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Tidewater offshore vessel at sea

Photo courtesy Tidewater

Tidewater Reports Stellar Q1 Results and Reiterates Positive Outlook for 2024

Mike Schuler
Total Views: 723
May 3, 2024

Tidewater Inc. (NYSE:TDW), a leading global provider of offshore service vessels (OSVs), reported impressive first quarter results as day rates for OSVs continue to rise.

Shares of Tidewater rose more than than 13% by midday on Friday.

The company reported a revenue of $321.2 million, which is a $18.5 million or 6.1% increase from the last quarter of 2023. This has been attributed to an increase in the average day rate, which rose to $19,563 per day, a $1,497 increase from the previous quarter.

Net income also saw a notable increase, reaching $47.0 million, up $9.4 million from the fourth quarter of 2023. The boosted financials were also reflected in their adjusted EBITDA which rose to $139.0 million, up $7.7 million from the previous quarter.

The company’s cash flow also saw significant growth. The net cash provided by operating activities increased to $54.8 million, up $7.5 million from Q4 2023, with free cash flow reaching $69.4 million, an increase of $8.4 million.

In addition to the impressive financial results, Tidewater also reduced its share count by 171,399 shares through year-to-date share repurchases of $16 million, at an average price of $93.34 per share. The share count was further reduced by 320,859 shares, in exchange for paying $28.5 million of employee taxes on the vesting of equity compensation at an average price of $88.95 per share.

As a result of the strong financial performance, the board has approved an additional share repurchase authorization of $18.1 million, bringing the total outstanding authorization to $50.7 million, the maximum allowed under existing debt agreements.

Despite the typical first quarter slowdown due to seasonality in certain markets and a front-loaded drydock schedule, the company’s consolidated global average day rate continued to rise.

“Each of our classes of vessels saw day rate expansion during the first quarter, with material improvements in each of our large vessel classes and particular strength in our >16K AHTS class vessels,” said Tidewater’s CEO, Quintin Kneen. “This is notable as the busiest time of the calendar year for AHTS vessels is typically during the second and third quarters, a seasonably favorable time of year for AHTS activity. We believe the strength shown in our large AHTS vessels is a leading indicator for the relative strength of the market as we progress through 2024.

The company reaffirmed its full-year revenue guidance of $1.40 to $1.45 billion and gross margin guidance of 52.0%.

“We remain encouraged by the outlook for demand over the coming years and by the persistent tightness in vessel supply. Newbuilding vessel orders still have not materialized in any meaningful way, providing for a significant runway of time before new vessel supply can enter the market,” said Kneen.

“We remain optimistic on the continued pace of offshore activity acceleration as a result of the constructive leading indicators we observed during the first quarter,” he added.

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