Q4 2024 Bristow Group Inc Earnings Call
Yeah.
Operator: Good day everyone and welcome to Bristow Group Reports fourth quarter and full year 2024 earnings call. Today's call is being recorded. After the prepared remarks there will be a question and answer session.
Speaker Change: Good day, everyone and welcome to Bristow Group reports fourth quarter and full year 2024 earnings call. Today's call is being recorded after the prepared remarks, there will be a question and answer session. If you would like to ask a question during that time simply press.
Operator: If you would like to ask a question during that time simply press star followed by the number five on your telephone keypad.
Speaker Change: Star followed by the number five on your telephone keypad.
Red Tilchin: At this time I would like to turn the call over to Red Tilchin, Senior Manager of Investor Relations and Financial Reporting. Thank you all. Good morning, everyone, and welcome to Bristow Group's fourth quarter and full year 2024 earnings call. I am joined on a call today with our president and chief executive officer, Chris Bradshaw, and senior vice president and chief financial officer, Jennifer Whalen. Before we begin, I'd like to take this opportunity to remind everyone that during the course of this call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on slide three of our investor presentation.
Speaker Change: At this time I would like to turn the call over to Red till Chin senior manager of Investor Relations and financial reporting.
Speaker Change: Yeah.
Speaker Change: Thank you Angela.
Speaker Change: Everyone and welcome to the Bristow groups fourth quarter and full year 2024 earnings call.
Speaker Change: I am joined on the call today, with our President and Chief Executive Officer, Chris Bradshaw, and senior Vice President and Chief Financial Officer, Jennifer Whalen.
Speaker Change: Before we begin I'd like to take this opportunity to remind everyone that during the course of this call management may make forward looking statements that are subject to risks and uncertainties that are described in more detail on slide three of our investor presentation.
Red Tilchin: You may access our investor presentation on our website. We will also reference certain non-GAAP financial measures, such as EBITDA and free cash flow. A reconciliation of such measures to GAAP is included in the earnings release and our investor presentation.
Speaker Change: You may access our investor presentation on our website.
Speaker Change: We will also reference certain non-GAAP financial measures, such as EBITDA and free cash flow a reconciliation of such measures to GAAP is included in the earnings release and our Investor presentation.
Christopher Bradshaw: I'll now turn the call over to our President and CEO, Chris. Thank you, Red. I want to thank all the Bristow team members around the world for their continued focus on safety, which is Bristow's number one core value and our highest operational priority. In terms of workplace safety, the company delivered a 32% decrease in lost workdays in 2024 compared to the prior year. which represents a significant HSE performance improvement.
Chris: I'll now turn the call over to our President and CEO Chris.
Chris: Thank you Brad.
Chris: I want to thank all of the Bristow team members around the world for their continued focus on safety.
Chris: Which is Bristow is number one core value and our highest operational priority.
Chris: In terms of workplace safety.
Chris: Company delivered a 32% decrease in lost work days in 2024 compared to the prior year.
Chris: Which represents a significant HSE performance improvement.
Christopher Bradshaw: With respect to aviation safety, as a reminder, we experienced a tragic air accident during a search and rescue training exercise offshore Norway on February 28, 2024. with six crew members on board. While five crew members were rescued, we tragically experienced one fatality as a result of the accident. and we will carry this loss with us always. The investigation process is ongoing, and we will refer you to the preliminary reports published by the authorities in Norway. We continue to fully cooperate in the investigation process.
Chris: With respect to aviation safety.
Chris: As a reminder, we.
Chris: We experienced a tragic air accident during a search and rescue training exercise offshore Norway on February 28 2024.
Chris: With six crew members on board.
Chris: While five crew members were rescued we tragically experienced one fatality as a result of the accident.
Chris: And we will carry this loss with us always.
Chris: The investigation process is ongoing and we will refer you to the preliminary reports published by the authorities in Norway.
Chris: We continue to fully cooperate in the investigation process.
Christopher Bradshaw: We do not have any other material updates at this time.
Chris: We do not have any other material updates at this time.
Christopher Bradshaw: While always a difficult transition to make, I will now turn our comments to the company's operational and financial performance. We are pleased to report very strong fourth quarter financial results, which exceeded the upwardly revised outlook range for Q4 and full year 2024. This outperformance was driven by strong growth in our offshore energy services business, where industry fundamentals remain positive. And we continue to believe that we are in the midst of a multi-year upside. In our government services business, we are focused on the ongoing launch of SAR services for the Irish Coast Guard and the transition of operations to the UK SAR 2G contract in the UK.
Speaker Change: Well always a difficult transition to make I will now turn our comments to the companys operational and financial performance.
Speaker Change: We are pleased to report very strong fourth quarter financial results.
Speaker Change: Which exceeded the upwardly revised outlook range for Q4 and full year 2024.
Speaker Change: This outperformance was driven by strong growth in our offshore energy services business, where industry fundamentals remain positive and we continue to believe that we are in the midst of a multiyear up cycle.
Speaker Change: And our government services business, we are focused on the ongoing launch of SAR services for the Irish Coast Guard and the transition of operations to the U K SAR two G contract in the United Kingdom.
Christopher Bradshaw: Those are large and complex projects with extended transition timelines running through the second half of 2025 in Ireland and through the end of 2026 for UK SAR 2G. While we are facing challenges along the way with unexpected regulatory and supply chain challenge delays, our commitment to delivering successful outcomes for the government and communities we serve remains unwavering.
