Tidewater's Q4 2024: Diverging Views on Market Dynamics, Drydock Impacts, and Revenue Guidance

These are the key contradictions discussed in Tidewater's latest 2024Q4 earnings call, specifically including: Market Outlook and Day Rate Expectations, Impact of Drydock Days on 2025, Market Outlook and Contract Duration Expectations, and Revenue Guidance and Backlog Coverage:



Strong Financial Performance:
- Tidewater reported revenue growth of 33% year-over-year, with average day rates increasing by nearly $4,500 per day, marking a significant financial improvement.
- The growth was driven by the company's strategy of disposing of older, lower-spec vessels and acquiring younger, higher-spec vessels, leveraging global infrastructure for scalability, and benefiting from improved offshore activity.

Capital Allocation and Share Returns:
- Tidewater used $119 million of cash to reduce its share count through open market repurchases and internal programs.
- The company’s philosophy involves leveraging free cash flow to enhance shareholder value, prioritizing share repurchases and M&A opportunities.

Market Outlook and Demand:
- The company anticipates fewer offshore rigs working in 2025 than in 2024, impacting demand for offshore vessels but expects subsea demand to provide growth avenues in the latter part of the year.
- A deceleration in drilling demand affects the ability to push day rates, although subsea demand and FPSO deliveries are expected to drive future growth.

Regional Performance Variation:
- Significant improvements were seen in West Africa and the Middle East, but pullbacks in Asia Pacific and the Americas were also noted.
- The differing performance is attributed to regional demand fluctuations and market reshuffling due to differences in demand levels and competitive dynamics.