Civeo Corp. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Australia: Executing growth strategy, strong occupancy, 23% revenue increase in Q4 2024 due to integrated services from $1.4 billion contract. Recently acquired four villages in Australian Bowen Basin, expected to be accretive to cash flow and expand presence.
• Canada: Lower build rooms due to customer capital spending reduction, economic/political uncertainty. Canadian lodge billed rooms didn't recover from wildfire impact. Began rightsizing Canadian business, incurring ~$3 million restructuring costs in Q1 2025, closing lodges and reducing overhead headcount by ~25%.
• Capital Allocation: 2024 CapEx down from 2023. Repurchased over 1.1 million shares in 2024 for ~$29.6 million. 2024 return of capital to shareholders $44 million, 65% of free cash flow.

Segment Performance

• Australia: Fourth quarter revenues were $110 million, up 23% from Q4 2023. Adjusted EBITDA was $22.2 million, up 3% from $21.5 million. Driven by increased integrated services activity from a $1.4 billion contract. Build rooms were 637,000, relatively flat. Daily room rate was $77, up from $74 due to CPI escalations. Recently acquired four villages in Australian Bowen Basin, expected to be accretive to cash flow.
• Canada: Fourth quarter revenues were $40.7 million, down from $72.7 million in Q4 2023. Adjusted EBITDA was negative $4.7 million, down from $3.5 million. Driven by wind down of LNG-related activity, lower build rooms, and customer focus on cost reductions. Build rooms in Canadian lodges totaled 360,000, down from 617,000 in Q4 2023. Daily room rate was $94, down from $95.

Guidance

• 2025 Consolidated: Revenue guidance $630M-$660M, adjusted EBITDA $80M-$90M, CapEx $25M-$30M. Excludes Australian acquisition closing in Q2. Currency exchange rate weakness and Canadian political uncertainty impact guidance. Australian customer activity strong, Canada undergoing transition with cost structure adjustments.
• Regional: Australia: Strong customer activity, continued growth in integrated services. Canada: Transition year, rightsizing cost structure, optimistic on medium/long-term opportunities like LNG ramp-up and pathways carbon capture.

Risks

• Canada: Political uncertainty leading to customer capital spending delays, reduced occupancy. Economic uncertainty affecting customer behavior.
• Currency Fluctuations: Weakening of Australian and Canadian currencies vs USD impacting EBITDA.
• Regulatory: Uncertainty around Australian acquisition closing conditions.

Question and Answer

• **Q: Incremental details on asset light vs asset-intensive businesses.

A: Asset-light includes third-party integrated services at customer-owned and hospitality at owned locations.**

• **Q: Seasonal distribution in 2025.

A: Historically 60-65% EBITDA in Q2-Q3, expected to continue excluding Australian acquisition timing.**

• **Q: Canada revenue stream.

A: Turnaround activity in Q2-Q3 is ~25-30% of total room nights, driven by climate and productivity.**

• **Q: Australia acquisition.

A: ~3.9x EBITDA, all cash deal, owner outsources integrated services, expected to close in Q2.**

• **Q: Free cash flow return to shareholders.

A: Based on dividend and opportunistic buybacks, post-acquisition ~1x levered, same framework applies.**

• **Q: Australia acquisition types and focus.

A: Looking for additive locations in Australia, focused on integrated services growth, activity in Canada's east for mining/infrastructure.