Speaker Change: Those are large and complex projects with extended transition time lines running through the second half of 2025, and Ireland and through the end of 2026 for UK SAR two chi.
Speaker Change: While we are facing challenges along the way with unexpected regulatory and supply chain challenge delays.
Speaker Change: Our commitment to delivering successful outcomes for the governments and communities we serve remains unwavering.
Jennifer Whalen: I will now hand it over to our CFO for a more detailed discussion of financial results and guidance. Jennifer. Thank you, Chris.
Speaker Change: I will now hand, it over to our CFO for a more detailed discussion of financial results and guidance Jennifer.
Jennifer: Thank you Chris.
Jennifer Whalen: Today, I will begin with a review of Bristow's sequential quarter financial results on a consolidated basis, before moving on to an introduction of our newly realigned business segment and review of the full year 2024 results on a segment basis. Adjusted EBITDA in the fourth quarter of 2024 was $57.8 million compared to $60.2 million in the third quarter. Revenues decreased $11.6 million, primarily due to lower aircraft availability and unfavorable foreign exchange rate impacts across all segments, partially offset by the commencement of a new government services contract in Ireland. Operating expenses were $9.6 million lower due to lower operating personnel costs as a result of the finalization of a labor agreement in the UK in the third quarter, lower fuel costs due to fewer flight hours and decreases in global fuel prices, and lower repairs and maintenance costs primarily due to decreased power by the hour or PBH expenses.
Jennifer: Today I will begin with a review of breakfast sequential quarter financial results on a consolidated basis before moving on from the introduction of.
Jennifer: Of our new really newly realigned business segments and review of the full year 2024, a result on a segment basis.
Jennifer: Adjusted EBITDA in the fourth quarter of 2024, with $57 8 million compared to $68 million in the third partner.
Jennifer: Revenues decreased $11 6 million, primarily due to lower aircraft availability and unfavorable foreign exchange rate impact across all segments.
Jennifer: Partially offset by the commencement of a new government contract in Ireland.
Jennifer: Operating expenses were $9 6 million lower due to lower operating and personnel cost as a result of the finalization of a labor agreement in the U K and the third partner.
Jennifer: Hi.
Jennifer: Five hours and decreases in bulk wholesale prices and lower repairs and maintenance costs, primarily due to decreased power by the hour PPA expenses.
Jennifer Whalen: These decreases were partially offset by higher costs related to the commencement of the new government services contract. General and administrative expenses were $1.5 million higher, primarily due to higher incentive compensation costs related to the company's full year financial results. Other expenses of $6.2 million resulted from foreign exchange losses of $12.6 million, which, as noted in previous earnings calls, primarily comprises non-cash foreign currency gains and losses that are excluded from our adjusted EBITDA calculations. These foreign exchange losses were partially offset by an insurance recovery of $4.5 million and a favorable interest adjustment to our company's pension liability of $1.7 million.
Jennifer: These decreases were partially offset by higher costs related to the commencement of the new government there okay.
Jennifer: General and administrative expenses were one 5 million higher primarily due to higher incentive compensation cost.
Jennifer: Related to the company's full year financial results.
Jennifer: Other expenses ethics 10 million resulted from foreign exchange losses of $12 6 million, which as noted in previous earnings call primarily comprised of noncash foreign currency gains and losses that are finished from our adjusted EBITDA calculation.
Jennifer: These foreign exchange losses were partially offset by an insurance recovery at $4 5 million and a favorable <unk> adjustment.
Two our company's pension liability of $1 79.
Jennifer Whalen: I will now move on to an explanation of our newly realigned business segments and a brief introduction to each operating segment. Due to the recent expansion of our government services business, via the addition of new contracts in multiple jurisdictions, we re-evaluated the various factors that make our existing lines of service such as End Customer Profile, Management Responsibility, and Contract Dynamics.
Jennifer: I will now move onto an explanation of our newly realigned business segments and a brief introduction to each operating segment.
Jennifer: Due to the recent expansion of our government services business via.
Jennifer: The addition of new contracts in multiple jurisdictions, we reevaluated the various factors that make our existing service lines of service unique.
Jennifer: And customer profile management responsibility and contract dynamic.
Jennifer Whalen: In the fourth quarter of 2024, we realigned our segments from a single reportable segment, Aviation Services, to three reportable segments. The first is Offshore Energy Services, or OES, which provides aviation services to, from, and between offshore energy installations globally. The second is Government Services, which provides Search and Rescue, or SAR, and support government, support helicopter services to government agencies globally. And lastly, Other Services, which primarily comprises fixed-wing services providing transportation through scheduled passenger flights and aircraft charter services, dry leasing of aircraft to third-party operators, and parts sales. The realignment of our segment resulted in certain presentation changes that include a reclassification of our fixing revenues supporting our energy business in Africa to our OES segment.
Jennifer: In the fourth quarter of 2024, we realigned our segments from a single reportable segment Aviation services.
Three reportable segments.
Jennifer: The first is offshore energy services our Oes.
Jennifer: Which provides aviation services to from and between offshore energy installations suddenly.
Jennifer: The second is government services, which provide search and rescue or SAR and support government support helicopter services the government agencies globally.
Jennifer: And lastly, other services, which primarily comprised comprises fixed wing services, providing transportation and through scheduled passenger flying and aircraft charter services.
Jennifer: Leasing of aircraft to third party operators and part of that.
Jennifer: The realignment of our segments resulted in certain presentation changes that include a reclassification of our fixed wing revenues supporting our energy business in Africa.
