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First Quarter Highlights include:
HOUSTON & CALGARY, Alberta—Apr. 29, 2022– Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the first quarter ended March 31, 2022.
“In the first quarter of 2022, Civeo capitalized on the continued recovery across all three regions, and especially in our Canadian business. We experienced a substantial year-over-year increase in our Canadian lodge billed rooms, coupled with increased Canadian mobile camp activity,” stated Bradley J. Dodson, Civeo’s President and Chief Executive Officer.
Mr. Dodson continued, “We are experiencing increased accommodation needs in Canada for the turnaround season along with continued mobile camp activity in British Columbia, both of which should benefit the second and third quarters of 2022. In Australia, activity is also improving in our Bowen Basin villages as met coal prices remain constructive and we are starting to see expansionary spending by the miners there. We continue to manage inflationary pressures globally, including both labor and food costs. Labor inflation is most acute in Western Australia; however, we are beginning to see improving margins in our integrated services business. As a result of the overall improvement in our outlook, we are raising our full year guidance.”
Mr. Dodson concluded, “Over the past two years, the resiliency of our teams and our commitment to deleveraging and serving our customers have created the financial and operational flexibility we need to succeed in a range of operating environments and deliver returns for our shareholders.”
First Quarter 2022 Results
In the first quarter of 2022, Civeo generated revenues of $165.7 million and reported net income of $0.9 million, or $0.06 per diluted share. During the first quarter of 2022, Civeo produced operating cash flow of $2.0 million, Adjusted EBITDA of $25.6 million and free cash flow of $0.7 million.
By comparison, in the first quarter of 2021, Civeo generated revenues of $125.4 million and reported a net loss of $10.0 million, or $0.70 per diluted share. During the first quarter of 2021, Civeo produced operating cash flow of $12.8 million, Adjusted EBITDA of $16.2 million and free cash flow of $16.1 million.
Overall, the increase in revenues and Adjusted EBITDA in the first quarter of 2022 compared to the first quarter of 2021 was primarily driven by a significant increase in Canadian lodge billed rooms and increased Canadian mobile camp activity, as well as an increase in Australian village billed rooms. The year-over-year decrease in operating cash flow and free cash flow was primarily a result of working capital increases in 2022 that resulted in a decrease in operating cash flow and free cash flow of $10.9 million and $15.4 million, respectively, year-over-year. The increase in working capital in the first quarter of 2022 was largely due to timing of payments and receipts that is expected to unwind in the second and third quarters of 2022.
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2022 to the results for the first quarter of 2021.)
During the first quarter of 2022, the Canadian segment generated revenues of $96.0 million, operating income of $4.0 million and Adjusted EBITDA of $17.2 million, compared to revenues of $61.9 million, an operating loss of $7.7 million and Adjusted EBITDA of $10.8 million in the first quarter of 2021. The first quarter of 2021 operating loss and Adjusted EBITDA included $2.8 million of other income related to proceeds from the Canadian Emergency Wage Subsidy program (CEWS), compared to zero in the first quarter of 2022, and a $0.9 million gain on sale of a Canadian manufacturing facility.
On a constant currency basis, the Canadian segment experienced a 55% period-over-period increase in revenues largely due to a 32% year-over-year increase in billed rooms, driven by increased customer activity as a result of the recovery of oil prices and a reduced impact from COVID-19. Adjusted EBITDA for the Canadian segment increased 59% year-over-year primarily due to the aforementioned dynamics.
During the first quarter of 2022, the Australian segment generated revenues of $63.5 million, operating income of $6.1 million and Adjusted EBITDA of $15.4 million, compared to revenues of $59.6 million, operating income of $3.3 million and Adjusted EBITDA of $12.8 million in the first quarter of 2021. Results from the first quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $4.2 million and $1.0 million, respectively.
On a constant currency basis, the Australian segment experienced a 14% period-over-period increase in revenues, driven by a 12% year-over-year increase in billed rooms due to increased customer maintenance activity in the Bowen Basin. Adjusted EBITDA from the Australian segment increased 21% year-over-year due to higher village occupancy in the Bowen Basin, partially offset by higher labor costs across the village and integrated services businesses.
The U.S. segment generated revenues of $6.2 million, an operating loss of $1.6 million and Adjusted EBITDA of $0.0 million in the first quarter of 2022, compared to revenues of $3.9 million, an operating loss of $2.6 million and negative Adjusted EBITDA of $1.2 million in the first quarter of 2021. Revenues and Adjusted EBITDA increased year-over-year primarily due to the increase in the U.S. oil and gas rig count, which led to an improvement in Civeo’s wellsite services and offshore businesses.
As of March 31, 2022, Civeo had total liquidity of approximately $83.1 million, consisting of $76.7 million available under its revolving credit facilities and $6.4 million of cash on hand.
Civeo’s total debt outstanding on March 31, 2022 was $177.9 million, a $2.8 million increase since December 31, 2021. The increase consisted of unfavorable foreign currency translation of $3.1 million, partially offset by $0.3 million in debt payments from cash flow generated by the business.
Civeo reduced its net leverage ratio to 1.40x as of March 31, 2022 from 1.49x as of December 31, 2021.
During the first quarter of 2022, Civeo invested $3.6 million in capital expenditures, which was relatively consistent with the $3.4 million invested during the first quarter of 2021. Capital expenditures in both periods were predominantly related to maintenance spending on the Company’s lodges and villages.
Full Year 2022 Guidance
For the full year of 2022, Civeo is raising its previously provided revenue and Adjusted EBITDA guidance range to $660 million to $675 million and $95 million to $102 million, respectively. The Company is maintaining its full year 2022 capital expenditure guidance of $20 million to $25 million.
Civeo will host a conference call to discuss its first quarter 2022 financial results today at 11:00 a.m. Eastern time. This call is being webcast and can be accessed at Civeo’s website at www.civeo.com. Participants may also join the conference call by dialing (877) 423-9813 in the United States or (201) 689-8573 internationally and using the conference ID 13729407#. A replay will be available after the call by dialing (844) 512-2921 in the United States or (412) 317-6671 internationally and using the conference ID 13729407#.
Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for lodging hundreds or thousands of workers with its long-term and temporary accommodations and provides food services, housekeeping, facility management, laundry, water and wastewater treatment, power generation, communications systems, security and logistics services. Civeo currently operates a total of 27 lodges and villages in Canada, Australia and the U.S., with an aggregate of over 28,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo’s website at www.civeo.com.
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