Q1 2022 Civeo Corp Earnings Call
Greetings welcome to severe corporation's first quarter 'twenty 'twenty tail earnings call. At this time, all participants are in a listen only mode.
Question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to Reagan Nelson Senior director of corporate development and Investor Relations. Thank you you may begin.
Thank you and welcome to <unk> first quarter 2022 earnings conference call today, our call will be led by Bradley Dodson, <unk>, President and Chief Executive Officer, and Carolyn Stone, <unk>, Senior Vice President and Chief Financial Officer and Treasurer.
Before we begin we would like to caution listeners regarding forward looking statements.
To the extent that our remarks today contain anything other than historical information. Please note that we're relying on the safe Harbor protections afforded by federal law any such remarks should be read in the context of the many factors that affect our business, including risks and uncertainties disclosed in our forms 10-K, 10-Q and other SEC filings.
I'll now turn the call over to Bradley.
Thank you Reagan and thank you all for joining us today on our first quarter earnings call I'll start today with a few key takeaways for the first quarter and then give a brief summary of our first quarter 2022 four months.
After which Caroline will provide a financial overview and I'll conclude our prepared comments with an updated full year 2022 guidance and the regional assumptions underlying that guidance and then we will open up the call for questions.
The key takeaways from our call today are we had a strong first quarter with year over year revenue growth of 32% and adjusted EBITDA growth of 57%.
Primarily driven by increased occupancy in our Canadian lodges in Australian villages, coupled with increased Canadian mobile camp activity.
Yeah.
The strong first quarter performance, coupled with an improving customer demand.
Our upward revision to our full year guidance.
While our customers continue to be focused on capital discipline, and returning capital to shareholders, we're having more encouraging customer conversations, especially in Canada related to increased maintenance and turnaround spending for the remainder of the year.
Do these recent customer conversations and updated customer forecasts in terms of head count as well as our strong first quarter results. We are raising our full year 2022 revenue adjusted EBITDA guidance, which I will detail later in the call.
Yeah.
Earlier this month, we announced a stock purchase agreement between Lance Torgerson, one of our largest shareholders on a fully diluted basis and converse and capital.
Transaction encompassed all of Mr. Torgerson, Silvio <unk> common shares available for sale.
Under the agreement Mr. Torgerson sold approximately 958000 common shares to conversant.
And now Silvio in converse and capital have the rights of first refusal on Mr. <unk> common shares.
That are expected to be released from escrow in June of 2022.
Absent early conversion of Mr. <unk> preferred shares into common Mr. Ferguson will not have any unrestricted silvio common shares to sell into the open market until at least April 2023.
While deleveraging our balance sheet remains our top capital allocation priority. Our secondary focus continues to be returning capital to shareholders through our share repurchase program.
Yeah.
As Youll see in our first quarter Q, we only referred reversed a handful of shares in the first quarter. This was largely due to the time and focus required by our team to facilitate the execution of the stock purchase agreement with Mr. Torgerson and conversant that we just discussed.
We expect to continue to Opportunistically repurchase shares under the program through the balance of the year.
In total we are pleased with our first quarter results compared to our expectations and we are seeing some encouraging signs related to room demand and customer spending as we look out to the balance of 2022.
Let me take a moment to provide a business update across our three segments.
In Canada, our revenues and adjusted EBITDA were above our expectations and increased year over year.
Driven by a significant recovery in large build rooms and increased Canadian mobile camp activity.
We did experience a sequential decrease in adjusted EBITDA, primarily due to increased operational costs related to colder than expected winter weather and a lower start to the year in terms of occupancy and the central oil Sands area.
In Australia, our revenues and adjusted EBITDA were also above our expectations, increasing both sequentially and year over year.
This was driven by increased year over year occupancy and average daily rate at our Bowen basin villages due to recovering demand and sequentially higher average daily rates on modest increase in billed rooms.
Turning briefly to the U S U S benefited from increased drilling and completion activity.
Which resulted in year over year increase in revenues and adjusted EBITDA.
Our offshore and <unk> businesses were the primary contributors to the increase due to higher rig count and higher customer activity.
With that I'll turn it over to Carolyn.
Thanks, Bradley and thank you all for joining us this morning.
Today, we reported total revenues in the first quarter of $165 $7 million with GAAP net income of <unk> $9 million or six cents per diluted share.
During the first quarter, we generated adjusted EBITDA of $25 $6 million operating cash flow of $2 million and free cash flow of $700000.
The increased adjusted EBITDA, we experienced in the first quarter of 2022 as compared to the same period in 2021 was largely due to increased build rooms in our Canadian lodges and increased Canadian level camp activity, coupled with increased Australian village doldrums.
The year over year decrease in operating cash flow and free cash flow was primarily due to an increase in working capital in the first quarter of 2022 as a result of timing of payments and receipts that is expected to unwind in the second and third quarters of this year.