Matt: Hi, Matt.
Jennifer Whalen: combining our fixed-wing airline operations in Australia into the other services segment. and combining reimbursable and operating revenues as well as combining reimbursable and operating expense.
Combining our fixed wing airline operations in Australia and to the other services segment.
Matt: And combining reimbursable and operating revenues as well as combining reimbursed or all in operating expenses.
Jennifer Whalen: The financial years presented, including our forward looking guidance, have been recast to conform with the revised presentation for ease of comparison.
Matt: Our financial years presented including our forward looking guidance have been recast to conform with the revised presentation for ease of comparison.
Jennifer Whalen: I will now cover our full year 2024 financial results by site. Bristow's revenues from OES were $113 million higher in 2024 compared to 2023. This increase is attributed to higher utilization and increased rates in Africa, the commencement of new contracts in Brazil, higher utilization in other parts of the Americas and the commencement of a new contract in Norway. This increase in activity and revenues was partially offset by higher repairs and maintenance costs of $20.1 million and operating personnel costs of $8.7 million due to the increased activity. Adjusted operating income from OES was $84 million higher in 2024.
Matt: I will now cover our full year 2024 financial results by segment.
Matt: Frisco's revenues from Iliad for 113 million higher in 2024 compared to 2023.
Matt: This increase is attributed to higher utilization and increased rates in Africa, the commencement of new contracts in Brazil higher utilization in other parts of the Americas and the commencement of a new contract in Norway.
Matt: This increase in activity and revenue this was partially offset by higher repairs and maintenance costs of $20 1 million and operating and personnel costs of $8 7 million due to the increased activity.
Matt: Adjusted operating income from Oh, yes, with $84 million higher in 2024.
Jennifer Whalen: Revenues from government services were $7.6 million lower than 2023, primarily due to a change in rates after transitioning to the long-term contract with the Dutch Caribbean Coast Guard or DCCG. Adjusted operating income was $10 million lower in 2024, primarily due to aircraft availability penalties related to supply chain challenges in UKFAR, startup costs for IRFSAR or IRCG, and the transition to the long-term DCCC contract. However, it is important to note that the duration of these contracts, generally lasting 10 or more years with additional one to three year extension options, provides stable long-term cash flows with high credit quality customers, strong margins, and reliable capital returns once operations are fully ramped.
Matt: Revenues from government services, or $7 6 million lower than 2023, primarily due to a change in rate after transitioning to the long term contract with it that's Caribbean Coast Guard or D. C. P J.
Matt: Adjusted operating income was $10 million lower in 2024, primarily due to aircraft availability penalties related to supply chain challenges and UK SAR.
Matt: Startup costs for Irish Star, our IRS D G.
Matt: And the transition to the long term <unk> contract.
Matt: However, it is important to note that the duration of these contracts generally last in 10 or more years with additional one to three year extension option provide stable long term cash flows with high credit quality customers strong margins and reliable capital return once operations are fully ramped.
Jennifer Whalen: which I will discuss in more detail when we cover the government services outlook momentarily.
Matt: Which I will discuss in more detail when we cover the government services outlook momentarily.
Jennifer Whalen: Moving on to other services. Revenues from this segment were $12.6 million higher in 2024, primarily due to higher utilization and increased rates. Adjusted operating income was consistent with the prior year, as higher revenues were offset by higher operating costs in fixed-wing services of $12.7 million.
Matt: Moving on to other services.
Revenues from this segment were $12 6 million higher in 2024, primarily due to higher utilization and increased rate.
Matt: Adjusted operating income was consistent with the prior year as higher revenues were offset by higher operating costs and fixed wing services at $12 7 million.
Jennifer Whalen: As Chris noted, we are pleased with the stronger-than-expected fourth quarter, which exceeded our upwardly revised outlook range for Q4 and the full year 2024. Our consolidated financial performance in 2024 culminated in revenues increasing by $118 million and adjusted EBITDA increasing by $66.3 million, which is a 39% increase compared to the prior year.
Matt: As Chris noted, we are pleased with the stronger than expected fourth quarter, which exceeded our upward revised outlook range for Q4, and the full year 2024, our consolidated financial performance in 2024 culminated in revenues, increasing by $118 million and adjusted EBITDA.
Increasing by $66 3 million, which is up 39% increase compared to the prior year.
Jennifer Whalen: Turning now to cash flows. The $145 million increase in operating cash flows is attributed to the increase in operating income and an improvement in working capital in 2024. Additionally, our adjusted free cash flows were $161 million in 2024 compared to $28 million in 2023. Bristow continues to benefit from a strong balance sheet and liquidity position. As of December 31st, our available liquidity was approximately $312 million. We have now funded 84% of the capital investments needed for our UK and IRCG contracts. The remaining capital investment is expected to largely conclude in the first half of the year.
Matt: Turning now to cash flow.
Matt: <unk> hundred $45 million increase in operating cash flows is attributed to the increase in operating income and an improvement in working capital in 2024.
Matt: Additionally, our adjusted free cash flows were $161 million in 2024 compared to $28 million in 2023.
Matt: Bristow continues to benefit from a strong balance sheet and liquidity position as of December 31, our available liquidity was approximately $312 million.
Matt: We have now funded 84% of the capital investments needed for our UK and Irish P J contract.
Matt: The remaining capital investment is expected to largely conclude in the first half of the year.
Jennifer Whalen: As we have noted in past earning calls, and continue to reiterate now, we believe that our business model will continue to generate strong cash flows.
