• Revenue: $342 million for Q3 2024.
• Gross Profit: $66 million for Q3 2024.
• Net Income: $29.5 million for Q3 2024.
• Adjusted EBITDA: $88 million for Q3 2024.
• Operating Cash Flow: $56 million for Q3 2024.
• Free Cash Flow: $53 million for Q3 2024.
• Cash and Cash Equivalents: $324 million at quarter end.
• Liquidity: $399 million at quarter end.
• Year-to-Date Revenue: $1 billion.
• Year-to-Date Gross Profit: $161 million.
• Year-to-Date Net Income: $36 million.
• Year-to-Date Adjusted EBITDA: $232 million.
• Year-to-Date Operating Cash Flow: $108 million.
• Year-to-Date Free Cash Flow: $98 million.
• Debt: Funded debt of $324 million with negative net debt of $9 million at quarter end.
• 2024 Revenue Guidance: $1.3 billion to $1.365 billion.
• 2024 EBITDA Guidance: $280 million to $310 million.
• 2024 Free Cash Flow Guidance: $120 million to $150 million.
• 2024 Capital Spending Guidance: $55 million to $70 million.

• Warning! GuruFocus has detected 3 Warning Signs with HLX.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Helix Energy Solutions Group Inc (NYSE:HLX) reported strong financial performance with Q3 revenues of $342 million and a net income of $29.5 million.
• The company secured over $800 million in backlog through new contracts, ensuring multiple years of committed utilization.
• Robotics division showed strong performance with high utilization across six vessels, particularly in renewables projects.
• Helix Energy Solutions Group Inc (NYSE:HLX) has a strong cash position with $324 million in cash and cash equivalents.
• The company expects improved EBITDA in 2025, driven by new contracts with higher market rates.

Negative Points

• Financial results were negatively impacted by significant mobilizations and weather-related downtime, leading to deferred revenues and costs.
• The shallow water abandonment business experienced a sluggish market and was further impacted by hurricanes, resulting in lower than expected utilization.
• Production facilities were negatively impacted by unplanned shutdowns, particularly in the Thunder Hawk Field.
• There is uncertainty regarding the duration of contracts and potential extensions, which could affect future financial performance.
• The company faces challenges in balancing vessel deployment between regions, potentially impacting market share in key areas like the Gulf of Mexico.

Q & A Highlights

Q: How confident is Helix Energy Solutions about the improvement in the shallow water abandonment business for 2025? A: Brent Arriaga, Chief Accounting Officer, stated that the initial budgeting process indicates improvement over this year. While last year was an anomaly, the bidding activity is picking up, suggesting a return to the typical range initially predicted for this business.

Q: What is the outlook for Helix's free cash flow in 2025, and how does the company plan to use it? A: Brent Arriaga mentioned that they expect an improvement in free cash flow next year, targeting around $200 million. Owen Kratz, CEO, added that the company will prioritize capital allocation for growth, continue the share repurchase program, and build cash reserves, especially considering potential market softening.

Q: Will the $10 million revenue loss in Q3 due to weather-related downtime be recouped in Q4? A: Scotty Sparks, COO, clarified that the revenue loss from Q3 will not be recouped in Q4. The downtime was due to hurricanes affecting work sites, and while no hurricanes are currently expected, the company anticipates a seasonal drop in work as winter approaches.

Q: How is Helix positioned in terms of well intervention vessel availability for 2025 and 2026? A: Scotty Sparks explained that most of their heavy well intervention vessels are contracted for 2025, with improved market rates. For 2026, they have good visibility with ongoing contracts, but the North Sea vessels will continue to operate on a seasonal basis.

Q: What is the current and future outlook for the robotics market, particularly in trenching and ROV services? A: Scotty Sparks noted that the robotics market is tight, with strong demand in both renewables and oil and gas sectors. The company has contracted work through 2026 and expects continued high utilization and increased rates, especially in trenching.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.