Yahoo Finance Bristow Group Inc (VTOL) Q1 2024 Earnings Call Transcript Highlights: Strategic Growth and ...
Adjusted EBITDA: $47.5 million in Q1 2024, up from $46 million in Q4 2023.
Operating Revenues: Slightly lower by $200,000 due to seasonal variations.
Operating Expenses: Decreased by $2.2 million, mainly due to reduced fuel and maintenance costs.
General and Administrative Expenses: Reduced by $800,000, driven by lower professional service and insurance costs.
Interest Income: Decreased due to lower investment balances.
Liquidity: Available liquidity stood at $223 million as of March 31, 2024.
Adjusted Free Cash Flow: $22 million for the quarter.
Long-Term Revenue Backlog: Approximately $4.2 billion as of March 31, 2024.
Annual Revenue: Last twelve months (LTM) revenue of $1.3 billion.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Bristow Group Inc (NYSE:VTOL) reported a strong Q1 with adjusted EBITDA increasing to $47.5 million, up from $46 million in the previous quarter.
The company has a robust liquidity position with $223 million available as of March 31, 2024, and an adjusted free cash flow of $22 million for the quarter.
Bristow Group Inc (NYSE:VTOL) is benefiting from a strong backlog of contracts worth approximately $4.2 billion, providing a stable revenue outlook.
The company is the largest global operator of S92, AW189, and AW139 helicopter models, which are in high demand in the offshore and search and rescue markets.
Bristow Group Inc (NYSE:VTOL) is well-positioned for future growth with strategic investments in new aircraft and technology, including a recent order of AW189 helicopters to meet rising customer demand.
Negative Points
Operating revenues slightly decreased by $200,000 due to lower seasonal activity in the fixed-wing business.
The company faces potential risks from foreign currency fluctuations, as noted in the variability of other income primarily from non-cash foreign currency gains and losses.
Interest income was reported lower due to decreased investment balances, which could impact financial income streams.
The company anticipates significant investments required for ramping up new government contracts, with about $300 million needed for new aircraft and infrastructure.
While Bristow Group Inc (NYSE:VTOL) is transitioning to new contracts, there is a risk of operational execution challenges, especially in the near term as these projects get underway.
Q & A Highlights
Q: What drove the outperformance in Q1, typically a seasonally lower quarter? A: Jennifer Whalen, CFO and Senior VP at Bristow Holdings US Inc, explained that the outperformance in Q1 was due to the new run rate for contracts that started in Norway and Brazil in the second half of 2023, setting a higher jumping-off point going forward.
Q: With respect to the contracts that will reprice in 2025 and beyond, what kind of uplift should we expect to see and what impact will that have on the margin profile? A: Christopher Bradshaw, Director at Bristow Aviation Holdings Ltd, noted that leading-edge rates are 25% or more higher than the legacy contracts expiring, which due to the operating leverage in Bristow's business, will have a profound impact on the company's cash flows.
Q: What is the right time to provide the long-term guidance now? A: Jennifer Whalen mentioned that 2025 is a transition year with two large projects starting, and providing guidance through 2026 offers clarity on the new earnings power post-transition.
Q: How do you balance the fleet and utilization needs into your long-term planning, especially considering the growth in both offshore energy and government services segments? A: Christopher Bradshaw highlighted that the government services provide a stable long-term cash flow foundation, allowing the offshore energy services to operate with less financial pressure, thus complementing each other and enabling effective long-term planning.
Q: What progress have you seen on the Advanced Air Mobility (AAM) front, and what are the timelines for these technologies? A: Christopher Bradshaw shared that Bristow is excited about AAM prospects, expecting the first aircraft to be certified by 2025. He emphasized Bristow's strong partnerships in developing these new technologies.
Q: Are customers indicating a willingness to utilize newer types of aircraft, such as those involved in AAM? A: Bradshaw confirmed positive indications from both new and existing customers, particularly large energy companies interested in meeting their carbon reduction targets, which align with Bristow's AAM offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