Matt: As we have noted in past earnings call and continue to really reiterate now we believe that our business model will continue to generate strong cash flow.
Jennifer Whalen: This is becoming more evident through our new capital allocation framework.
Matt: This is becoming more evident through our new capital allocation framework.
Jennifer Whalen: Moving on to Bristow's Outlook. At this time, we are confirming our previously reported 2025 revenues guidance of $1.4 billion to $1.6 billion and adjusted EBITDA range of $230 to $260 million, as well as our 2026 target guidance of $1.5 billion to $1.8 billion in total revenues and adjusted EBITDA range of $275 to $335 million. 2024 was a year of increased utilization, rate, and full year impact of contract commencement, with Nigeria and Brazil a standout market. And while market conditions in our OES segment are expected to remain constructive in 2025, we expect headwinds from our continued supply chain shortages during the year.
Moving onto Bristol's outlook.
Matt: At this time, we are confirming our previously reported 2025 revenue guidance of $1 4 billion to $1 6 billion.
Matt: And adjusted EBITDA range of $230 million to $260 million as well as our 2026 target guidance of $1 5 billion to $1 8 billion in total revenues and adjusted EBITDA range of $275 million to $335 million.
Matt: 2024 was a year of increased utilization rate and full year impact of contract commencement.
Matt: With Nigeria in Brazil, a standout market.
Matt: While market conditions in our OEM segment are expected to remain constructive in 2025, we expect headwinds from our continued continued supply chain and charges.
Jennifer Whalen: Additionally, the cadence of our contract renewals is such that more of the contracts would commence in late 2025 or 2026, so the more meaningful increases will be visible in 2026. However, given our current utilization levels, coupled with unmet lift demand and long lead times for new builds, we expect to perform well, if not better, in 2025 as reflected in our OES adjusted operating income range of $190 million to $210 million, compared to the $173 million in 2024. Regarding our outlook for our government services segment, adjusted operating income for the government services segment declined by approximately $14 million from 2022 to 2024, primarily due to Startup expenses of $4 million in support of our new IRCG contract.
Matt: The year. Additionally.
Matt: Additionally, the cadence of our contract renewals is such that more of the contracts would commence in late 2025 or 2020 set.
Matt: So the more meaningful increases will be visible in 2026.
Matt: However, given our current utilization levels, coupled with unmatched lift demand and long lead times for new build we expect to perform well if not better and 2025 as reflected in our OAS adjusted operating income range of $190 million to $210 million compared to the Hunter.
Matt: Third $73 million in 2024.
Matt: Regarding our outlook for our government services segment adjusted operating income for the government services segment declined by approximately $14 million from 2022 to 2024, primarily due to.
Matt: Startup expenses of $4 million in support of our new <unk> contract.
Jennifer Whalen: Higher aircraft penalties in the UK star of $6 million due to significant supply chain challenges and $4 million in adverse foreign exchange impacts. As the transition progresses for both IRCG and UK SARTG contracts, we expect adjusted operating income margins to return to 2023 levels at a minimum and for aggregate adjusted operating income generated by our government service segment to increase by approximately 25% in 2026 relative to 2022. We expect full year impacts and subsequent years will contribute meaningfully to our financial results, and the strong margins, stable, long-term cash flows with high credit quality customers will provide reliable capital return well into the middle of the next decade, as illustrated on slide 14.
Matt: Higher aircrafts penalties and UK SAR of $6 million due to the significant supply chain challenges.
Matt: And 4 million adverse foreign exchange impact.
Matt: As the transition progresses for both Irish and UK SAR CPG contracts, we expect adjusted operating income margins to return to 2023 levels at a minimum and for aggregate adjusted operating income generated by our government service segment to increase by approximately 25%.
Matt: In 2026 relative to 2022.
Matt: We expect full year impacts in subsequent years will contribute meaningfully to our financial results and the strong margins stable long term cash flows with high credit quality customers, who will provide reliable capital return well into the middle of the next decade.
Matt: As illustrated on slide 14.
Jennifer Whalen: We continue to believe the growth in our government services segment and diversification of Bristow's revenues will provide long-term value to our customers, investors, as evidenced by the commencement of a dividend payment in Q1 2020.
Matt: We continue to believe the growth in our government services segment and diversification of Bristol's revenues will provide long term value to our customers investors.
Matt: As evidenced by the commencement of a dividend a dividend payments in Q1 2026.
Christopher Bradshaw: At this time, I'll turn the call back to Chris for further remarks.
Chris: At this time I'll turn the call back to Chris for further remarks.
Christopher Bradshaw: Chris? Thank you. As summarized in our press release and slide 19 of the earnings presentation, we are pleased to announce Bristow's new capital allocation framework. with strategic priorities that include protect and maintain a strong balance sheet and liquidity position. pursue high-impact, high-return growth opportunities. and return capital to shareholders via opportunistic share buybacks and quarterly dividend payments. Understanding that offshore energy services, our largest business segment, is inherently volatile, we must sustain a robust balance sheet that can withstand all market cycles. As such, the company intends to pay down debt to a balance of approximately $500 million of gross debt by the end of 2026.
Matt: Chris.
Chris: Thank you.
Speaker Change: As summarized in our press release and slide 19 of the earnings presentation.
Speaker Change: We're pleased to announce Bristol's new capital allocation framework with.
Speaker Change: With strategic priorities that include <unk>.
Speaker Change: Protect and maintain a strong balance sheet and liquidity position.
