On July 30, 2024, Civeo Corp (CVEO, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Civeo Corp, a provider of hospitality services to the natural resources industry in Canada, Australia, and the United States, reported revenues of $188.7 million, surpassing the analyst estimate of $173.70 million. The company also reported a net income of $8.2 million, or $0.56 per diluted share, significantly exceeding the estimated earnings per share of $0.21.
Company Overview
Civeo Corp provides comprehensive hospitality services, including lodging, catering, housekeeping, and maintenance, primarily to the natural resources industry. The company operates in three reportable business segments: Canada, Australia, and the United States, with a strong presence in oil, metallurgical coal, liquefied natural gas, and iron ore-producing regions.
Performance and Challenges
In Q2 2024, Civeo Corp reported revenues of $188.7 million, a 5.5% increase from $178.8 million in Q2 2023. The net income for the quarter was $8.2 million, up from $4.5 million in the same period last year. The company's performance was bolstered by strong growth in its Australian segment, which saw a 32% increase in revenues year-over-year. However, the Canadian segment faced challenges due to the expected decline in LNG-related mobile camp activity and the sale of McClelland Lake Lodge.
Financial Achievements
Civeo Corp's financial achievements in Q2 2024 include generating operating cash flow of $32.4 million, Adjusted EBITDA of $31.3 million, and free cash flow of $30.9 million. The company returned $10.3 million of capital to shareholders through dividends and share repurchases. These achievements are crucial for maintaining liquidity and ensuring the company's ability to invest in growth opportunities.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenues | $188.7 million | $178.8 million |
| Net Income | $8.2 million | $4.5 million |
| Operating Cash Flow | $32.4 million | $19.4 million |
| Adjusted EBITDA | $31.3 million | $31.6 million |
| Free Cash Flow | $30.9 million | $12.9 million |
Segment Performance
Canada: The Canadian segment generated revenues of $79.5 million, a 17% decrease from $95.5 million in Q2 2023. The segment's Adjusted EBITDA also decreased by 13% to $17.2 million, primarily due to the wind-down of LNG-related mobile camp activity.
Australia: The Australian segment reported revenues of $108.6 million, a 32% increase from $82.5 million in Q2 2023. The segment's Adjusted EBITDA rose by 10% to $21.6 million, driven by increased occupancy at Civeo-owned villages and growth in integrated services offerings.
Financial Condition and Capital Allocation
As of June 30, 2024, Civeo Corp had total liquidity of approximately $159.0 million, including $151.5 million available under its revolving credit facilities and $7.4 million in cash. The company's total debt decreased by $31.1 million to $47.5 million, resulting in a net leverage ratio of 0.3x. Civeo invested $5.3 million in capital expenditures during the quarter, primarily for maintenance of lodges and villages.
Commentary
“In the second quarter of 2024, we delivered increased billed rooms year-over-year in our Canadian lodges and Australian owned-villages as well as increased Australian integrated services business with existing clients. These year-over-year improvements were offset by the expected decline in LNG-related Canadian mobile camp activity and the sale of McClelland Lake Lodge,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.
Full Year 2024 Guidance
Civeo Corp is maintaining its full-year 2024 revenue guidance of $625 million to $700 million and Adjusted EBITDA guidance of $80 million to $90 million. The company also expects capital expenditures to range between $30 million and $35 million for the year.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Civeo Corp for further details.
