Tidewater Inc., a leading global provider of offshore support vessels, has reported a strong start to 2023, posting its highest quarterly revenue since the fourth quarter of 2015.
First quarter revenue hit $193.1 million, representing an 83% increase over the first quarter of 2022. Net income hit $10.7 million, or $0.21 per share, compared to a net loss of $12.2 million for the same period last year. Tidewater’s adjusted EBITDA was $59.1 million, the highest quarterly EBITDA since Q3 2015, and its quarter-end net debt balance was $4.3 million.
Tidewater has been upbeat on an offshore support vessel sector recovery for nearly a year now amid rising oil prices and growing sentiment that the offshore oil and gas market has finally turned a corner following a prolonged 8-year downturn. The company previously hailed the second quarter of 2022 as an “inflection point” in the sector.
Tidewater’s President and Chief Executive Officer, Quintin Kneen, said he was encouraged by the continued momentum in the first quarter despite the period typically being the slowest quarter of the year, primarily due to harsher weather conditions, calendar year budgets, and the contracting habits of customers. Kneen said the quarter was notable for new cyclical revenue and global average day rate high-water marks. Additionally, all individual vessel classes, except the 4-8k AHTS class, increased in average day rate during the quarter.
“Consolidated global average day rates continued the upward trend we saw throughout 2022, with the average day rate increasing nearly $1,100 per day sequentially,” Kneen said.
“Seasonality did play a factor during the quarter as activity in the North Sea and the Mediterranean declined sequentially though, notably, we did see net day rate improvements in these markets during the quarter,” he added.
Kneen attributed the quarter’s strong results to the company’s decision to reposition vessels and perform as many drydocks as possible during the period, allowing Tidewater to maximize the utilization and profitability during the higher activity periods typically seen in the second and third quarters.
During the first quarter, Tidewater also announced an agreement to acquire 37 PSVs from Solstad Offshore, a move Kneen said the company was excited about. Tidewater expects to close the acquisition by the end of the second quarter and is evaluating a variety of commercial banking and debt capital market financing alternatives to optimize the cost of capital and financial flexibility.
Tidewater reiterates its 2023 annual guidance of $900 million of revenue and approximately 50.0% vessel operating margin for the legacy Tidewater business and reiterates its updated pro forma 2023 guidance of $1.03 billion of revenue and approximately 50.0% vessel operating margin, which contemplates closing the Solstad PSV acquisition by the end of the second quarter of 2023.