Let's now turn to the first quarter results for our three segments I'll begin with a review of the Canadian segment performance compared to its performance a year ago in the first quarter of 2021.
Revenues from our Canadian segment were $96 million as compared to revenues of $61 $9 million in the first quarter of 2021.
Adjusted EBITDA in Canada was $17 $2 million, an increase from $10 $8 million in the first quarter of last year.
The increase in both revenues and adjusted EBITDA was largely driven by a 32% year over year increase in billed rents related to the recovery in oil prices and the reduced effects of the COVID-19 pandemic, coupled with increased level camp activity.
During the first quarter billed rooms in our Canadian lodges totaled 636000, which was up 32% year over year from 480000 in the first quarter of 2021 due to the factors we just discussed.
Our daily room rate for the Canadian segment in U S dollars was $106, a 9% year over year increase primarily a result of increased occupancy at our Sitka Lodge.
Turning to Australia during the first quarter, we recorded revenues of $63 $5 million up from $59 $6 million in the first quarter of 2021.
Adjusted EBITDA was $15 $4 million up from $12 $8 million during the same period of last year.
These results, which represent a 14% period over period topline increase.
On a constant currency basis were driven by both increased build runs as well as increased daily run rates at our villages.
The adjusted EBITDA increase was partially offset by increased labor costs, which were largely the largely the result of COVID-19 related travel and border restrictions.
Our U S. Dollar results were also negatively impacted by a weakened Australian dollar relative to the U S dollar.
Australian billed rooms in the quarter with 474000 up 12% from 425000 in the first quarter of 2021.
Due again to the recovery of customer maintenance activity in our villages, resulting from a more muted impact at the China, Australia tried to speed.
The average daily rate for Australian village in U S dollars was $79 in the first quarter consistent with the first quarter of 2021.
However, on a constant currency basis, our Australian village day rate increased approximately 6%, primarily driven by increases in and contracted room nights, which are billed at a higher rate.
Moving to the U S revenues for the first quarter was $6 2 million as compared to $3 9 million in the first quarter of 2021.
<unk> segment adjusted EBITDA was breakeven in the first quarter, an improvement from negative adjusted EBITDA of $1 2 million during the same period last year.
These year over year increases were primarily driven by increased activity in the well site and offshore businesses.
On a consolidated basis capital expenditures for the first quarter of 2022 were $3 6 million, which was relatively consistent with the $3 4 million invested during the same period last year.
Capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages.
Our total debt outstanding on March 31, 2022 was $177 9 million.
Which represents a $2 8 million increase since December 31st 2021 the.
The increase was the result of an unfavorable foreign currency translation of $3 1 million.
Our net leverage ratio for the quarter decreased to one four times as of March 31st 2022 from 149 times as of December 31, 2021.
Yes.
As of March 31, we had total liquidity of approximately $83 $1 million consisting.
Consisting of $76 7 million available under our revolving credit facilities and $6 4 million of cash on hand.
Bradley will now discuss our updated guidance for the full year 2020 to Bradley.
Thank you Carolyn and I'd like to discuss our updated full year 2022 guidance on a consolidated basis, including the underlying outlook for each of the regions as well as the underlying assumptions related to our guidance.
Based on our first quarter results and our improving outlook for the remainder of the year, we are raising our full year 2022 revenue and EBITDA guidance to six.
$660 million.
$135 million of revenues and 95 million to $102 million of adjusted EBITDA, We are maintaining our full year 2022 capital expenditure expenditure guidance of 20% to $25 million.
Based on the increased EBITDA and the consistent Capex guidance that I, just outlined expected interest expense of $10 million for the full year 2020 to minimal cash taxes. This year.
And raising we are raising our expected 2022 free cash flow forecast to a range of 60 million to $72 million from the previous free cash flow guidance of $55 million to $65 million.
This free cash flow guidance range assumes the first quarter working capital increased on lines again.
In the second and third quarter of this year.
The increase to our revenue and EBITDA guidance is primarily driven by recent customer conversations and contract negotiations related to increased maintenance activity across our Canadian lodges in Australian villages.
While our customers are still prioritizing capital discipline and return of capital to shareholders. We are also increasing their maintenance plans for the year due to sustained commodity prices at very healthy levels.
The single largest uncertainty in our 2022 guidance continues to be.
The timing and duration of our Canadian mobile camp activity related to pipeline projects in British Columbia.
Regarding this matter as we outlined last quarter, we have not changed our assumption related to the demobilization of three Canadian mobile camps, which are set for the fourth quarter of 2022.
Should any of these projects extend into 2023.
We could see 2022, adjusted EBITDA improve anywhere from 3 million to $10 million should all three move into 2023.
I will now provide the regional outlooks in corresponding underlying assumptions by region.
In Canada as we look at the remainder of 2022, we are encouraged by the recent customer conversations surrounding increased demand for maintenance and turnaround related rooms for the summer and early fall.
We are experiencing an increase in Canadian oil Sands lodge billed rooms from 2021 levels.
