Tidewater Inc. announced today that revenue and average day rates rose for the third consecutive quarter.
For the three and nine months ended Sept. 30, 2023, revenues were $299.3 million and $707.3 million, respectively, compared with $191.8 million and $460.9 million, respectively, for the three and nine months ended Sept. 30, 2022.
Tidewater's net income for the three and nine months ended Sept. 30, 2023, was 49 cents a share and $1.13 a share, respectively. That compares to a net loss of 10 cents and 76 cents a share, respectively, for the three and nine months ended Sept. 30, 2022.
Day rates in the Americas region increased approximately 15.9% sequentially with particular areas of strength in the U.S. Gulf of Mexico and the Caribbean.
“The third quarter marks the third consecutive quarterly cyclical revenue and global average day rate high-water marks. Third quarter revenue nicely exceeded our expectations as a continued push on day rates globally drove consolidated day rates up by approximately $1,800 per day sequentially, representing the largest sequential improvement in day rates since the recovery began," Quintin Kneen, Tidewater’s president and CEO, said in a statement. "The pace of day rate expansion was largely a combination of legacy contracts rolling on to current market day rates and a meaningful step up in leading edge term contract day rates."
Houston-based Tidewater's leading edge term contracts increased to $28,609 in the third quarter, an improvement of approximately $5,100 per day over the prior quarter. The momentum in day rates is being driven by a global supply shortage of large and small offshore vessels.
"In fact, our medium and small classes of PSVs showed the most relative improvement in leading edge term contract day rates during the third quarter," said Kneen. "We remain confident in the outlook for the business as demand for our vessels remains robust across a variety of end markets, including offshore drilling, subsea, construction, offshore wind and existing production work."
Based on this, Tidewater has initiated revenue guidance for 2024 of $1.4 billion to $1.45 billion and initial gross margin guidance of 52%, which is driven by the company's projection of an increase in year-over-year day rates of over $4,000 and an annual utilization level of 86%, increases that are in line with Tidewater's recent quarterly improvements.
Also, Tidewater's board has authorized a stock repurchase program. Over the next four months, Tidewater is authorized to purchase up to $35 million of the company’s common stock.
“Turning to our regional operating results, each of our regions experienced an overall increase in revenue, gross profit, and average day rate, further evidence of the global shortage of large and small offshore vessels. Day rates in the Americas region increased approximately 15.9% sequentially with particular areas of strength in the U.S. Gulf of Mexico and the Caribbean. Day rates in West Africa increased 9.0% sequentially due to broad-based secular tailwinds in the region. Similarly, day rates in Asia Pacific increased by 6.7% sequentially as activity through-out Southeast Asia and Australia continues to improve. Day rates in the Europe and Mediterranean region moved up modestly during the quarter, up approximately 0.6%, as a somewhat muted late summer season in the North Sea, particularly for our large AHTS vessels, was offset by strength in the Mediterranean. Regional utilization was up in all regions except for West Africa region, where utilization was down due to higher frictional unemployment during the quarter.
“I am grateful to all of our diligent and committed employees who have contributed to our continued business success, and I would like to extend a special thank you to both the Tidewater and Solstad employees who have contributed to the integration of the newly acquired vessels to further enhance our industry-leading fleet. As always, we remain committed to providing a safe and rewarding environment for our employees as we move forward together building the safest, most sustainable, most reliable, most profitable, high specification offshore energy support vessel fleet in the world.”