentage In for quarter, quarter compensation. $X.X days full million about to points million vessel we million of into and $XXX second in we about cost deferred year IT the and $XX In incurred is affected drydock second utilization about $XX million the XXXX expect DP Drydock cost in about be $XXX QX. million, related a the move which We utilization quarter. For dry our dock quarter. treatment be as during million stock $XX also costs And water X installations, of year, modification, naturally expenditures QX, we period, by to upgrades. anticipate million. compared improve. $XX fourth incurred system in $XX.X to includes

Also declined. improved authorization. XX.X%. X% $XX spent Middle the million rates used XX.X% loan higher share were that supplier to over Americas expect slightly $XX results. were June which of XX, to operations For which approximately the compensation. and X%. to We term in in the in principal number We in operations except has have the of cash $XX.X count more was the agreement. from $XX.X our cash we XX, to generated of capital the release Asia regions, shares. full reduced cash in the which stock conduct the payments stock X market, region than cash and the our by and quarter, on our customer increase generated shares to on in related million We quarter. all we strong $XX.X business year details cash facility refer segments. the spent and flow of our is employees XX-Q The of reduce primarily senior buyback press Pacific free I to on we quarter, incur of collections have million XXX,XXX footnote in from this led XXXX, regions, Through by shares results about summarize under discussions flow the $XX the announced approximately million quarter, Revenues made to QX. lieu vesting through in and of million our million repurchase and pay taxes expenditures. in Form and attributable for in behalf in we through of results, June $XX.X by free margins our $X.X first shares to million Year-to-date secured East, segment region's To both Gross tables issuing day increased million

significant margins in quarter to QX the increase that to We reduction we utilization. operating the our fourth X% improvement expect previously changes the quarter due discussed improvement a very third QX. summary, in for We will costs and pleased affect do results. are In the recognize and in in with

However, I as anticipated demand previously, flows we are expecting drivers turn vessel our continued tightness us the QX strong to back to main will and continue cash the classes, be in and that, rates supply the free over each a strength Quintin. in to strong strong it vessel quarter. that day We remain profitability. With across encouraged enable by generate to will results, our of affect

Sam. please for you, you if questions. Thank it Mandeep, up open would

Thank you.

James. We [Operator Jim will now with comes begin question the Instructions] the line Raymond of Rollyson question-and-answer session. from first Our

of control, the things little a versus to And obviously, disappointing hasn't to like it your but pushed me get out really changed. that when what Quintin obviously. planned, right was sounds

'XX start-up still you're sounds could things it anything and bit me for outlook just doesn't pop get kind changed curious I'm a in that picture kind that response like think So you're in about the But you if that XQ. results pushed, suggesting that, timing about And of into XQ obviously even it push beyond. But correct stuff. sound are start-up big in will pretty tracking of just in feeling just delay starting I'm are wrong, the what like to how nice has of here. XQ to with little a also risks the and

calls may but similar more certainly than and And industry. around it's that's heard related what And well correct. on have about right. decisions to things understood it certain absolutely offshore is are to think supply economic and about season, I shifting the inside fairly That's activity. to other the you earnings conference And chain logistics

gets slow just I But going still going is And 'XX down. down started. when as coordinating slow little so, it's it even as bit once more have. don't and 'XX, I started, what always in it's look getting optimistic we're don't seeing they see or difficulty see to to a

then like rates, I'm increase But number look the increases. mix quarter lower. versus And leading-edge you. at if past leading-edge couple wrong, on me if Got kind I correct this and of was of look the different skewed categories across the obviously, the in of composite the quarter, rate

I'm quarter, X%, You of X% single to just fourth been was of context impact up kind of about maybe the double that quarter, high Correct on were going And probably of Middle that little a East, this in bit were wrong if just first quarter, you also forward. there. much that collectively. digits. double me And the number mix that's how we re-contracted so can low think

little Middle anybody. No, give absolutely. probably I'm going role. Piers the on East than deeply more West to a more it comment could over bit to And then because he studies contract this

Yes. Thanks, Quintin.