We expect one in the second and third quarter of this year.
There is a risk that customer labor availability in the region could dampen our customers' ability to execute these turnarounds and.
And we have made a portion of that risk into our guidance.
As we mentioned earlier were still expecting the majority of our Canadian mobile camp activity wind down by the end of the year and we've included the related demobilization costs in our guidance for the full year.
Turning to Australia, we are seeing encouraging signs of improvement in customer demand, albeit not at the same levels.
Indian business.
Customers remain more focused on capital discipline due to the volatility in met coal prices linear of weather and the lingering China, Australia trade dispute.
Iron ore prices remain a constructed levels and customer activity in Western Australia remains strong.
But the Covid related travel and border restrictions continue to result in increased labor costs in WMA.
We're starting to see gradual progress as it pertains to COVID-19 related labor issues.
That we experienced last year coming into this year, but it is a slow process and we expect labor shortages and higher labor costs remain a factor for the remainder of 2022.
For our U S business oil and gas price environment has improved significantly over recent months, we're starting to benefit from the increased drilling and completion activity in the U S. We expect our well site and offshore businesses to continue to improve throughout this year.
I will conclude by underscoring the key elements of our strategy as we navigate this extraordinary market climate.
Mandates are as follows we will prioritize the safety and wellbeing of our guests employees and communities, we will maintain our cost structure in accordance with the occupancy outlook across each of the three regions.
We will continue to focus on enhancing our best in class.
Hospitality services.
Yes.
We will allocate capital prudently to maximize cash flow generation, while we continue to reduce debt and return capital to shareholders through the share repurchase program.
And lastly, we will seek opportunities to further our revenue diversification and free cash flow generation through organic and M&A opportunities with that we're happy to take your questions.
Thank you if you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Our first question is from Steven Janeiro with Stifel. Please proceed.
Thanks, Good morning, everybody.
Good morning, good morning.
I guess a few a few things if you don't mind.
<unk>.
When you're talking about.
Australia business one of the things that struck me is that I heard this wrong, but I think some of the increased occupancy that youre seeing I think it was related to some maintenance versus kind of <unk>.
<unk> growth.
Did I hear that right and B. It does sound like you are seeing some growth I'm just kind of curious what the what the conversations have been and how you think Australia evolves as the year progresses from an occupancy perspective.
Sure It is.
Is primarily today the increase in a normal operating and maintenance activity in Australia that we are seeing the increase in occupancy.
There are some I would say early signs Steven to your question that there are some growth opportunities during either during the quarter or certainly year to date. There was the announcement that Pembroke is moving forward with the Olive Downs project, which is one of the first.
Expansionary projects, we've seen in the Bowen basin in quite some time.
Our assets are well positioned to serve that project and we're cautiously optimistic.
We will serve them as they ramp up their head count to go into construction mode.
But I would still say as we sit here today will all of the macro signs point to.
Increasing activity increased spending.
Most of our customers are focused on production maximization.
And not necessarily.
Terribly focused on increased spending so.
Most of it is focused on operations. So it's a nice backdrop, but not the kind of tailwind that you might expect given where commodity prices are.
Okay, great. Thanks.
Yeah.
I think Carol you mentioned sort of the mix and the impact it had on.
On the on the ADR in the quarter is.
Is that mix normalized going forward I think it was more sort of non contracted rooms that pushed the average rate up how should we think about me in both regions have the ADR evolves.
Sure, that's certainly true and in Australia kind of on the backdrop of your previous question. Most of the customers are are well.
The overwhelming majority of the customers are above their minimums.
And while they have been running above their minimums, they havent committed to increasing those minimums to capture.
The lower contracted rates.
And so as a result, we are benefiting from.
Uh huh.
From the the over performance.
Typically.
Contracted block of rooms in Australia will run between.
95% to $105 a night.
On the excess rooms above that commitment does can be as high as.
125 to $1 35.
Yes.
In Canada, there's not quite the same contract dynamic it is more of a mix issue specifically as you'll recall, if we're comparing year over year.
There was a British Columbia helpful were put in place late in 2000, 22020 that impacted first quarter of 2021.
So we were running a 100 that limited head count at industrial projects in British Columbia, not specifically targeting the LNG project, but it certainly did impact the LNG project.
If we were running 100 guests that sector first quarter of last year compared to 500 to 650.
The range for this year and as you know the rates at cigar.
Our higher than what we typically get in the Oilsands region that being said I would say from an overall pricing.
Comment.
There is upward theres more of an upward bias on pricing both in Canada, Australia generally speaking.
Which is not purely inflationary.
In nature.
Okay, great. Thanks.
There's two more for me if you don't mind the first on the.
Your LNG is obviously.
Obviously Ben.
A big topic.
LNG analysts talking about the Golden age of LNG here and more of the.
Just curious if you had any thoughts or updates on what youre hearing or seeing in western Canada and expansions there.
Sure.
The biggest LNG expansion that would impact us.
