Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q2 2023 Earnings Presentation
36 slides from Helix Energy Solutions's earnings presentation, Jul 27, 2023
Slide 1: Second Quarter Conference Call
July 27, 2023 Second Quarter Conference Call 2023
Slide 2: Forward-Looking Statements
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
Slide 3: At Helix, our purpose is to enable energy transition
At Helix, our purpose is to enable energy transition through: Maximizing Existing Lowering Decommissioning Offshore Renewables & Reserves Costs Wind Farms Enhancing remaining production Safely returning the seabed to Transitioning our energy economy from mature oil and gas wells its original state t
Slide 4: Agenda
PRESENTATION OUTLINE Agenda • Executive Summary (pg. 5) • Operational Highlights (pg. 10) • Key Financial Metrics (pg. 20) • 2023 Outlook (pg. 23) • Sustainability and ESG (pg. 30) • Non-GAAP Reconciliations (pg. 33) • Questions and Answers 4 4
Slide 5: Executive Summary
ww Executive Summary ENERGY SOLUTIONS
Slide 6: Summary of Results
EXECUTIVE SUMMARY Summary of Results ($ in millions, except per share amounts, unaudited) Three Months Ended Six Months Ended 6/30/23 6/30/22 3/31/23 6/30/23 6/30/22 Revenues $ 309 $ 163 $ 250 $ 559 $ 313 Gross profit (loss) $ 55 $ (1) $ 15 $ 71 $ (20) 18% (1)% 6% 13% (6)% Net income (loss) $ 7 $ (3
Slide 7: Second Quarter 2023 Highlights
EXECUTIVE SUMMARY Second Quarter 2023 Highlights Financial Results Revenue by Core Market • Net income of $7 million, $0.05 per diluted share Quarter Ended June 30, 2023 • Adjusted EBITDA1 of $71 million Renewables Other • Operating cash flows of $32 million $35 million $2 million • Free Cash Flow1
Slide 8: Second Quarter 2023 Segments
EXECUTIVE SUMMARY Second Quarter 2023 Segments Well Intervention Shallow Water Abandonment • Well Intervention vessel fleet utilization 84% • 78% liftboat, OSV and crewboat combined • 53% in the GOM utilization • 97% in the North Sea and Asia Pacific • 53% diving support vessel (DSV) utilization • 9
Slide 9: Balance Sheet
EXECUTIVE SUMMARY Balance Sheet Q2 2023 Share Repurchases • Cash and cash equivalents of $183 million • Acquired 750,000 Helix common shares for • Liquidity1 of $285 million approximately $5.1 million, average $6.77 per share, under our repurchase program in Q2 • Long-term debt2 of $261 million • Ye
Slide 10: Operational Highlights
Operational Highlights 10
Slide 11: Segment Results
OPERATIONAL HIGHLIGHTS Segment Results ($ in millions, unaudited) Three Months Ended Six Months Ended 6/30/23 6/30/22 3/31/23 6/30/23 6/30/22 Revenues Well Intervention $ 154 $ 106 $ 142 $ 297 $ 213 Robotics 70 50 49 119 87 1 Shallow Water Abandonment 76 - 49 126 - Production Facilities 23 18 21 44
Slide 12: Well Intervention - Gulf of Mexico
OPERATIONAL HIGHLIGHTS Well Intervention - Gulf of Mexico • Q5000 – 99% utilized in Q2; performed a combination of production enhancement and abandonment scopes on five wells under a multi- year campaign for Shell • Q4000 – 7% utilized in Q2; completed a decommissioning campaign for one customer and
Slide 13: Well Intervention - North Sea & Asia Pacific
OPERATIONAL HIGHLIGHTS Well Intervention - North Sea & Asia Pacific • Well Enhancer – 100% utilized in Q2; worked for four customers performing production enhancement operations on six wells and decommissioning operations on one well • Seawell – 100% utilized in Q2; worked for three customers perfor
Slide 14: Well Intervention - Brazil
OPERATIONAL HIGHLIGHTS Well Intervention - Brazil • Siem Helix 1 – 94% utilized in Q2; performed decommissioning scopes on five wells in the Campos basin for Trident Energy • Siem Helix 2 – 100% utilized in Q2; performed production enhancement scope on two wells and decommissioning scopes on two wel
Slide 15: Well Intervention Utilization
OPERATIONAL HIGHLIGHTS Well Intervention Utilization 99% 99% 100% 100% 99% 97% 97% 100% 99% 98% 97% 92% 89% 87% 88% 88% 97% 90% 93% 88% 92% 79% 74% 86% 80% 83% 80% 79% 72% 70% 63% 71% 68% 60% 58% 50% 52% 53% 40% 42% 40% 38% 38% 44% 30% 31% 20% 9% 10% 0% Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 2
Slide 16: Robotics
OPERATIONAL HIGHLIGHTS Robotics • Grand Canyon II (Asia Pacific) – 100% utilized in Q2 performing long-term decommissioning project offshore Thailand • Grand Canyon III (North Sea) – 89% utilized in Q2 performing two separate renewables trenching projects for one client • Shelia Bordelon (GOM) – 91%
Slide 17: Robotics Utilization
OPERATIONAL HIGHLIGHTS Robotics Utilization 499 70% 500 450 66% 435 450 419 58% 60% 58% 53% 376 400 358 370 56% 50% 336 350 332 43% 323 Utilization 295 300 Days 40% 37% 36% 34% 252 250 32% 38% 35% 30% 236 24% 200 176 154 160 156 20% 165 150 119 92 84 90 90 100 72 81 10% 66 50 0% - Q2 20 Q3 20 Q4 20
Slide 18: Shallow Water Abandonment
