Tidewater believes the worst of the pandemic downturn is behind it.
On its fourth-quarter earnings call, chief executive Quintin Kneen said the Houston-based offshore player's revenue came in at $92m, better than the $81m they had guided for late last year.
Revenue also jumped on an annual basis, with Tidewater reporting $397m versus the $385m forecasted.
“It’s hard to overstate the challenges we’ve faced in 2020, but the worst of the pandemic driven downturn seems to be behind us," Kneen said on the call on Friday.
"Historically ... the fourth quarter is normally a tick down from the third quarter."
For the last three months of 2020, Tidewater reported a $29.2m loss versus the $59.8m loss reported for the same period in 2019.
The offshore sector, already hurting from the oil price collapse in 2014, was hit hard by the Covid-19 pandemic and the Russia-Saudi Arabia oil price war last spring.
The spread of the virus worldwide and the subsequent lockdowns caused widespread oil demand destruction, and the dumping of oil into an already depressed market by Russia and Saudi Arabia only pushed the price down further, prompting producers to curb production and cut budgets.
Oil demand is expected to rise throughout 2021, as vaccination becomes widespread.
Kneen said the sector might be back to where it was in the first quarter of 2020 by the first quarter next year.
Tidewater had entered 2020 with the intention of scrapping dozens of ships, warning competitors that consolidation and fleet rationalisation was the only way to make the industry profitable.
"I see tender activity in the second half of 2021 quite robust. Tender activity does not equate to demand" but it does suggest a tighter market, Kneen said.
He added that while resumption of offshore drilling would help the business, oil companies picking up deferred maintenance would be significant for the sector.
Falling short on the free cash flow
The pandemic and downturn pushed Tidewater to focus its 2020 efforts on generating free cash flow, with a goal of $65m by the end of the year, later revised down to $62m.
The company reported $52.7m, but Kneen attributed that to issues with Petroleos Mexicanos (Pemex) paying on time.
“It did throw us off our free cash flow [goal] for 2020," he said.
The state-run Mexican oil company owes Tidewater $18m, Kneen said.
Kneen said he is not worried that Pemex will not pay. He said dialogue with the company is constant and that Pemex recently paid $5m, but the lack of payment "is annoying".
