Tidewater Reports Robust Growth in Revenue and Day Rates

Tidewater Inc. (NYSE: TDW), a leading global provider of offshore service vessels (OSVs), reported strong financial results for Q2 2024, with a revenue of $339.2 million, a 5.6% increase from Q1.

Key highlights included a higher average day rate of $21,130 and improved leading edge term contract rates across multiple vessel categories. Tidewater’s net income for the quarter was $50.4 million, with adjusted EBITDA of $139.7 million, net cash from operating activities of $78.6 million, and free cash flow of $87.6 million, all showing growth from the previous quarter.

Quintin Kneen, Tidewater’s President and Chief Executive Officer, stated, “Second quarter revenue came in nicely above our expectations driven by continued strength in global day rates. Our consolidated global average day rate expanded materially during the quarter, with the average day rate increasing nearly $1,600 per day sequentially, the second largest sequential increase in day rate since the offshore vessel recovery began in early 2022.”

Tidewater repurchased 176,555 shares during the quarter for $16.9 million at an average price of $95.66 per share and received board approval for an additional $13.9 million in share repurchase authorization, totaling $47.7 million. The company updated its 2024 revenue guidance to $1.39-$1.41 billion with a gross margin of 51%.

Kneen noted broad-based improvements in day rates across all vessel classes and segments, with significant day rate increases in large and mid-sized AHTS vessels on both term contract and spot basis due to robust drilling activity and preparations for future projects.

Kneen also highlighted that chartering activity for PSVs and AHTS vessels continued to improve, especially in Europe and Mediterranean and Asia Pacific. He said that despite experiencing a 6% decline in the average day rate for term contracts due to smaller vessels ending contracts early in the Middle East, new contracts achieved a 29% higher average day rate.

“We generated $87.6 million of free cash flow during the second quarter, a nice increase from the first quarter and a demonstration of the free cash flow generation capability of the fleet,” said Kneen.

Looking ahead, Tidewater anticipates continued strength in demand for its vessels, though several drilling campaigns are expected to start later in the third quarter and early fourth quarter than originally anticipated. The company has updated its full-year revenue guidance to $1.39 billion to $1.41 billion and gross margin guidance to 51%.

“We remain optimistic about the outlook for 2025, as the observable supply and demand factors driving the offshore vessel industry remain highly constructive, which should allow us to maintain the pace of day rate increases that we have achieved over the past year, combined with a substantial increase in available vessel days as the heaviest drydock schedule in 2024 rolls into the lightest drydock schedule in 2025, naturally lifting vessel utilization,” concluded Kneen.

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