a to we're of PSVs larger classes on part it relates your fair So rates digit in good. a the low to think, The as and high is for of first the which continuing teens, rates, of class pleased that I think anchor broadly. That's was single kind and pace pretty the question those the characterization. medium day momentum leading-edge handlers. quite Again, I with,

So think, a expected. had little if the of pace I for improvement line, we in is perhaps what ahead of vessels, bit those not

smallest the so part recontract the class prepared our of some the we in there vessels happened element my of here. to remarks, mentioned question, same mix second a period. to And in had in And I as vessel smallest was your

of in in variety you smaller our of the fleet. just having the classes. when our so, look contracts types And vessel vessel at end vagaries that, of the it XX% nearly of smaller And that's a was wide were

activity that driven there's But that's look activity with. kind there being at are way feel this forth, just by where we by larger the the FPSO drilling very vessels so comfortable things work are So the momentum if of and quarter. you continued that

next line the BTIG. with of from Greg Lewis Our comes question

hoping was that margin to I guess, get guidance you got rate thinking in and -- the start QX. you we we of, I Thank commentary gross mean, QX the did about XX% to us exit mention kind QX. kind through get But I I of But for there. before realize that

about you've guess, of previous what exit? them in bit. think assuming in of a kind say, PSV like I give of definitely December But help gross times curious little that, us bullish a I of As lesson in mean cycles history a a look around exit And to that sequencing, and just little a around it's terms like views those kind And of of course, market. I margins kind then any that's XX% in bit understand seen us I'm just maybe that the QX commentary than, then there. your Quintin, versus where of on range more

Okay. answer format, going again. to Greg Greg. And in to good we're to a talk team this you Well,

So it is margin is 'XX be very an discussion gross that a the to is add element is going of heavy how of would that half this other second the drydock in interesting the I here. context time because over to the accelerating

over spending the on drydock. we've I million in $XX think quarters spent So been -- we first X

in on free once in got in just up boats those we've fourth $XX-some-odd naturally their and are that back another revenue to dry contracts, quarter. think then And that increases go I dock QX. million the

go, expense then relatively to has going is and ready pulling has those also that in they're them talked all high they're So in out. we've are naturally free, contracts up a drydock then these and moving combination we these new finally Piers vessels to West with which they're of they're moving to have into related dry been And QX, in about. fuel boats to had level had that, dock, to on alluded and that this that's running clean, benefit pop

and high. So had unusual have maintenance repair of and of settlement then couple supplies then in in customs that had a that element a of and about consumables West we a a related talked and another case QX Africa relatively been couple lower And Sam items to...

America... The write-off the of

about to a I'm right. second. Yes, going one in talk that

the had a in some Middle costs East. write-off we So crude of

the have and margin. go to work, in that's work pop We So have the we that down we QX. driving coming in, costs coming And what's freed substantially. in boats got to up then

they associated the quarter. Greg, want votes giving type, of margin frankly. illustrated costs the we thing Now to all don't as relates I and getting well able something of of for by But out during And Saudi rolling mob see remarks, hope write into and but use activity keeps the have it, the capital, we and going time. we very about And lot to quite to there's a to cost this really those of the saw I boats work they that's it that's to nice have XX% reduce And footprint Arabia back us, listen, was back your in decided a going, quarter. vessels see give off third Tidewater ended it a just that the Middle even on we earnings those they to it's margins peak, that me as the up over before go we it East The where it to us. I business they Sam what hope second like was I natural it to on get talk little but time. vessels if really don't the with move was talking team And prepared quickly. I came levels. know happened the a leave it about that bit then when where penalty. They about what back then on when were

that to goes me, things the we see bit it a geographic just example as more little to a bit it's another And to managing so, QX, bit, a little peers of time optimize advantage think shift And it. And to to just us diversification really is roll you'll I of the but good outcome. as of exciting little just a of as contracts. this newer take repositions

of next comes question Fredrik with Securities. Clarkson's from the Our line Stene

you as the XX bases follow that you say gave I this rate amplify you us for quarter, around that larger the of leading-edge rate commentary are and that told the want contracts. yourself, on and signed regions across some well. previous to up you vessels a rates have examples And asset up, leading one all as with you bit the edge questions

that did recontract you have up just that So wondering you larger XX have lower of where of mix to we got quarter contracting again? have this that quarter brought this Or the terms vessels more average I vessels. was and could -- just volume vessels in vessels, was why sign arbitrary to only higher that's and this volume

commentary So super would be any that on additional helpful.

