Helix Shares Advance on Higher Margins and Fleet Utilization

Helix Q4000
Helix ESG’s Q4000, (c) Helix ESG

Shares of subsea contractor HelixESG (NYSE:HLX) jumped over 10 percent this week after the company reported an extremely solid second quarter as a result of high utilization of their global fleet of assets.

The company notes they had over 98 percent utilization across their entire well intervention fleet including the Helix 534 which was operating in the U.S. Gulf of Mexico for Anadarko as well as all three of their assets working in the North Sea consisting of the Well Enhancer, Skandi Constructor and Seawell. All three are expected to remain at high utilization for rest of the year.

The well intervention rig Q4000 would have had a 5th straight quarter of 100% utilization had it not been required to come off location for a required ABS-class survey. The rig has full backlog through 2015 and their current clients have first right of refusal to extend commitments into 2017.

Helix notes their consolidated gross margins increased 600 base points to 36 percent.

Subsea robotics subsidiary Canyon Offshore had a record-breaking quarter while operating 14 vessels at 89 percent utilization, 9 of which were on spot charters plus 5 on long term charters. Canyon was also awarded a long term ROV services contract with McDermott for an undisclosed amount.

Five new ROVs were ordered adding to their current inventory of 55 ROVs, 2 ROVDrill units and 5 trenchers.

ROV utilization was up 17 percent year-on-year to 78 percent.

Looking ahead, Helix expects 2014 revenues to hit $1,060 million, or $200 million more than 2013 with earnings per share of around $1.70 as compared to $1.04 last year.