Tidewater reported slimmer red ink in the second quarter as the offshore vessel giant’s chief executive pointed to a significant upward turn in the market that bodes well for the road ahead.
The Houston company, which completed its takeover of Swire Pacific Offshore (SPO), reported a net loss of $25.6m during the quarter ended 30 June, down from $29.5m a year earlier.
An 81.7% leap in revenue to $163m, up from $90m a year earlier, helped shed the losses during the period.
The figure was bolstered by adding the fleet of SPO, but chief executive Quintin Kneen said the improvement in the market is also clear, with average day rates improving $1,900 per day since the first quarter, more than the company might have seen an entire year in a normal upcycle.
“We believe the second quarter of 2022 marks the inflection point in the industry that we have long awaited and is now evident in our financial performance,” he said.
“Revenue, gross margin, average day rate and utilisation all improved meaningfully during the second quarter as the building momentum in offshore vessel activity reached critical mass.”
Costs and expenses rose 46.8% to $162m.
But Kneen highlighted that vessels’ cash margins jumped to 38%, well above the company’s 30% margin target.
“These improvements during the quarter, particularly the move in day rates, speak to continued demand growth as offshore activity continues to increase and as the vessel supply fundamentals continue to work in our favour given the shortage of available vessels on the market today,” he said.
“We expect activity to continue to improve throughout the remainder of 2022 with another likely step-up in 2023.”
Tidewater sewed up the SPO takeover in April, growing the US player’s fleet by 50 offshore support vessels (OSVs) to 174.
That pumped $43.2m in revenue into Tidewater’s top line, and Kneen said his company is confident it will bring $45m in cost synergies.
The OSV owner’s second-quarter numbers helped reduce net losses for the first six months of the year, to $27.7m from $64.8m in the same period of 2021.
