Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q3 2022 Earnings Presentation
35 slides from Helix Energy Solutions's earnings presentation, Oct 25, 2022
Slide 1: Third Quarter 2022 Conference Call
October 25, 2022 Third Quarter 2022 Conference Call
Slide 2: Forward-Looking Statements
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
Slide 3: Presentation Outline
PRESENTATION OUTLINE • Executive Summary (pg. 4) • Operational Highlights by Segment (pg. 10) • Key Financial Metrics (pg. 20) • 2022 Outlook (pg. 23) • Environmental, Social and Governance (pg. 31) • Non-GAAP Reconciliations (pg. 32) • Questions and Answers 3
Slide 4: Executive Summary
Executive Summary ENERGY SOLUTIONS,
Slide 5: Executive Summary – Q3 2022 Acquisitions
EXECUTIVE SUMMARY – Q3 2022 ACQUISITIONS Alliance • Alliance group of companies (Alliance) acquired on July 1, 2022 • Acquisition price of $119 million cash paid at closing, plus estimated earnout due 2024 • Alliance includes: • Alliance Offshore – ten lift boats, six offshore support vessels (OSVs)
Slide 6: Executive Summary
EXECUTIVE SUMMARY ($ in millions, except per share amounts, unaudited) Three Months Ended Nine Months Ended 9/30/22 9/30/21 6/30/22 9/30/22 9/30/21 Revenues $ 273 $ 181 $ 163 $ 585 $ 506 Gross profit (loss) $ 39 $ 3 $ (1) $ 19 $ 21 14% 2% (1)% 3% 4% 1 Net loss $ (19) $ (19) $ (30) $ (90) $ (36) Dilu
Slide 7: Executive Summary – Q3 2022 Highlights
EXECUTIVE SUMMARY – Q3 2022 HIGHLIGHTS Financial Results • Net loss1 of $19 million, $(0.12) per diluted share • Adjusted EBITDA2 of $53 million • Operating cash flows of $25 million • Free Cash Flow2 of $22 million Operations • Strong utilization in the GOM and North Sea • Resumed campaign in Niger
Slide 8: Executive Summary – Q3 2022 Segments
EXECUTIVE SUMMARY – Q3 2022 SEGMENTS Well Intervention Shallow Water Abandonment • Well Intervention vessel fleet utilization 87% • 81% Liftboats and OSV utilization • 88% in the GOM • 86% Diving support vessel utilization • 79% in the North Sea and West Africa • 41% Epic Hedron utilization • 99% in
Slide 9: Executive Summary – Balance Sheet
EXECUTIVE SUMMARY – BALANCE SHEET Q3 2022 • Cash and cash equivalents of $162 million (excludes $3 million of restricted cash) • Liquidity1 of $244 million • Long-term debt2 of $264 million • Net debt3 of $99 million 1 Liquidity at September 30, 2022 is calculated as the sum of cash and cash equival
Slide 10: Operational Highlights By Segment
Operational Highlights By Segment 10
Slide 11: Business Segment Results
BUSINESS SEGMENT RESULTS ($ in millions, unaudited) Three Months Ended Nine Months Ended 9/30/22 9/30/21 6/30/22 9/30/22 9/30/21 Revenues Well Intervention $ 144 $ 131 $ 106 $ 357 $ 397 Robotics 56 43 50 143 96 1 Shallow Water Abandonment 67 - - 67 - Production Facilities 18 19 18 54 49 Intercompany
Slide 12: Well Intervention – Gulf of Mexico
WELL INTERVENTION – GULF OF MEXICO • Q5000 – 94% utilized in Q3; performed production enhancement and abandonment scopes on three wells for two customers including one with the 15K IRS; subsequently commenced work for Shell on a multi-year campaign • Q4000 – 81% utilized in Q3; completed abandonment
Slide 13: Well Intervention – North Sea and West Africa
WELL INTERVENTION – NORTH SEA AND WEST AFRICA • Well Enhancer – 80% utilized in Q3; performed enhancement and decommissioning operations on four wells for two customers including West of Shetland for one customer; vessel incurred breakdown periods during Q3 • Seawell – 99% utilized in Q3; performed
Slide 14: Well Intervention – Brazil
WELL INTERVENTION – BRAZIL • Siem Helix 1 – 99% utilized in Q3; performed ROV work scopes for Trident Energy in preparation for decommissioning campaign; vessel performed two IRM scopes under a five-day term assignment for another customer during the quarter • Siem Helix 2 – 100% utilized in Q3 for
Slide 15: Well Intervention – Utilization
WELL INTERVENTION – UTILIZATION 99% 99% 99% 98% 100% 100% 99% 100% 93% 87% 88% 90% 92% 89% 88% 86% 88% 80% 83% 74% 80% 79% 70% 72% 63% 71% 63% 60% 59% 58% 50% 52% 40% 44% 40% 31% 38% 38% 30% 42% 20% 10% 9% 0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Gulf of Mexico¹ North Sea
Slide 16: Robotics
ROBOTICS • Grand Canyon II (Asia Pacific) – 100% utilized in Q3 performing ROV support for windfarm project offshore Taiwan • Grand Canyon III (North Sea) – 100% utilized in Q3; performed renewables trenching operations for two customers and oil and gas trenching for another customer • Shelia Bordel
Slide 17: Robotics Utilization
ROBOTICS UTILIZATION 499 70% 500 450 66% 450 60% 405 419 400 376 370 53% 50% 358 336 350 43% 323 38% 300 40% 37% 36% 34% 34% 35% 32% 250 236 30% 24% 200 176 154 165 20% 150 119 92 84 90 90 100 72 81 10% 66 42 50 0% - Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Vessel Days Trenc
