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Civeo (CVEO) Q3 Earnings call transcript Oct 30, 2024

Daily EarningsWednesday, Oct 30, 2024 11:43 pm ET

1min read

CVEO --

The Civeo Corporation, a leading provider of workforce accommodation and integrated services to the energy sector, recently held its third-quarter 2024 earnings call, highlighting significant achievements and future growth prospects. The call, led by President and CEO, Bradley Dodson, and CFO, Collin Gerry, provided insightful updates on the company's performance and strategic direction.

Strong Financial Performance and Strategic Renewals

Civeo reported a 19% increase in adjusted EBITDA from the third quarter of 2023, driven by the success of its Australian operations, where adjusted EBITDA grew by 19%. The company also announced a 33-month contract renewal with a major Canadian oil sands producer, valued at approximately CAD 150 million, demonstrating the company's strong relationships with key clients and strategic positioning in the market.

Capital Allocation and Cash Flow

Collin Gerry, the new CFO, highlighted the company's robust cash flow generation, despite a year-over-year decline in adjusted EBITDA. This strength in cash flow is attributed to the company's strategic investments in capital expenditures and the release of holdbacks from completed LNG-related projects in Canada. Civeo also returned $17.8 million to shareholders through dividends and share repurchases, underscoring its commitment to shareholder value.

Looking Ahead to 2025

For the full year 2024, Civeo has tightened its revenue and adjusted EBITDA guidance to $675 million to $700 million and $83 million to $88 million, respectively. Looking ahead to 2025, the company is optimistic about growth, with preliminary expectations for adjusted EBITDA in excess of $90 million. This outlook is supported by the company's continued success in Australia and its strong customer relationships in Canada.

Expansion and Strategic Growth Opportunities

Bradley Dodson discussed the company's strategic growth plans, including expansion in Western Canada, Eastern Canada, and the U.S. In Australia, Civeo aims to exceed its previous revenue targets, driven by the success of its integrated services business. The company's focus on expanding its services beyond natural resources sectors is a promising development, indicating potential for diversification and future growth.

Conclusion

The Civeo Corporation's third-quarter 2024 earnings call presented a strong financial performance and a clear path for future growth. The company's strategic renewals, robust cash flow, and strategic expansion plans underscore its position as a leader in the workforce accommodation and integrated services sector. With a focus on growth and diversification, Civeo is well-positioned to navigate the challenges and opportunities in the energy sector and beyond.

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