Fredrik, it's Yes. West.

XXX of at time. vagaries the some points of lengths to discrete contracted but of alluded having for time again, different kind degree, assets, we in to, various I As

that early. so, the other. long-term And any bit a off of given as a you the come a mention, That contracts is did about the of vessels talked unusual. Middle number or direction we had one East, We we have quarter, in in shifts mix can

so, contract preponderance the would of life. have, if have of vessels And they gone perhaps to would a normally have higher and end you their recontract right,

XXX little different which have distribution few with spread you been more know contracted. fleet. for X So have to But question that perhaps. quite there's think classes boats thumb important can yes, is different to if boats you about of -- remember But could that those I mix, boats in the rule have few we a and I delays periods a that a will, could of a the don't there that classes just it's larger bit talk than -- a across the the boats, vessel project that your

say I give So to a that from here a what's you these rule other there's variations can and during can period. time don't that that have time to time, thumb given contracting to than we of you know

that there again, vessels larger number. recontract, was, had skewing side was smaller have would as more but with to had a of a number if that other on absolutely one effect quarter higher or available you vessels the where have I also West about which coming thing also negative you average agree by a being re-contracted, in effect it just chance, fewer you on the is

on mentioned X-month you'll having you much guys, going Quintin the re-contracting managing I play each you -- the a to baseline and the Okay. it's fleet think, also average, for -- average to that or -- go contract recontract lower coverage X rental market, it's forward? half you some to length. have also all Do each than guess about if do. year, of but times to able of a lot being you

So any thoughts on that?

Well, basis. a rates so momentum I think what I'm day-to-day forth. and he on talk and going give doing this feels this He day the he's Piers can sense for to as to let about a you

lower and expect. would short previous fleet, we're X at sort a But is across see going so quarters, contracts. starting generally think mean, been than at of normally I Yes. Fredrik. little we've months. mean, still some A we as we anyway I I months as or well. drilling been slightly longer-term we've XX whole to comps where term the is general construction

So I jump was earlier. on bit a think this actually West's of points to from

see. of this just strategy was bit But shorter You have just smaller quarters is I for still normally than I with about little But a some up we'd We're term the think ended and just positive overall, little market. which our QX. a contracts some with very the sometime to long are the vessels We bit change. different. are going think don't that case re-contracting

to the quarters. how we're drive and go we where still through at to us moment, gives next 'XX. market just But to into few we happy with forward 'XX very the yes, are the moment, So positive opportunities see continue the we'll at going that But we're think and rates. I

helpful. relates day Super which rates for one going the forward. final to me, And

you about the I and current year. your think rate obviously have you remain in average day over -- allow report around you're think $XX,XXX XXXX and day. rate maintain this optimistic demand achieved right factors past for the quarter, I that's reported for of the you should outlook to per pace the that the that supply And the you increases that

Second quarter was $XX year last million.

we a like saying expect second year, the Are the improvement over at average reach if last $XX,XXX? seen should you've quarter be So you specifically. $X,XXX around that second XXXX day quarter, to the you per look in

there. $X,XXX I it's to All mean you're right, think year. I a Fredrik, range little ahead $X,XXX that given in per

look about that's at I to And can excited. so. been want get last it. think on we there, push I believe don't I forward on we continue then delivering too we've years do we're that, momentum and to that that capitalize to about what talking And where yes, I X.X that's the everyone is But it. or it.

purpose, $XX but day, around the framed guess also I that I on question it's per addressable. I got