And in the medium term would be the LNG, Canada project that we're currently survey that is currently constructing trains one and two out in kitimat would be if they.
Went to a positive FID on train three and four.
There's no real update other than I think everyone's cautiously optimistic that that will occur the timing of which I don't have an update on our there isn't on an update on in terms of when that might occur. Thank everyone thinks given.
Given the macro backdrop as well as the economics of kind.
Kind of smoothly transitioning from phase.
Phase one of trains one and two to phase two of trains three and four.
Kind of back to back.
Some economic benefit to our customer.
And we remain positive that debt.
We're cautiously optimistic that it will occur theres not an update on that now there is there are a hit.
A couple of additional LNG projects in Western Canada.
That that appear to be getting legs, but it's too early to see to really tell how that will play out.
Great. Thanks, and then just one final one when you think about.
The balance sheet.
The uses of uses of free cash flow any updates there and I'm not sure. If you could tie this in but as the U S land market strengthened dramatically could there could you do something opportunistically around that.
Well.
Capital allocation policies has been so we announced the share repurchase program in.
In September August September of last year, we made a little bit of progress at the end of the year when we ran into first quarter blackout.
Most of our open window as it relates to share repurchase we spent working on on the <unk> transaction and as we have been and we really didn't get as much done as we would have liked as we were tied up with you on that.
As we look forward, it's a key component of what we want to accomplish so.
I think the the allocation prioritization remains the same.
We pay some debt.
Returning capital to shareholders.
And we're moving in and although we may not be there quite yet moving into a phase where we need to look at ways to get back to growing the revenue in the company as a whole and that will require some capital.
But certainly remain focused on the on the first two.
So that's where we stand right now.
Okay, great. Thanks for the color.
Thank you Steven.
As a reminder, star one on your telephone keypad, if he would like to ask a question. Our next question is from Steve <unk> with Sidoti. Please proceed.
Good morning, everyone I just wanted to follow up that last question on the share repurchase. So the current program expires August right, if there's something to.
Timing correctly with the excellent.
The assumption being that you will renew a plan similar terms.
Yes.
We certainly would have to discuss that with our board those conversations have not occurred but in terms of our prioritization of capital will remain in.
As a second priority. So I think that's a safe assumption that if we complete this program we would renew it again.
Okay great.
In terms of your commentary around the eventual demobilization.
I know you didn't change your guidance today, you talked about what the upside could be.
Are you getting a sense now that at least one of those projects extends into 'twenty three what are your thoughts around those.
Yes, the guidance assumes that they don't and that's the best information we have to date.
And so as that changed we tried to frame what it would what it would be if one or all.
To shift into 2023, but as of right now all of the conversations with customers indicate that they will move into the fourth quarter.
Okay.
Is there a cadence to that are you running at this rate rates through the fourth quarter or would you expect a wind down how would we think about that.
Yes.
In terms of the mobile camp activity.
Yes.
Yes, we've been running pretty consistently since the <unk>.
Third quarter of last year.
In terms of both the revenue coming out of contract camps.
And then.
The gross profit coming out of that work.
It should run relatively consistently through the end of the third quarter, that's baked into guidance and then we'll start to see it ramp down in the fourth quarter of this year.
Okay.
And then on you raised your free cash flow.
So guidance.
Trying to think about and saw the cash flow this quarter and your comments about unwinding of working capital, but is it reasonable to think as we start seeing higher utilization levels and higher revenue that you're going to carry higher working capital and then also in terms of is there any more capex, you're going to have to put back into some of these.
Lodges as they start as utilization starts picking up.
Great questions.
The.
In terms of the final question in terms of well on working capital we do.
Point is valid.
We'll with higher revenues, we would expect higher working capital. This was merely a timing issue in the first quarter.
We've hedged our bet that it will unwind in the middle part of the year Q2 and Q3 it.
It should unwind in the second quarter, but again it could be a timing issue, we know that it will unwind by the middle part of the year.
In terms of Capex, we built in some of that.
For for what the guidance is right now we built in some of that.
Kind of reactivation, if you will of the rooms into the 20% to $25 million.
There are certain scenarios, where if we get customer commitments.
Right, we would it would.
Solidify the outlook.
The longer term outlook for our occupancy.
It may require higher capex to support that.
But we would only.
Commit to those capex increases and increase our capex guidance.
Should we get the customer commitments to support it.
Okay. Thanks.
Thanks, Brad I appreciate the answers.
Yeah, Thanks, Steve I appreciate it very thoughtful.
We have reached the end.
A question and answer session I would like to turn the conference back over to Bradley for closing comments.
Thank you I appreciate it.
Thank you everyone for joining the call today. We appreciate your interest in <unk>, we look forward to speaking with you on our second quarter earnings call in a few months and that concludes our call for today.
Thank you. This concludes the conference you may disconnect your lines at this time and thank you for your participation.
Okay.
[music].
Yes.
Thanks.