OPERATIONAL HIGHLIGHTS Shallow Water Abandonment Offshore • Liftboats – nine liftboats with combined utilization of 88% in Q2 performing make safe, well abandonment, pipeline abandonment, CT, wireline, construction support, production support and dive support operations • OSVs – six OSVs and one cre
Slide 19: Shallow Water Abandonment Utilization
OPERATIONAL HIGHLIGHTS Shallow Water Abandonment Utilization The graph below presents the utilization statistics of the Helix Alliance vessels and equipment following their acquisition on July 1, 2022 100% 95% 92% 88% 90% 86% 86% 79% 80% 80% 76% 77% 74% 72% 71% 70% 69% 63% 60% 56% 53% 50% 44% 41% 40
Slide 20: Key Financial Metrics
Key Financial Metrics 20
Slide 21: Debt Instrument Profile
KEY FINANCIAL METRICS Debt Instrument Profile Principal Payment Schedule at 6/30/23 Total funded debt1 of $267 million at 6/30/23 ($ in millions) • $30 million Convertible Senior Notes due 2023 – 4.125% $250 $210 • Final maturity September 15, 2023 $200 • $200 million Convertible Senior Notes due 20
Slide 22: Debt & Liquidity Profile
KEY FINANCIAL METRICS Debt & Liquidity Profile ($ in millions) $500 $426 $380 $452 $400 $348 $305 $300 $285 $285 $200 $279 $291 $254 $267 $187 $100 $208 $183 $0 $22 $(75) $(78) ($100) $(161) $(143) $(58) ($200) $(229) $(261) $(305) $(264) $(350) ($300) $(406) $(496) $(440) ($400) ($500) 12/31/17 12/
Slide 23: Outlook
2023 Outlook 23
Slide 24: Forecast
2023 OUTLOOK Forecast ($ in millions) 2023 2022 Outlook Actual1 Revenues $ 1,175 - 1,250 $ 873 Adjusted EBITDA2 240 - 270 121 Free Cash Flow2 130 - 170 18 Capital Additions3 65 - 80 69 Revenue Split: Well Intervention $ 680 - 720 $ 524 Robotics 235 - 245 192 Shallow Water Abandonment1 230 - 250 125
Slide 25: Well Intervention
2023 OUTLOOK Well Intervention • Q4000 (Gulf of Mexico) – expected to complete • Q7000 (Asia Pacific) – decommissioning operations regulatory dry dock late-July followed by contracted offshore New Zealand during Q3 followed by work into Q4 with identified opportunities for remainder contracted work
Slide 26: Robotics
2023 OUTLOOK Robotics • Grand Canyon II (Asia Pacific) – performing • Horizon Enabler (North Sea) – spot vessel contracted decommissioning and ROV support work performing seasonal trenching campaign into Q4; offshore Thailand with full utilization expected during identified projects in Q4 in Mediter
Slide 27: Shallow Water Abandonment
2023 OUTLOOK Shallow Water Abandonment • Offshore • Diving & Heavy Lift • Liftboats – expected high utilization on eight of • DSVs – saturation diving vessel Triton Explorer nine liftboats for the remainder of 2023; one expected to have high utilization into late Q4; liftboat undergoing regulatory o
Slide 28: Capital Additions & Balance Sheet
2023 OUTLOOK Capital Additions & Balance Sheet 2023 Capital additions are forecasted at approximately $65 – $80 million: • Primarily maintenance capex related to regulatory recertification costs of our vessels and systems, which are reported in operating cash flows • Capital additions1 during Q2 app
Slide 29: Beyond 2023
2023 OUTLOOK Beyond 2023 We plan to continue momentum on the three legs of our Robotics Energy Transition business model: production • Anticipate continued strong renewables trenching maximization, renewables and decommissioning market • Expected continued strong operating and free cash • Expect con
Slide 30: Sustainability and ESG
Sustainability and ESG 30
Slide 31: Corporate Sustainability
SUSTAINABILITY AND ESG Corporate Sustainability “Safety, Sustainability and Value Creation – our core goals – support our vision as a preeminent offshore energy transition Company.” Owen Kratz, President and Chief Executive Officer Sustainability continues to drive our business strategy and decision
Slide 32: Environmental, Social and Governance
SUSTAINABILITY AND ESG Environmental, Social and Governance Environmental • Our business supports the responsible transition from a carbon-based economy through a three-pronged strategy of maximizing existing oil and gas reserves, applying the techniques and technologies proven in offshore oil and g
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations 33
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Non-GAAP Reconciliations Three Months Ended Six Months Ended Year Ended ($ in thousands, unaudited) 6/30/23 6/30/22 3/31/23 6/30/23 6/30/22 12/31/2022 Reconciliation from Net Income (Loss) to Adjusted EBITDA: Net income (loss) $ 7,100 $ (29,699) $ (5,165) $ 1,935 $ (71,730)
Slide 35: Non-GAAP Definitions
NON-GAAP RECONCILIATIONS Non-GAAP Definitions Non-GAAP Financial Measures We define EBITDA as earnings before income taxes, net interest expense, gains or losses on extinguishment of long-term debt, gains and losses on equity investments, net other income or expense, and depreciation and amortizatio
Slide 36: Helix Energy Solutions
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Helix Energy Solutions Group — Q2 2023 Earnings Presentation on 6ix