Speaker Change: Pursue high impact high return growth opportunities.
Speaker Change: And return capital to shareholders via opportunistic share buybacks and quarterly dividend payments.
Understanding that offshore energy services, our largest business segment is inherently volatile we must sustain a robust balance sheet that can withstand all market cycles.
Speaker Change: As such the company intends to pay down debt to a balance of approximately $500 million.
Speaker Change: Our gross debt by the end of 2026.
Christopher Bradshaw: At the same time, we will continue to execute on compelling growth opportunities. such as the long-term government SAR contract. as well as the attractive opportunities we have to introduce new AW189 helicopters to meet customer demand and boost profitability in our offshore energy services. Furthermore, Bristow is committed to return capital to shareholders via a new quarterly dividend program intended to commence in Q1 2026 with an initial dividend payment of $0.125 per share or $0.50 per share annualized. as well as opportunistic share buybacks under the company's new $125 million dollar share repurchase program. We believe this disciplined and focused capital allocation approach provides multiple avenues to create additional value for Bristow's stakeholders.
Speaker Change: At the same time, we will continue to execute on compelling growth opportunities.
Speaker Change: So it's just a long term government SAR contracts.
Speaker Change: As well as the attractive opportunities we have to introduce new AWP, what eight nine helicopters to meet customer demand and boost profitability in our offshore energy services segment.
Speaker Change: Furthermore, risks.
Speaker Change: Bristow is committed to return capital to shareholders via a new quarterly dividend program intended to commence in Q1 2026.
Speaker Change: With an initial dividend payment of $12.05 per share or <unk> 50 per share annualized.
Speaker Change: As well as opportunistic share buybacks under the Companys new.
Speaker Change: $125 million share repurchase program.
Speaker Change: We believe this disciplined and focused capital allocation approach provides multiple avenues to create additional value for bristow stakeholders.
Operator: With that, let's open the line for questions. Angela. Sorry about that.
Andrew: With that let's open the line for questions Andrew.
Andrew: Yeah.
Andrew: Angela.
Andrew: Yeah.
Speaker Change: Sorry about that at this time I would like to remind everyone that in order to ask a question Press Star and then the number five on your telephone keypad. If you would like to withdraw your question Press Star and the number five once again.
Operator: At this time, I would like to remind everyone that in order to ask a question, press star and then the number five on your telephone keypad. If you would like to withdraw your question, press star and the number five once again. We'll pause for just a moment to compile the Q&A roster.
For just a moment to compile the Q&A roster.
Jason Vandal: Our first question comes from Jason Vandal with Evercore. Jason, please go ahead. Thanks. Good morning Chris, Jennifer, and Red. Good morning.
Speaker Change: Our first question comes from Jason Bandel with Evercore.
Speaker Change: Jason Please go ahead.
Jason Bandel: Thanks, Good morning, Chris joined the firm in the road.
Speaker Change: Good morning, good morning, good morning.
Jason Vandal: My first question, let's start with offshore energy services. And the business seems to be doing quite well. Yeah, it looks, sounds constructive. You know, we're kind of used to hearing about white space headwinds and commodity macro headwinds and so forth. So, can you guys, I guess, start by highlighting some of the dynamics that are going on in OES and expand a little bit on how you're keeping utilization levels so high currently. Yes, happy to do so, Jason. And thanks again for joining the call. So I think as we look at our sector, obviously, we are impacted by a lot of the same market drivers that impact other offshore services, spaces like like the drillers, for example.
Jason Bandel: My first question, let's start with <unk>.
Jason Bandel: Offshore energy services, and the business seems to be doing quite well the outlook sounds constructive.
Jason Bandel: We're kind of used to hearing about the white space headwinds.
Jason Bandel: Commodity macro headwinds and so forth. So can you guys are going to start by highlighting some of the dynamics that are going on in Oems and expand a little bit on how you're keeping utilization levels. So high currently.
Speaker Change: Yes happy to do so Jason and thanks again for joining the call. So I think as we look at our sector. Obviously, we are impacted by a lot of the same market drivers that impact other offshore services.
Jason Bandel: <unk> like the Drillers for example.
Christopher Bradshaw: And we certainly do follow those indicators, especially the floating offshore rig count is that mostly the water depth and market that we serve. Our equipment sector is really different from that we have our own supply, demand dynamics. And so what's keeping utilization levels so high, and again, today, they really are at or near 100% effective utilization for the relevant, heavy, super medium and medium helicopter models, is the fact that we had about a decade period, where there were very few, if any new deliveries coming in to the market. Over that period of time, you had a number of helicopters that were sold into other end markets, or were aged out or otherwise disposed out of the available fleet.
Jason Bandel: We certainly do follow those indicators, especially the floating offshore rig count is that mostly the water depth to the market that we serve.
Jason Bandel: Our equipment sector is really different from that we have our own supply demand dynamics.
Jason Bandel: So what's keeping utilization levels, so high and again today, they really are at or near 100% effective utilization for the relevant heavy super medium and medium helicopter models is the fact that we had about a decades period, where there were very few if any new deliveries coming in to the market over that period of <unk>.
Jason Bandel: You had a number of helicopters that were sold into other end markets or were aged out or otherwise disposed out of the available fleet.
Christopher Bradshaw: So there's been a significant tightening of the supply. So as demand has picked up over the last several years, we've resulted in this very tight supply demand dynamic that's informing those at or near 100% effective utilization levels. And importantly, with a very finite number of OEMs who manufacture helicopters, the lead times today are really two plus years, if you're looking for a new aircraft to be delivered. So that's part of what informs our visibility on the supply demand dynamic for our space over the next couple of years. Great.