[music].
Yes.
[music].
Yes.
[music].
Hum.
Hmm.
Yeah.
[music].
Okay.
[music].
[music].
Greetings welcome to Silvio Corporation's first quarter 2022 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to Reagan Nelson Senior director of corporate development and Investor Relations. Thank you you may begin.
Thank you and welcome to <unk> first quarter 2022 earnings conference call today, our call will be led by Bradley Dodson, <unk>, President and Chief Executive Officer, and Carolyn Stone, <unk>, Senior Vice President and Chief Financial Officer and Treasurer.
Before we begin we would like to caution listeners regarding forward looking statements.
To the extent that our remarks today contain anything other than historical information. Please.
Please note that we're relying on the safe harbor protections afforded by federal law any such remarks should be read in the context of the many factors that affect our business, including risks and uncertainties disclosed in our forms 10-K, 10-Q, and other SEC filings I will now turn the call over to Bradley.
Thank you Reagan and thank you all for joining us today on our first quarter earnings call.
I'll start today with a few key takeaways for the first quarter and then give a brief summary of our first quarter 2022 performance.
After which Caroline who will provide a financial overview and I'll conclude our prepared comments with an updated full year 2022 guidance.
And the regional assumptions underlying that guidance and then we will open up the call for questions.
The key takeaways from our call today are we had a strong first quarter with year over year revenue growth of 32% and adjusted EBITDA growth of 57%, primarily driven by increased occupancy in our Canadian lodges in Australian villages, coupled with increased Canadian mobile camp activity.
The strong first quarter performance, coupled with an improving customer demand.
Drove our upward revision to our full year guidance.
While our customers continue to be focused on capital discipline, and returning capital to shareholders, we're having more encouraging customer conversations, especially in Canada related to increased maintenance and turnaround spending for the remainder of the year.
Do these recent customer conversations and updated customer forecasts in terms of head count as well as our strong first quarter results. We are raising our full year 2022 revenue adjusted EBITDA guidance, which I will detail later in the call.
Earlier this month, we announced a stock purchase agreement between Lance Torgerson, one of our largest shareholders on a fully diluted basis and converse and capital.
The transaction encompassed all of Mr. Torgerson, <unk> common shares available for sale.
Under the agreement Mr. Torgerson sold approximately 958000 <unk> common shares to conversant.
And now Silvio in converse and capital have the rights of first refusal on Mr. <unk> common shares.
That are expected to be released from escrow in June of 2022.
Absent early conversion of Mr. <unk> preferred shares into common Mr. Ferguson will not have any unrestricted silvio common shares to sell into the open market until at least April 2023.
While deleveraging our balance sheet remains our top capital allocation priority. Our secondary focus continues to be returning capital to shareholders through our share repurchase program.
As you will see in our first quarter Q, we only repurchased reversed a handful of shares in the first quarter. This was largely due to the time and focus required by our team to facilitate the execution of the stock purchase agreement with Mr. Progress in conversant that we just discussed.
We expect to continue to Opportunistically repurchase shares under the program through the balance of the year.
In total we are pleased with our first quarter results compared to our expectations and we are seeing some encouraging signs related to room demand and customer spending as we look out to the balance of 2022.
Let me take a moment to provide a business update across our three segments.
In Canada, our revenues and adjusted EBITDA were above our expectations and increased year over year.
Driven by a significant recovery in large build rooms and increased Canadian mobile camp activity.
We did experience a sequential decrease in adjusted EBITDA, primarily due to increased operational costs related to colder than expected winter weather and a lower start to the year in terms of occupancy and the central oil Sands area.
In Australia, our revenues and adjusted EBITDA were also above our expectations, increasing both sequentially and year over year.
This was driven by increased year over year occupancy and average daily rates that our Bowen basin villages due to recovering demand and sequentially higher average daily rates on modest increase in billed rooms.
Turning briefly to the U S U S benefited from increased drilling and completion activity.
Which resulted in year over year increase in revenues and adjusted EBITDA.
Our offshore and well site businesses were the primary contributors to the increase due to higher rig count and higher customer activity.
With that I'll turn it over to Carolyn.
Thanks, Bradley and thank you all for joining us this morning.
Today, we reported total revenues in the first quarter of $165 7 million with GAAP net income at <unk> 9 million or six cents per diluted share.
During the first quarter, we generated adjusted EBITDA of $25 6 million operating cash flow of $2 million and free cash flow of $700000.
The increased adjusted EBITDA, we experienced in the first quarter of 2022 as compared to the same period in 2021 was largely due to increased build rooms in our Canadian lodges and increased Canadian level camp activity, coupled with increased Australian village Dell drones.
The year over year decrease in operating cash flow and free cash flow was primarily due to an increase in working capital in the first quarter of 2022 as a result of timing of payments and receipts that is expected to unwind in the second and third quarters of this year.
Let's now turn to the first quarter results for our three segments I'll begin with a review of the Canadian segment performance compared to its performance a year ago in the first quarter of 2021.