Smith line Energy David from the Partners. of question comes with next Our Pickering

make comment QX QX, sure to Most a dry average my utilization expected this it's shifting expectations that understood been little questions wanted I but QX your If impacts days. to the higher of have asked, bit downtime and vessel higher schedule for dock just for about I expected that was 'XX. if

Sam. is this Dave,

some again, done just of get expectation worked. dry push just were had into QX the it way then of into some write-off, sooner. being getting to contracts, some they're because, those us the in the So to a docks contracts gives pushed in QX supposed But be opportunity kind mixture. of the were QX in QX shifting, We had you the way it's because the they done that QX

probably QX is out is overall days it and combination around a in what quarter anticipated. days the we of pushing in amount extra the than originally of So pushing XXX

dock Not for have that Okay. year, really right? days the higher a is dry expectation of

our of will of they're pushed. of drydock in just There in yes. timing be of it that dry some expectation because the year, docks, days way getting the seen was Again, because we but delays have of the the the again, of some

to because flat to XX% understood I to of would it. increase QX then expected $X.X require make hit from roughly midpoint a billion. guidance that correctly QX that revenue revenue wanted appreciate I the QX And I roughly think sure I new in is

right. That's

a be realized late prepared not up are to allow will I remarks, think if roughly anticipated And flat. period. it QX which revenue around for that qualitatively anticipated of step think previously. QX would expectation to in We and in be QX that the about revenue early kind to expect run the said you nice start have dissimilar we And is revenue starting what to we now conceptually, that that into QX in projects QX, our QX, we as in QX that

of Our Daniel line Jayne comes next Josh Partners. from the with question Energy

margin that QX. you to the of wanted not positively as about the are is about So only to into think items improvement, going the just A that impact mentioned we but I XXXX. lot first going question ask that QX,

going the notably, up cetera, as well. in So to be down, et go dry are a little utilization rates higher, things docks in maybe play Those bit. coming XXXX

and of next good XX%, be into first? So think the as way year about going that things about move margin, to Is just we XXXX. baseline a a into as that think we operating sort XX% should vessel

next but haven't will given on that But the we we correct. full call. do on 'XX, guidance Well, directionally, you're

I So of here's saying, we improve, see were have what back [indiscernible] in couple you which a things as rates 'XX. continue them pulling is don't to into that that said the day

So continue on should to that spread and margin that we're that building grow.

X-year drydock and heaviest 'XX from going is the The to be other unique moving 'XX 'XX that's thing in lightest. really is is about 'XX our our cycle, year to

and the X the spending and vessels won't we've vessels half of fixing of that been first in the repairing we the into we the year, money see on up, nearly amount months that that So the them as been off-hire 'XX. first year go have

be to to So expecting see to fewer should And very what going in there's there's going be indicative of uptime, QX. we're be vessel more that costs.

we that let I'll call. the leave give when full do a rundown me you and quarter way, then So it next

you a that rig is the a if also be And go with that just could you forward reasons next could the and right some you little pushed looking seen happening. would it. you're seeing talked delays to wasn't there offshore that Understood. detail delays driving the for more frame delays necessarily talk what the that and again? Could hoping why cost maybe it XX-XX And for into spoke to to just then follow-on you and months activity expectations it you was earlier, the could your great. the You respect alluded I about maybe world. of offshore in drilling over you being are -- contracting we've to things

you over basis he pushing a go things the to talk I'm to with that the also All feels sense And have is kick through he's about a the them may of on Since regular going rig one right. couple we a build what to little to he Well, dealing next anecdotally market to bit of Piers. as right. years.

then it So him, I'll to kick let follow me up. and over

think point project you. saw pushed think areas, our but mean or comments the from planning, to be a X as to X project pipe, instance. not they a from I logistics Thank customers I Quintin don't X want perhaps And I earlier, was had projects as speedy and for supply of customers X the we perhaps really envisioned. getting of specific view, on drill hold get that's as customers or couldn't chain just in of right number because alluded a his to

up -- got planning we get that have were are to rig, hold a going end else anything more of things right. pushed the we it's delay than they just going and Or the So like everything project? the saying, to and to

sort some there to the of personnel maybe think areas, get was of also there project XX organized in got I to and a a in was lack of time issues couple XX days. just slipped

didn't So we any see cancellations.

