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Jun 30, 2023
Oceaneering Q2 2023 Earnings Report
Oceaneering's financial performance improved significantly, driven by strong offshore market dynamics and increased activity in energy-focused businesses.
Key Takeaways
Oceaneering reported net income of $19.0 million on revenue of $598 million for Q2 2023. The company's energy-focused businesses demonstrated improvements from accelerating deepwater fundamentals, with an 18% increase in revenue and nearly a 100% increase in operating income compared to the first half of 2022. The company narrowed its adjusted EBITDA guidance by raising the lower bound of the previous range and adjusting the range higher for projected free cash flow.
Net income was $19.0 million and consolidated adjusted EBITDA was $74.8 million.
Consolidated operating income was $49.2 million.
Cash position decreased by $1.0 million, from $505 million to $504 million.
ROV fleet utilization averaged 70% with an average revenue per day on hire of $9,077.
Oceaneering
Oceaneering
Oceaneering Revenue by Segment
Revenue by Segment
Subsea Robotics Revenue
CapyFin.comManufactured Products Revenue
CapyFin.comOffshore Projects Group Revenue
CapyFin.comIMDS Revenue
CapyFin.comAerospace & Defense Tech Revenue
CapyFin.com Forward Guidance
Oceaneering expects a sequential increase in third quarter 2023 results, with Adjusted EBITDA in the range of $75 million to $85 million on a high-single digit percentage increase in revenue. For the full year of 2023, the company narrowed its adjusted EBITDA guidance to between $275 million and $310 million and free cash flow to between $90 million and $130 million.
Positive Outlook
- Increased revenue and operating results in SSR and OPG segments on continuing robust offshore activity.
- Manufactured Products operating income margin is projected to be in the mid-single digit range on a mid-teens percentage increase in revenue.
- Improved operating income and operating income margin for ADTech on a modest improvement in revenue.
- OPG is expected to have slightly higher revenue, significantly higher operating income results and improved operating income margin to the low- to mid-teens percentage range, driven by more efficient vessel utilization and increased international activity.
- ADTech is expected to have higher operating income results on increased revenue with an annual operating income margin in the low-teens percentage range.
Challenges Ahead
- IMDS revenue is forecast to be relatively flat with operating income margin remaining in the mid-single digit range.
- Unallocated Expenses are forecast to be in the mid-$40 million range as the company anticipates higher accruals for performance-based incentive compensation.
- Manufactured Products expects lower operating income margin during the second half of the year as a result of changes in project mix.
- Cash tax payments for 2023 are expected to be in the range of $65 million to $70 million.
- Organic capital expenditures are expected to total between $90 million and $110 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income