Revenues from our Canadian segment were $96 million.
As compared to revenues of $61 9 million in the first quarter of 2021.
Adjusted EBITDA in Canada was $17 2 million, an increase from $10 $8 million in the first quarter of last year.
The increase in both revenues and adjusted EBITDA was largely driven by a 32% year over year increase in billed rent related to the recovery in oil prices and the reduced effects of the COVID-19 pandemic, coupled with increased level camp activity.
During the first quarter billed rooms in our Canadian lodges totaled 636000, which was up 32% year over year from 480000 in the first quarter of 2021 due to the factors we just discussed.
Our daily room rate for the Canadian segment in U S dollars was $106 and 9% year over year increase primarily a result of increased occupancy at our Sitka Lodge.
Turning to Australia during the first quarter, we recorded revenues of $63 5 million up from $59 $6 million in the first quarter of 2021.
Adjusted EBITDA was $15 $4 million up from $12 8 million during the same period of last year.
These results, which represent a 14% period over period topline increase.
On a constant currency basis were driven by both increased build runs as well as increased daily run rates at our relative.
The adjusted EBITDA increase was partially offset by increased labor costs, which were larger that largely the result of COVID-19 related travel and border restrictions.
Our U S. Dollar results were also negatively impacted by a weakened Australian dollar relative to the U S dollar.
Australian billed rooms in the quarter was 474000 up 12% from 425000 in the first quarter of 2021 <unk>.
<unk> again to the recovery of customer maintenance activity in our villages, resulting from a more muted impact at the China, Australia tried to speed.
The average daily rate for Australian village in U S dollars was $79 in the first quarter consistent with the first quarter of 2021.
However, on a constant currency basis, our Australian village day rate increase.
<unk> increased approximately 6% primarily driven by increases in and contracted room nights, which are billed at a higher rate.
Moving to the U S revenues for the first quarter was $6 2 million as compared to $3 9 million in the first quarter of 2021.
The U S segment adjusted EBITDA was breakeven in the first quarter, an improvement from negative adjusted EBITDA of $1 2 million during the same period last year.
These year over year increases were primarily driven by increased activity in the well site and offshore businesses.
On a consolidated basis capital expenditures for the first quarter of 2022 were $3 6 million, which was relatively consistent with the $3 4 million invested during the same period last year.
Capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages.
Our total debt outstanding on March 31, 2022 was $177 9 million.
Which represents a $2 8 million increase since December 31 2021 the.
The increase was the result of an unfavorable foreign currency translation of $3 1 million.
Our net leverage ratio for the quarter decreased to one four times as of March 31, 2022 from 149 times as of December 31 2021.
Yes.
As of March 31, we had total liquidity of approximately $83 1 million.
Consisting of $76 7 million available under our revolving credit facilities and $6 4 million of cash on hand.
Bradley will now discuss our updated guidance for the full year 2020 to Bradley.
Thank you Carolyn and I'd like to discuss our updated full year 2022 guidance on a consolidated basis.
Including the underlying outlook for each of the regions as well as the underlying assumptions related to our guidance.
Based on our first quarter results and our improving outlook for the remainder of the year, we are raising our full year 2022 revenue and EBITDA guidance too.
$660 million $675 million of revenues and 95 million to $102 million of adjusted EBITDA.
We are maintaining our full year 2022 capital expenditure expenditure guidance of 20% to $25 million.
Based on the increased EBITDA and the consistent Capex guidance that I've, just outlined expected interest expense of $10 million for the full year 2020 to minimal cash taxes. This year.
And raising we are raising our expected 2022 free cash flow forecast to a range of 60 million to $72 million from the previous free cash flow guidance of $55 million to $65 million.
This free cash flow guidance range assumes the first quarter working capital increase on lines again.
In the second and third quarter of this year.
The increase to our revenue and EBITDA guidance is primarily driven by recent customer conversations and contract negotiations related to increased maintenance activity across our Canadian lodges in Australian villages.
While our customers are still prioritizing capital discipline and return of capital to shareholders.
They're increasing their maintenance plans for the year due to sustained commodity prices at very healthy levels.
The single largest uncertainty in our 2022 guidance continues to be the.
Timing and duration of our Canadian mobile camp activity related to pipeline projects in British Columbia.
Regarding this matter as we outlined last quarter, we have not changed our assumption related to the demobilization of three Canadian mobile camps, which are set for the fourth quarter of 2022.
Should any of these projects extend into 2023.
We could see 2022, adjusted EBITDA improve anywhere from 3 million to $10 million should all of three move into 2023.
I will now provide the regional outlooks in corresponding underlying assumptions by region.
In Canada as we look at the remainder of 2022, we are encouraged by the recent customer conversations surrounding increased demand for maintenance and turnaround related rooms for the summer and early fall.
We are experiencing an increase in Canadian oil Sands lodge billed rooms from 2021 levels.