looks QX worry So nothing but of positive definitely of sort very about, sort on that.

obviously, would now in everywhere organized, I IOCs they've to bit little I out regions. But the it we good regions operating got I in moment, regions in, look main of uptick rig think in sort movement the in. of of a and in I got think we activity all activity, think operate the visibility of at the see of for all the absolute pretty just sort we're 'XX And in there's better say terms in the themselves when and areas. customers each sort follow we're each it's not in of carefully very our big a we'll of the 'XX we

very we're So positive.

than a anything think the was expected. around up than planning else was ends I more bit shuffling in more being 'XX planning

with we're rig and 'XX into visibility-wise, regions So the in in. pretty we're positive as 'XX go all we the

the from Chris Johnson comes question Don with next Our Rice. line of

market. were spread about the the not I But out you that the past across to ask a the comments said calls, deals it widening, me utilization potentially looking were you narrowing. at Any In of higher wanted that? number bid-ask market. seems actively given that industry, is to in M&A that there around

vessels any sure for too do don't to shareholders. there's a tremendous situation value XXX-plus and of roll we're just existing that because we're The illustrated that amount want the value money 'XX our margin to make as amount deal fleet. day created with that 'XX to can we of obviously, that raise through about, tremendous we the I we expansion, that's looking But we And remains rates talking say a to with much still right. that us, you make have. the be going

I at potential the both, than current acquisitions, about look more fit market, the and nicely or demand class when Because profile. focused our age a nicely time. at to boat into our have has particular on particular they that and So worth a they're ideally and geography optimistic or everybody been they fit into think I been fleet trying

for But assets. of we're don't is get I want last And the run, And overpay done. the disciplined. bunch will I think do want things -- to I just so, thing seeing a long in to

active but price say the continuing I we're so, it disciplined, to very in to -- market. just being we're would words And suffice be very the

you're going it you what be around for Just would Okay. XX your repurchases? It would around your deploy for share just maybe cash cetera? kind significant the to just flow? cash thoughts down next free I months. that generate just over you Or capital thoughts XX uses pay et into? appreciate cash me. or that that Would build And seems of color. flow And to more free one like debt,

point We'll and not for think we're to as the are cash. this build so over I at Well, we don't that necessary cash in forth. going cycle. certainly keep liquidity levered

them So is to returning were get we done get money done, talking were about, get value-accretive either to if or as just that we that can a result, them shareholders. acquisitions that into going can cash if we I deployed

Fearnley the question Magnus Anderson Our from line of Securities. next with comes

on the follow-up you earlier. talked about rates a So leading-edge that

regarding a for the If leading-edge lower you to the could increase would adjust for information you some to the rate what Or be? distribution, Middle representative that the East leading-edge classes? spec level vessels to rates lower spec provide

sure that of the in re-contracting relates question, not press what's East, I noted in those first think re-contracted I'm higher. to relevant were the it part the the the understand we as average realized Middle release, on vessels we is as I rates XX% vessels but quickly that by

right? that again, regions. are Now there the one down even rate on But Because day were given are came lowest and elements get higher vessels terminated, But quickly these day given important that and in the we were that day Again, distribution situation meaningfully believe off composite that It much basis, it a that at happened right? vessels a to base, we and able day assets so rate leading-edge significant them rates think I quickly in of all for that nature our brought that right, improvement what's off just re-contracted the was that of where to scenario is smallest re-contracted. constructive. these vessels lower are early, a rates.

the to speaks that general. think market I of So the strength in

I not are leading quickly. down happened about, we all think regional ability our for the classes, there elements as I the talked diversification, some that some, There's on-the-ground have those again, re-contracted quarter. just speaks positive think, rates given edge our there. But to to within uniformed get vessels just nature, even that to the the capabilities vessel to weigh

Q&A turn closing call Kneen now That back I session. Quintin concludes over for our remarks. will to the

everyone, you will you, Goodbye. Well, November. again thank and we in update

today's concludes call. This

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