Helix Energy (NYSE:HLX) Solutions Group reported a strong third quarter in their recent earnings call, with revenues reaching $396 million, an increase of $87 million from the previous quarter. Net income also saw a significant rise, from $7 million in Q2 to $16 million in Q3. The company's adjusted EBITDA rose to over $96 million from $71 million in the previous quarter.
Key takeaways from the call:
- Helix Energy Solutions maintained a strong liquidity position of $279 million and managed to reduce its net debt to $59 million.
- The company saw high levels of demand in the offshore energy service market across both traditional oil and gas and renewables.
- The good intervention and robotics divisions performed well, and the shallow water decommissioning business experienced a record quarter.
- The company's vessels, Siem Helix 1 and Siem Helix 2 are contracted until the end of 2024 in Brazil, with expected increased demand post-2024.
- The Robotics division had a strong quarter with high vessel utilization rates globally, and the T1400-1 trenching system on the Siem Topaz has been contracted until November 2024.
- The Helix Alliance shallow water decommissioning business had an excellent Q3 with strong utilization rates across all divisions.
- The company forecasts revenue in the range of $1.2 billion to $1.3 billion, EBITDA of $263 million to $278 million, free cash flow of $100 million to $140 million, and CapEx of $75 million to $85 million for 2024.
- The company expects growth opportunities in 2024 and beyond, with its four major assets currently impacted by legacy rates expected to reach market rates by 2025 or 2026.
Helix Energy Solutions Group also provided updates on its well intervention, robotics, and shallow water abandonment segments, detailing expected utilization rates and projects in various regions. The company is currently in the budgeting process for 2024 and anticipates growth opportunities in that year and beyond.
The company also addressed concerns about offshore drilling competition, stating that its assets are specific to the North Sea and are not greatly impacted by rigs in other regions. In response to a question about convertible debt, Erik Staffeldt, CFO, stated that current note-holders are unlikely to convert because the notes trade at a premium to the company's stock price, which is listed on the NYSE: HLX.
Looking ahead, the company expects strong results for the remainder of 2023 and into 2024, with a tightening of its guidance. They anticipate increased demand for their services, particularly in the rig market, and do not expect to add any new vessels. The company concluded the call by thanking participants and inviting them to the next quarterly call in February 2023.
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