We expect one in the second and third quarter of this year.
There is a risk that customer labor availability in the region could dampen our customers' ability to execute these turnarounds and.
And we have made a portion of that risk into our guidance.
As we mentioned earlier were still expecting the majority of our Canadian mobile camp activity wind down by the end of the year and we've included the related demobilization costs in our guidance for the full year.
Turning to Australia, we are seeing encouraging signs of improvement in customer demand, albeit not at the same levels.
Indian businesses.
I think customers remain more focused on capital discipline through the volatility in coal prices linear of weather and the lingering China, Australia trade dispute.
Iron ore prices remain a constructive levels and customer activity in Western Australia remains strong.
But the Covid related travel and border restrictions continue to result in increased labor costs in WMA.
We are starting to see gradual progress as it pertains to COVID-19 related labor issues.
That we experienced last year coming into this year, but it is a slow process and we expect labor shortages and higher labor costs remain a factor for the remainder of 2022.
For our U S business oil and gas price environment has improved significantly over recent months, we're starting to benefit from the increased drilling and completion activity in the U S. We expect our well site and offshore businesses to continue to improve throughout this year.
I will conclude by underscoring the key elements of our strategy as we navigate this extraordinary market climate.
Mandates are as follows we.
We will prioritize the safety and wellbeing of our guests employees and communities, we will maintain our cost structure in accordance with the occupancy outlook across each of the three regions.
We will continue to focus on enhancing our best in class hospitality services.
We will allocate capital prudently to maximize cash flow generation, while we continue to reduce debt and return capital to shareholders through the share repurchase program.
And lastly, we will seek opportunities to further our revenue diversification and free cash flow generation through organic and M&A opportunities with that we're happy to take your questions.
Thank you if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset.
Pressing the star keys.
Our first question is from Steven Janeiro with Stifel. Please proceed.
Thanks, Good morning, everybody.
Good morning, good morning.
I guess a few a few things if you don't mind the first.
When you're talking about.
Australia business one of the things that struck me is that I heard this wrong, but I think some of the increased occupancy that youre seeing I think it was related to some maintenance versus kind of grew.
<unk> growth.
Did I hear that right and B. It does sound like you are seeing some growth I'm just kind of curious what the what the conversations have been and how you think Australia evolves as the year progresses from an occupancy perspective.
Sure.
It is primarily today the increase in a normal operating and maintenance activity in Australia that we are seeing the increase in occupancy.
There are some I would say early signs.
And to your question that there are some growth opportunities during either during the quarter or certainly year to date. There was the announcement that Pembroke is moving forward with the Olive Downs project, which is one of the first <unk>.
Spansion Harry projects, we've seen in the Bowen basin in quite some time.
Our assets are well positioned to serve that project.
We're cautiously optimistic that.
We will serve them as they ramp up their head count to go into construction mode.
But I would still say as we sit here today will all of the macro signs point to.
Increasing activity increased spending.
Most of our customers are focused on production maximization.
And not necessarily.
Terribly focused on increased spending so.
Most of its focused on operations. So it's a nice backdrop, but not the kind of tailwind that you might expect given where commodity prices are.
Okay, great. Thanks.
Yes.
I think Carol you mentioned sort of the mix and the impact it had on.
On the on the ADR in the quarter is.
Is that mix normalized going forward I think it was more sort of non contracted rooms that pushed the average rate up how should we think about me in both regions have the ADR evolves.
Sure Thats, certainly true and in Australia kind of on the backdrop of your previous question most of the customers there are well.
The overwhelming majority of the customers are above their minimums.
And while they have been running above their minimums, they havent committed to increasing those minimums to capture the lower contracted rates.
And so as a result, we are benefiting from.
From the the over performance.
Typically.
Contracted block of rooms in Australia will run between.
95% to 105 a night.
On the excess rooms above that commitment does can be as high as 125 to $1 35.
In Canada, there's not quite the same contract dynamic it is more of a mix issue specifically as youll recall, if we're comparing year over year.
There was a British Columbia helpful or put in place late in 2000, 22020 that impacted first quarter of 2021.
So we were running a $100 that limited head count at industrial projects in British Columbia.
Not specifically targeting the LNG project, but it certainly did impact of the LNG project.
And.
If we were running 100 guests and suggest first quarter of last year compared to 500 to 650.
The range for this year and as you know the rates at CCAR.
Our higher than what we typically get in the Oilsands region that being said I would say from an overall pricing.
Comment.
There is upward theres more of an upward bias on pricing both in Canada, Australia generally speaking.
Which is not purely inflationary.
And matrix.
Okay, great. Thanks.
There are two more for me if you don't mind the first on the.
Youre LNG is obviously.
Obviously Ben.
A big topic.
LNG all talking about the Golden age of LNG herein and more of the.
I was curious if you had any thoughts or updates on what youre hearing or seeing in western Canada and expansion there.
Sure.
The biggest LNG expansion that would impact us.
