February 27, 2024
Fourth Quarter 2023 Conference Call
INTRODUCTION
Forward-Looking Statements
This presentation contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any statements regarding: our plans, strategies and objectives for future operations; any projections of financial items including projections as to guidance and other outlook information; future operations expenditures; our ability to enter into, renew and/or perform commercial contracts; the spot market; our current work continuing; visibility and future utilization; our protocols and plans; energy transition or energy security; our spending and cost management efforts and our ability to manage changes; oil price volatility and its effects and results; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions, including the integration of the Alliance acquisition and the earn-out payable in connection therewith and any subsequently identified legacy issues with respect thereto; developments; any financing transactions or arrangements or our ability to enter into such transactions or arrangements; our sustainability initiatives; future economic conditions or performance; our share repurchase program or execution; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that could cause results to differ materially from those in the forward-looking statements, including but not limited to market conditions and the demand for our services; volatility of oil and natural gas prices; results from acquired properties; our ability to secure and realize backlog; the performance of contracts by customers, suppliers and other counterparties; actions by governmental and regulatory authorities; operating hazards and delays, which include delays in delivery, chartering or customer acceptance of assets or terms of their acceptance; the effectiveness of our sustainability initiatives and disclosures; human capital management issues; complexities of global political and economic developments; geologic risks; and other risks described from time to time in our filings with the Securities and Exchange Commission ("SEC"), including our most recently filed Annual Report on Form 10-K, which are available free of charge on the SEC's website at www.sec.gov.We assume no obligation and do not intend to update these forward-looking statements, which speak only as of their respective dates, except as required by law.
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2 |
2 |
At Helix, our purpose
is to enable energy transition through:
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Maximizing Existing |
Lowering Decommissioning |
Offshore Renewables & |
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Reserves |
Costs |
Wind Farms |
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Enhancing remaining production |
Restoring the seabed in an |
Transitioning our energy economy |
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from existing oil and gas wells |
environmentally safe manner |
to a sustainable model |
PRESENTATION OUTLINE
Agenda
- Executive Summary (pg. 5)
- Operational Highlights (pg. 12)
- Key Financial Metrics (pg. 22)
- 2024 Outlook (pg. 27)
- Non-GAAPReconciliations (pg. 35)
- Questions and Answers
4
Executive Summary
5
EXECUTIVE SUMMARY
Summary of Results
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($ in millions, except per share amounts, unaudited) |
Three Months Ended |
Year Ended |
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12/31/23 |
12/31/22 |
9/30/23 |
12/31/23 |
12/31/22 |
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Revenues |
$ |
335 |
$ |
288 |
$ |
396 |
$ |
1,290 |
$ |
873 |
||||
|
Gross profit |
$ |
49 |
$ |
31 |
$ |
81 |
$ |
200 |
$ |
51 |
||||
|
15% |
11% |
20% |
16% |
6% |
||||||||||
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Net income (loss) |
$ |
(28) |
$ |
3 |
$ |
16 |
$ |
(11) |
$ |
(88) |
||||
|
Basic earnings (loss) per share |
$ |
(0.19) |
$ |
0.02 |
$ |
0.10 |
$ |
(0.07) |
$ |
(0.58) |
||||
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Diluted earnings (loss) per share |
$ |
(0.19) |
$ |
0.02 |
$ |
0.10 |
$ |
(0.07) |
$ |
(0.58) |
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Adjusted EBITDA1 |
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Business segments |
$ |
85 |
$ |
65 |
$ |
116 |
$ |
335 |
$ |
169 |
||||
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Corporate, eliminations and other |
(15) |
(16) |
(20) |
(62) |
(48) |
|||||||||
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Adjusted EBITDA1 |
$ |
71 |
$ |
49 |
$ |
96 |
$ |
273 |
$ |
121 |
||||
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Cash and cash equivalents2 |
$ |
332 |
$ |
187 |
$ |
168 |
$ |
332 |
$ |
187 |
||||
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Net Debt1,3 |
$ |
30 |
$ |
75 |
$ |
59 |
$ |
30 |
$ |
75 |
||||
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Cash flows from operating activities |
$ |
95 |
$ |
50 |
$ |
32 |
$ |
152 |
$ |
51 |
||||
|
Free Cash Flow1 |
$ |
92 |
$ |
21 |
$ |
23 |
$ |
134 |
$ |
18 |
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Adjusted EBITDA, Net Debt and Free Cash Flow are non-GAAP financial measures; see non-GAAP reconciliations below
2 Excludes restricted cash of $3 million as of 12/31/22
- Net Debt is calculated using U.S. GAAP carrying values for long-term debt. Helix has issued a redemption notice for the remaining 2026 Convertible Senior Notes, and investors may elect to convert their notes. Helix will settle all redemptions and conversions in cash at amounts that we expect will exceed the notes' current carrying values.