Slide 18: Shallow Water Abandonment
SHALLOW WATER ABANDONMENT • Offshore – ten liftboats with combined utilization of 72% in Q3 performing make safe, well abandonment, pipeline abandonment, coiled tubing, wireline, construction support, production support and dive support operations for five customers; six OSVs and one crew boat with
Slide 19: Shallow Water Abandonment Utilization – Q3 2022
SHALLOW WATER ABANDONMENT UTILIZATION – Q3 2022 Vessel1 Utilization System2 Utilization 100% 1,000 95% 909 (71%) 90% 86% 900 80% 800 72% 70% 700 60% 600 50% 500 41% 40% 400 30% 300 168 (30%) 20% 200 10% 100 0% - % Utilization Days Utilization Liftboats OSVs and Crew Boat Diving Support Vessels Heavy
Slide 20: Key Financial Metrics
Key Financial Metrics 20
Slide 21: Debt Instrument Profile
DEBT INSTRUMENT PROFILE Principal Payment Schedule at 9/30/22 Total funded debt1 of $271 million at 9/30/22 ($ in millions) • $30 million Convertible Senior Notes due 2023 – 4.125% $250 • $200 million Convertible Senior Notes due 2026 – 6.75% $210 • $41 million MARAD Debt – 4.93% $200 • Semi-annual
Slide 22: Debt & Liquidity Profile
DEBT & LIQUIDITY PROFILE ($ in millions) $500 $426 $380 $452 $400 $348 $305 $300 $244 $200 $279 $291 $254 $267 $100 $208 $162 $22 $0 $(99) ($100) $(161) $(143) $(58) ($200) $(229) $(305) $(264) $(350) ($300) $(406) $(496) $(440) ($400) ($500) 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 9/30/22 Cash
Slide 23: 2022 Outlook
2022 Outlook 23
Slide 24: 2022 Outlook: Forecast
2022 OUTLOOK: FORECAST1 ($ in millions) 2022 2021 Outlook1 Actual Revenues $ 785 - 860 $ 675 Adjusted EBITDA2 100 - 120 96 Free Cash Flow2 0 - 30 132 Capital Additions3 50 - 60 17 Revenue Split: Well Intervention $ 480 - 515 $ 517 Robotics 180 - 200 137 Shallow Water Abandonment1 105 - 120 - Product
Slide 25: 2022 Outlook – Well Intervention
2022 OUTLOOK – WELL INTERVENTION • Q4000 (Gulf of Mexico) – contracted work through Q4 with expected strong utilization during remainder of 2022 and into 2023 • Q5000 (Gulf of Mexico) – contracted work on the Shell multi-year campaign through remainder of 2022 and into 2023 • IRS rental units (Gulf
Slide 26: 2022 Outlook – Robotics
2022 OUTLOOK – ROBOTICS • Grand Canyon II (Asia Pacific) – returning to Thailand in Q4 for contracted decommissioning and ROV support work; vessel expected to have strong utilization through remainder of 2022 • Grand Canyon III (North Sea) – continuing to perform seasonal trenching campaign for seve
Slide 27: 2022 Outlook – Shallow Water Abandonment
2022 OUTLOOK – SHALLOW WATER ABANDONMENT • Offshore – expect stable utilization on seven to nine liftboats and variable seasonal utilization on OSVs and crew boat for remainder of 2022 • Energy Services – strong utilization for eight to 12 P&A systems and one to three coiled tubing systems expected
Slide 28: 2022 Outlook: Capital Additions & Balance Sheet
2022 OUTLOOK: CAPITAL ADDITIONS & BALANCE SHEET 2022 Capital additions are forecasted at approximately $50 - $60 million: • Capital additions during Q3 approximated $13 million and included • Approximately $11 million for regulatory recertification costs, reported in operating cash flows • Approxima
Slide 29: Beyond 2022
BEYOND 2022 • Continue momentum on the three legs of our Energy Transition business model: production maximization, decommissioning and renewables • Continued integration of Helix Alliance and full-field abandonment capabilities • Expect to continue anticipated momentum from second half 2022 into 20
Slide 30: Beyond 2022
BEYOND 2022 • Potential Improvements in 20231 We continue to expect 2023 to be substantially better than 2022, based on the following: • Brazil – Both vessels expected to be working in intervention mode at profitable rates in 2023; expected EBITDA improvement $55 to $65 million in 2023 • Q7000 – ves
Slide 31: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Environmental • Our business supports the responsible transition from a carbon based economy through a three pronged strategy of maximizing remaining oil and gas reserves, abandonment and decommissioning end of life wells and applying the techniques and technolog
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations 32
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ in thousands, unaudited) Three Months Ended Nine Months Ended Year Ended 9/30/22 9/30/21 6/30/22 9/30/22 9/30/21 12/31/21 Adjusted EBITDA: Net loss $ (18,763) $ (19,043) $ (29,699) $ (90,493) $ (35,776) $ (61,684) Adjustments: Income tax provision (benefit) 6,500 (1,058)
Slide 34: Non-GAAP and Other Definitions
NON-GAAP AND OTHER 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 or losses on equity investments, net other income or expense, and depreciation and amortization expense. Non-
Slide 35: Thank you
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