And in the medium term would be the LNG, Canada project that we're currently serving that is currently constructing trains one and two out in kitimat.
B J.
Went to a positive.
On train three and four.
There is no real update other than I think everyone's cautiously optimistic that that will occur the timing of which I don't have an update on our there is not an update on in terms of when that might occur. Thank everyone thinks given the fact that the macro backdrop as well as the economics of.
Kind of smoothly transitioning from phase.
Phase one of trains one and two to phase two of trains three and four.
Back to back would provide some economic benefit to our customer.
And we remain positive that debt.
We're cautiously optimistic that it will occur theres not an update on that now there is there are a hit.
A couple of additional LNG projects in Western Canada.
That debt.
Are we getting legs, but it's too early to see to really tell how that will play out.
Great. Thanks, and then just one final one when you think about.
The balance sheet.
The uses of uses of free cash flow any updates there and I'm not sure. If you could tie this in but as the U S land market strengthens dramatically, yes could there could you do something opportunistically around that.
Well.
Capital allocation policies has been so we announced the share repurchase program.
In September August September of last year, we made a little bit of progress at the end of the year when we ran into first quarter blackout.
Most of our open window as it relates to share repurchase we spent working on on the <unk>.
<unk> diverse and transaction.
And as we have been and we really didn't get as much done as we would have liked as we were tired of working on that.
As we look forward its key.
<unk> of what we want to accomplish.
<unk>.
They see the allocation prioritization remains the same.
Repay some debt.
Returning capital to shareholders.
And were moving in and although we may not be there quite yet moving into a phase where we need to look at ways to get back to growing the revenue in the company as a whole.
And that will require some capital.
But certainly remain focused on the first two.
So that's where we stand right now.
Okay, great. Thanks for the color.
Thank you Steven.
As a reminder, star one on your telephone keypad, if you would like to ask a question. Our next question is from Steve <unk> with Sidoti. Please proceed.
Good morning, everyone.
Wanted to follow up that last question on the share repurchase so the current program expires August right.
Two on the timing.
Timing correctly with the exports.
The assumption being that you will renew a plan similar terms.
Yes.
We certainly would have to discuss that with our board those conversations have not occurred.
In terms of our prioritization of capital will remain.
As a second priority. So I think it's a safe assumption that if we complete this program we would renew it again.
Okay, great in terms of your commentary around the <unk>.
The eventual demobilization.
I know you didn't change your guidance today, you talked about what the upside could be.
Are you getting a sense now that at least one of those projects extends into 'twenty three what are your thoughts around those.
Okay.
<unk> assumes that they don't and Thats the best information we have to date.
And so as that change we tried to frame what it would what it would be if one or all.
To shift into 2023, but as of right now all of the conversations with customers indicate that they will move in the fourth quarter.
Okay.
Is there a cadence to that are you running at this rate rates through the fourth quarter or would you expect a wind down how would we think about that.
Yes.
In terms of the mobile camp activity, yes.
Yes.
Yes, we've been running pretty consistently since the <unk>.
Third quarter of last year.
In terms of the revenue coming out of contract camps.
And then.
The gross profit coming out of that work.
It should run relatively consistently through the end of the third quarter, that's baked into guidance and then we'll start to see a ramp down in the fourth quarter of this year.
Okay.
And then on you raised your free cash flow.
So the guidance.
Trying to think about and we saw the cash flow this quarter and your comments about unwinding of working capital, but is it reasonable to think as we start seeing higher utilization levels and higher revenue that you're going to carry higher working capital and then also in terms of is there any more capex youre going to have to put back into some of these.
Watches as they start as utilization starts picking up.
Great questions.
The.
In terms of the final question in terms of well on working capital we do.
Point is valid at will.
With higher revenues, we would expect higher working capital this was merely a timing issue in the first quarter.
We've hedged our bet that it will unwind in the middle part of the year Q2 and Q3.
It should unwind in the second quarter.
Again, it could be a timing issue, we know that it will unwind by the middle part of the year.
In terms of Capex, we built in some of that.
For what the guidance is right now we've built in some of that.
Kind of reactivation, if you will of the rooms into the 20% to $25 million there.
There are certain scenarios, where if we get customer commitments.
Great.
It would.
Solidify the outlook.
The longer term outlook for our occupancy.
It may require higher capex to support that.
But we would only.
Commit to those capex increases and increase our capex guidance.
Should we get the customer commitments to support it.
Okay. Okay. Thanks.
Thanks, Brad I appreciate the answers.
Yeah, Thanks, Steve I appreciate it very thoughtful.
We have reached the end of our question and answer session I would like to turn the conference back over to Bradley for closing comments.
Thank you I appreciate it.
Thank you everyone for joining the call today. We appreciate your interest in CVR, we look forward to speaking with you on the second quarter earnings call in a few months and that concludes our call for today.
Thank you. This concludes the conference you may disconnect your lines at this time and thank you for your participation.