Jason Bandel: So theres been a significant tightening of the supply so as demand has picked up over the last several years.
Jason Bandel: We have resulted in this very tight supply demand dynamic that's informing those at or near 100% effective utilization levels and importantly.
Jason Bandel: With a very finite.
Number of Oems, who manufacture helicopters.
Jason Bandel: Lead times today are really two plus years, if youre looking for a new aircraft to be delivered so that's part of what informs our visibility on the supply demand dynamics for our space over the next couple of years.
Christopher Bradshaw: And if you dig in a little bit deeper, Chris, just on, I guess, the 2025 outlook here, just some of the key drivers to your growth and maintain that utilization, kind of go around the globe here and kind of note one or two or three pockets of strength that you're seeing. Sure, happy to do that. So, for the purposes of this, I'll focus on the OAS portion of our business. The markets where we're seeing more growth continue to be in West Africa. Nigeria has been a very strong, positive contributor to our business. We expect that to continue in 2025, 26, and really beyond.
Speaker Change: Great and then just digging a little bit deeper Chris just on I guess, the 2025 outlook here just some of the.
Speaker Change: The key drivers to your growth and maintain that utilization kind of go around the globe here and then income note, one or two or three.
Speaker Change: The strength that Youre seeing.
Speaker Change: Sure happy to do that so for the purposes of this ill focus on the OAS portion of our business. The markets. We are seeing more growth continued to be in West Africa.
Speaker Change: Julia has been a very strong positive contributor to our business, we expect that to continue in 2025 26.
Speaker Change: Beyond also Brazil, Brazil is an area, where we've pushed more helicopters on contract.
Christopher Bradshaw: Also, Brazil. Brazil is an area where we put more helicopters on contract, both with Petrobras as well as independent producers there. So, Brazil is an area that has driven growth so far. We expect that to continue, particularly in the latter half, 25, and into 2026. And then the Caribbean triangle, namely thinking about right now, for the purposes of these comments, Suriname, is an area where we're seeing additional projects come up, additional demand for our offshore helicopter services there. So, from a growth rate standpoint, those are the markets that I would highlight. But we also have strength in some of our more mature markets, like the Gulf of Mexico, for example.
Speaker Change: With Petro.
Speaker Change: Petrobras as well as.
Speaker Change: Independent producers there.
Speaker Change: So Brazil is an area that has driven growth. So far we expect that to continue particularly in the latter half of 'twenty five and into 2026.
Speaker Change: And then the Caribbean triangle, namely thinking about.
Speaker Change: Right now for the purpose of these comments Suriname is an area, where we're seeing additional projects come off additional demand for our offshore helicopter services. There. So from a growth rate standpoint, those are the markets that I would I would highlight but we also have strength in some of our more mature markets like the Gulf of Mexico for example, not the same.
Christopher Bradshaw: Not the same growth rates, given the size, but there is incremental demand here in the U.S. We just started a new S92 contract for a customer here in the U.S. at the beginning of this year, and we see incremental demand over the course of 2025 and 2026 as well. Great. That's helpful, Chris.
Speaker Change: Growth rates, given the size, but there is incremental demand here in the U S. We just started a new S 92 contract for a customer here in the U S.
Speaker Change: At the beginning of this year and we see incremental demand over the course of 'twenty five 'twenty six as well.
Great. That's helpful. Chris on let me get one last question here.
Christopher Bradshaw: And let me get one last question in here. In your appendix, you have a slide in the presentation on net asset value. We'd love to kind of hear your thoughts on the importance of that slide, and also hear your thoughts about why you think your stock continues to kind of trade at a discount to the NAV calculation you show on that slide. Thanks. Thank you for the question, Jason. Once a year, we do have a third party firm that does an appraisal of all of the owned aircraft in Bristow's fleet. So, this does not include any attributed value to the least helicopters.
In your appendix you have a slide in the presentation on net asset value, we would love to kind of hear your thoughts on that and the importance of that slide and also I'm curious thoughts about why you think your stock continues to trade at a discount to NAV calculation you show on that slide.
Speaker Change: Yes. Thank you for the question Jason once a year, we do have a third party firm that does an appraisal of all of the owned aircraft and Bristow suite.
Speaker Change: So this does not include any attribute value to the least helicopters. This is really just focused on all the aircraft that we own in the fleet. So this third party appraisal is done on an individual aircraft basis, we roll that up into their estimation of the fair market value of the overall owned aircraft fleet.
Christopher Bradshaw: This is really just focused on all the aircraft that we own in the fleet. So, this third party appraisal is done on an individual aircraft basis. We roll that up into their estimation of the fair market value of the overall owned aircraft fleet, which is a little over $1.5 billion. To that, we add the net book value of other tangible assets, subtract total debt, as well as other liabilities, such as deferred taxes. And this year, that resulted in an aggregate net asset value of about $1.7 billion, which on a per share basis is roughly $57 per share of NAB, which is a significant premium to where the stock price is trading today.
Speaker Change: Which is a little over one 5 billion.
Speaker Change: To that we add the net book value of other tangible assets subtract.
Speaker Change: Total debt as well as other liabilities such as deferred taxes and this year that resulted in an aggregate net asset value of about $1 7 billion.
Speaker Change: Which on a per share basis is roughly $57 per share of NAV.