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6 |
Amounts may not add due to rounding |
6 |
EXECUTIVE SUMMARY
Fourth Quarter 2023 Highlights
Financial Results
- Net loss of $28 million, $(0.19) per diluted share
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- Net loss includes pre-tax losses of $37 million related to the repurchase of $160 million of our Convertible Senior Notes due 2026 (2026 Notes) and $11 million related to the change in the value of the Alliance earnout
- Adjusted EBITDA1 of $71 million
- Operating cash flows of $95 million
- Free Cash Flow1 of $92 million
- Issued $300 million of 9.75% Senior Notes due 2029 (2029 Notes) and repurchased $160 million principal amount of 2026 Notes
Operations
- High utilization in Well Intervention segment across all regions
- Good winter season utilization in the North Sea (Well Intervention and Robotics) and Gulf of Mexico Shelf (Shallow Water Abandonment)
- Continued progress on Gulf of Mexico shallow water full-field decommissioning campaign
- Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures; see non-GAAP reconciliations below
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7 |
7 |
EXECUTIVE SUMMARY
Full Year 2023 Highlights
Financial Results
- Net loss of $11 million, $(0.07) per diluted share
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- Net loss includes pre-tax losses of $37 million related to the repurchase of $160 million of our 2026 Notes and $42 million related to the change in the value of the Alliance earnout
- Adjusted EBITDA1 of $273 million
- Operating cash flows of $152 million
- Free Cash Flow1 of $134 million
- Capital additions2 during 2023 of $90 million included:
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- $59 million of regulatory certification costs
- $31 million of capital expenditures, including acquisition of five plug and abandonment (P&A) systems
Operations
- Strong recovery despite extended docking on Q4000 and legacy contracts in 2023
- Completed scheduled regulatory inspections on five well intervention vessels
- Solid performance by Shallow Water Abandonment, including commencement of 39-wellfull-field decommissioning contract
- High winter-season utilization in North Sea Well Intervention
- Ongoing strong renewables and trenching operations, with expansion of trenching into Asia Pacific and U.S. east coast
- Transition of the Q7000 to Asia Pacific and commencement of decommissioning campaign
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1 |
Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures; see non-GAAP reconciliations below |
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8 |
2 |
Capital additions represents total accrued capital additions; total cash capital spending was approximately $82 million during 2023 |
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8 |
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EXECUTIVE SUMMARY
Fourth Quarter 2023 Segments
Well Intervention
- Well Intervention vessel fleet utilization 95%
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- 97% in the GOM
- 89% in the North Sea and Asia Pacific
- 99% in Brazil
- 15K IRS 32% utilization during quarter; 10K IRS working on contract offshore Australia; ROAM mobilizing for Australia project on Q7000
Robotics
- Robotics chartered vessels utilization 97%
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- 463 total vessel days (92 spot vessel days)
- 271 vessel trenching days
- ROV and trencher utilization 68%
Shallow Water Abandonment
- 76% liftboat, offshore supply vessel (OSV) and crewboat combined utilization
- 46% diving support vessel (DSV) utilization
- 76% utilization on the Epic Hedron heavy lift barge
- 1,386 days, or 58%, combined utilization on 20 P&A systems and six coiled tubing (CT) systems
Production Facilities
- Helix Producer I operated at full rates
- Lower oil and gas production due to Thunder Hawk wells being shut in throughout Q4
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EXECUTIVE SUMMARY
Debt Refinancing
2029 Senior Notes
- Issued $300 million of 9.75% Senior Notes due 2029
- Issuance Ratings: B1 (Moody's) / BB- (Fitch) / BB- (S&P)
2026 Convertible Senior Note Repurchases
- Repurchased $160 million principal amount of our 2026 Notes in December 2023
- Paid $231 million in cash and issued 1.5 million Helix shares to investors
- Proportionate unwind of capped calls, received proceeds of $16 million
- Removed 22.9 million shares underlying the repurchased 2026 Notes
- Inducement loss of $37 million recognized related to repurchase and capped call settlement
- In January 2024, Helix issued a redemption notice for the remaining $40 million principal amount of the 2026 Notes to be settled March 2024
Refinancing
- 2029 Notes offer traditional debt-only structure
- Extends long-term debt maturity to 2029
- Eliminates dilution / conversion cost risk associated with 28.7 million shares underlying the 2026 Notes
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10 |
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Attachments
Disclaimer
Helix Energy Solutions Group Inc. published this content on 27 February 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2024 23:18:14 UTC.
