Tidewater credits fleet renewal, increased utilisation for higher full-year revenues in 2024
Tidewater has confirmed revenue for the three and twelve months ended December 31, 2024 of US$345.1 million and US$1.346 billion, respectively, compared with US$302.7 million and US$1.01 billion, respectively, for the three and twelve months ended December 31, 2023.
Tidewater's net income for the three and twelve months ended December 31, 2024, was US$36.9 million (US$0.70 per common share) and US$180.7 million (US$3.40 per common share), respectively, compared with net income of US$37.7 million (US$0.70 per common share) and US$97.2 million (US$1.84 per common share), respectively, for the three and twelve months ended December 31, 2023.
"Revenue, gross margin, earnings and free cash flow all increased significantly as the fundamental supply and demand imbalance in the offshore vessel market persisted," Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented.
"Day rate progression realised during the year is the most substantial we’ve experienced since the offshore recovery began and well-beyond the historical rate of annual day rate progression we’ve seen in prior cycles.
"The financial successes realised during 2024 can be attributed to our multi-year effort to high-grade the fleet through the disposal of older, smaller vessels and through the acquisition of younger, higher-specification vessels, along with our short-term contracting strategy that has allowed us to realise the day rate benefits of vessel scarcity in a healthy demand environment.
Free cash flow for the year 2024 was US$331 million, a significant increase from the prior year, driven by improving day rate realisation and the full year’s benefit of the acquisition completed in 2023.
"During the year, we used US$103 million of cash to pay down the required amortisation on our outstanding debt and US$119.4 million to reduce the number of shares outstanding, inclusive of both open market repurchases and the reduction of shares in exchange for payment of employee taxes on the vesting of equity compensation," added Kneen.
"We are pleased with the free cash flow generation of the business and remain committed to directing our free cash flow to avenues to enhance shareholder value."
Kneen remarked that the fourth quarter of 2024 came in slightly better than anticipated, with revenue of US$345.1 million driven by an uptick in utilisation and gross margin cresting the 50 per cent threshold for the first time in nearly 16 years.
Adjusted earnings before tax of US$138.4 million and net income of US$36.9 million were both adversely impacted by the US$14.3 million foreign exchange loss due to the strengthening of the US dollar, whereas free cash flow of US$107.0 million improved nearly 60 per cent sequentially primarily through a combination of an increase in gross margin and a reduction in drydock spend.
"During the fourth quarter, we returned over 41 per cent of our free cash flow to shareholders in the form of share repurchases. The US$44.1 million of share repurchases during the fourth quarter was the maximum permissible amount of repurchases available to us under our existing debt agreements and was the largest amount of shares repurchased since the share repurchase program commenced in the fourth quarter of 2023."
Kneen added that visibility for 2025 has improved and can be characterised by a relatively slow start to the year, with improving demand fundamentals as the company progresses towards the end of the year.
"We anticipate revenue, gross margin and free cash flow for 2025 to look similar to or slightly better than 2024. We are encouraged by the nature of conversations with our customers as it relates to their longer-term plans for continued growth in offshore activity."