Speaker Change: Which is a significant premium to where the stock prices trading today.
Jason Vandal: In terms of why there is such a discount to that NAB, I'll probably leave that for other market participants to speculate. Obviously, as a management team, we always think our stock price could be higher. That's a given, but we are pleased to release this year's version of the NAB, which, again, we disclose once a year. Great. Thanks so much for the time. I'll turn it back. All right, thank you.
Speaker Change: In terms of why there is such a discount to that NAV.
Speaker Change: I'll, probably leave that for other market participants to speculate obviously as a management team.
Speaker Change: We always think our stock price to be higher that's a given.
Speaker Change: But we were pleased to release this year's version of the NAV, which again, we disclose once a year.
Speaker Change: Yes.
Speaker Change: Great. Thanks, so much for the time I'll turn it back.
Speaker Change: Alright, thank you.
Operator: Thank you.
Operator: Our next question will come from Jason Vandell. at Evercore. I think we just had Jason there. Oh, I'm sorry. He was, he moved up. Okay, I'm sorry about that.
Speaker Change: Thank you. Our next question will come from Jason Bandel.
Speaker Change: Evercore.
Speaker Change: I think we just had Jason.
Speaker Change: Laurie.
Speaker Change: He was he moved out okay I'm sorry about that our next question will come from Josh Sullivan of the benchmark company.
Josh Sullivan: Our next question will come from Josh Sullivan at the Benchmark Company. Can you hear me? Yeah, hi, Josh. Good morning. How are you? Hey, good morning. Sorry, just want to make sure.
Josh Sullivan: Can you hear me.
Josh Sullivan: Yes, Hi, Josh Good morning, how are you hey, good.
Speaker Change: Good morning, just want to make sure.
Josh Sullivan: Um, so you just mentioned surname there as, you know, an opportunity for growth, you know, is, is pricing coming back in that market, you know, at one point, there seemed to be a dislocation, you know, our customers, you know, changing their perspective there. Good morning, Josh, and thanks again for the question. So we continue to see a really positive, strong, stable pricing across our offshore energy services business. I think that is informed by the tight utilization or the high utilization levels, the tight supply and demand dynamic. So when we're looking to bid on new projects or new contracts, that's the type of consistency and sustainability that we're seeing in the pricing in the market right now.
Speaker Change: You just mentioned three name there.
Speaker Change: And an opportunity for growth.
Speaker Change: Is pricing coming back in that market at one point, there seem to be a dislocation or customers.
Speaker Change: Changing their perspective there.
Speaker Change: Good morning, Josh and thanks again for the question so.
Speaker Change: So we continue to see.
Speaker Change: Really positive strong stable pricing across.
Speaker Change: So our offshore energy services business I think that is informed by the tight utilization.
Speaker Change: The high utilization levels of the types of platelet supply and demand dynamics. So when we're looking to bid on new projects or new contracts.
Speaker Change: That's the type of.
<unk> and sustainability that we're seeing in the pricing in the market right now and that includes Suriname.
Josh Sullivan: And that includes CERNOM.
Josh Sullivan: Really, the growth in CERNOM, I would attribute more to incremental project demand, as you've had some very successful discoveries, which is prompting the initiation beginning later this year of more development and production work, as well as it's promoting additional exploration work by other operators who are looking to potentially hit promising reserves like those that have been discovered there already. Okay, got it.
Speaker Change: But really the growth in Suriname, I would attribute more to incremental project demand as you have.
Speaker Change: <unk> had some very successful discoveries, which is prompting the initiation beginning later this year of more development and exploration development and production work as well as its promoting additional exploration work by other operators, who are looking to potentially hit promising reserves like those that have been discovered there already.
Speaker Change: Okay got it and then I guess just looking at the 24 results.
Jennifer Whalen: And then I guess just looking at the 24 results, you know, you beat your own guidance, what was the outsized driver compared to maybe what you saw at the end of Q3? Thank you, Josh. Good morning. So we were pleased to deliver a better than expected results for the quarter. There were there were several items. Africa has continued to be a driver. Our OES business is a driver in Africa, particularly, but also in Q4, you had, you had both in the Brazil and the UK, some attractive ad hoc opportunities as well to help drive that.
Speaker Change: Your own guidance, what was the outsized driver compared to maybe what you saw at the end of Q3.
Speaker Change: Thank you Josh good morning.
Speaker Change: So we were pleased to deliver.
Speaker Change: As better than expected results for the quarter. There were there were several items Africa has continued to be a driver.
Speaker Change: Our OEM business as a driver in Africa, particularly but also in Q4 you had.
Speaker Change: You had both in the Brazil, and the U K.
Speaker Change: Tractive ad hoc opportunities as well to help drive that.
Josh Sullivan: Got it.
Josh Sullivan: And then, and then I guess just, excuse me, relatedly, as we look at 25, you know, why, why keep the current guide done? You know, what are the major puts and takes to to 25, I guess. Sure. We always knew that 2025 was going to be a transition year with both the UK Star 2G and the Irish Coast Guard contracts ramping up. Our OAS business continues to do well. However, as I noted in my prepared remarks, we do expect supply chain shortages to persist. In addition, many of our contract renewals commenced in late 2025 or 2026, so the impact really get reflected in 2026 and beyond.
Speaker Change: Got it and then and then I guess, just excuse me relatedly as we've looked at 25.
Speaker Change: Keep the current guide.
Speaker Change: What are the major puts and takes to.
