Tidewater’s string of losses continued in the first quarter, but the company believes the turning point is around the corner.
The Houston offshore support vessel (OSV) giant posted an $11.7m loss for the first three months of the year, lower than the $35.2m loss posted for the same period in 2021.
But day rates improved with the company fixing 16 ships for various durations at 20% higher rates, with earnings for its largest platform supply vessels (PSVs) jumping nearly 30%. The shipowner said the average rate of $10,687 per day was the highest since the fourth quarter of 2020.
“The prolonged under-investment in offshore hydrocarbon infrastructure began to result in increased demand for offshore oil and gas activity in the second half of 2021, and that demand has been compounded by recent geopolitical issues,” chief executive Quintin Kneen said in a statement.
“As a result, the outlook for OSV demand to support these offshore energy activities has begun to accelerate significantly. We are already seeing this impact in the market, but the most significant improvements will materialize over the next several quarters as this demand swiftly eclipses available supply.”
Tidewater said revenue came in at $106m for the first quarter of 2022, up from $83.5m for the first quarter of 2021.
Its fleet utilisation jumped to 70.9% from 52.9% year-over-year and from 67.4% in the fourth quarter. Utilisation was at its highest in the last five quarters.
More consolidation on the way?
Kneen called the coming quarters “a truly transformational period” for the sector, mired in an extended down period following two oil price collapses and the Covid-19 pandemic.
He said the company had been working for years to capitalise on the upswing when it comes, going back to its $1.25bn acquisition of GulfMark Offshore in 2018, leaving it with “the strongest, most liquid and most flexible capital structure” in the offshore sector.
Tidewater's acquisition of Singapore's Swire Pacific Offshore last month was described as transformational, as it adds 50 ships to its fleet and strengthens its position in West Africa, Southeast Asia, Australia and the Middle East.
“Finally, with all of those pieces in place, Tidewater is well-positioned to act strategically, acquire the best assets to complement our global fleet and capitalize on improving industry dynamics and drive sustainable value,” Kneen said.
Consolidation has been a hot topic at the company since Bob Robotti of New York's Robotti & Co took a more active role in the company, advocating for Tidewater to acquire more ships.
He even launched an effort to elect himself and two others to the board to make it happen.
The two sides eventually came to an agreement last year, with Robotti taking a position on the board.