Speaker Change: So 25 I guess.
Speaker Change: Sure.
Speaker Change: We always knew that 2025 is going to be a transition year with both the U K SAR Tichy, an Irish coast.
Speaker Change: Costar contracts ramping up.
Speaker Change: Our OEM business continues to do well however, as I noted in my prepared remarks, we do expect supply chain shortages persist.
Speaker Change: In addition, many of our contract renewals commenced in late 'twenty five or 26. So the impact of that is really get reflected in 'twenty and beyond.
Jennifer Whalen: And for those reasons, we affirmed the guidance as we had put it out previously. Which I think, just if I could add there, I think is a positive statement to make in light of what's going on elsewhere and in this climate or the offshore services space, hopefully it's sending a positive message that we can affirm our outlook for both 25 and 26, given the strength that we see for Bristow's business. Got it.
Speaker Change: And for those reasons, we reaffirmed the guidance.
Speaker Change: We had put out previously.
Speaker Change: Which I think just if I could add there I think is.
Speaker Change: Positive statements made.
Speaker Change: In light of what's going on elsewhere and in this climate for the offshore services space hopefully, it's sending a positive message that we can affirm our outlook for about 25 and 26, given the strength that we see for crystals business.
Speaker Change: Got it got it.
Josh Sullivan: And then I guess just one or actually a couple on the new capital allocation framework, you know, congratulations on that.
Speaker Change: And then I guess, just one or a couple on the new capital allocation framework.
Speaker Change: Congratulations on that.
Jennifer Whalen: But if we take the priorities, as you mentioned, they're just one by one, maybe first in the debt, you know, how quickly should we expect you to start paying that down? Thank you for the comments on that, Josh. We are pleased to roll that out and introduce and start implementing that. On the debt, we are looking to pay down debt to gross debt balance of approximately $500 million by the end of next year. And we expect to initiate those advance payments beginning in Q2 of this year. So just over the next couple of months, we should initiate those advance debt payments.
Speaker Change: But if we take the priorities as you mentioned, they're just one by one so maybe first on the debt.
Speaker Change: Quickly should we expect you to start paying that down.
Speaker Change: Thank you for the comments on that Josh we are pleased to.
Speaker Change: Roll that out and introduce.
Speaker Change: Let's start implementing that on the debt we are looking to pay down debt to gross debt balance of approximately $500 million by the end of next year and we expect to initiate those advanced payments beginning in Q2 of this year. So just over the next couple of months, we should initiate those advanced debt payments.
Christopher Bradshaw: And then on the, you know, the second priority just on growth outlets, you know, with the Irish SAR and UK contracting, you know, the helicopters associated with that, you know, coming to the end at some point, what are the other growth outlets, you know, that might require some capital over the next two years? Nothing immediately identified, although we do think there will be some additional opportunities that may come to market. Those include Australia, where we expect that the existing SAR support services there for the government in Australia will come to tender over the next couple of years.
Speaker Change: And then on the second priority just on growth outlooks.
Speaker Change: With the Irish SAR and U K contracting.
Speaker Change: Helicopters associated with that.
Speaker Change: Coming to the end at some point what are the other growth outlets that might require some capital over the next two years.
Speaker Change: Nothing immediately identified.
Speaker Change: Although we do think there will be some additional opportunities that may come to market. Those include Australia, where we expect that the existing SAR support services there for the government in Australia will come to tender over the next couple of years.
Christopher Bradshaw: There might be some opportunities in the Middle East where we're seeing some potential interest to launch search and rescue services to privatize those services for those communities, as well as in Europe, probably more around training opportunities that could exist. There's obviously a high focus on military and security in Europe right now, and I think there's an interest in looking to the private sector to help support some of the training necessary to keep pace with that increased defense activity. So those would be a few areas that we would highlight.
Speaker Change: There might be some opportunities in the middle East where were seeing some <unk>.
Speaker Change: Potential interest to launch search and rescue services.
Speaker Change: Privatize those services.
Speaker Change: For those communities as well as in Europe.
Speaker Change: Probably more around training opportunities that could exist. There is obviously a high focus on military and security in Europe.
Speaker Change: Right now and I think there is an interest in looking to the private sector to help support some of the training necessary to keep pace with that and increased defense activity. So those would be a few areas that we would highlight but again nothing.
Josh Sullivan: But again, nothing identified at this time that would impact CapEx over the time frame you referenced. Got it.
Speaker Change: <unk> at this time that would impact capex over over the timeframe you referenced.
Josh Sullivan: And then I just go on the BIDACs, you know, when should we expect those to begin? And on the new dividend policy, you know, what is the strategy there? Is there a ratio or metric that you're following? Thank you for that question as well. On the buybacks, we are planning to take an opportunistic approach to deployment of capital to repurchase shares. So there's nothing programmatic about the timing or cadence for those. It'll depend on the situation and prevailing market conditions.
Speaker Change: Got it.
Speaker Change: And then just on the buybacks when should we expect those to begin and then on the new dividend policy. What is the strategy there or is there a ratio or metrics that youre if youre following.
Speaker Change: Yep. Thanks.
Speaker Change: Thank you for that question as well on the buybacks. We are planning to take an opportunistic approach to deployment of capital to repurchase shares. So there is nothing programmatic about the timing or cadence for those it'll depend on the situation and prevailing market conditions on the dividends our intention is.
Christopher Bradshaw: On the dividends, our intention is to initiate that quarterly dividend payment beginning in Q1 of 2026. We're initiating that at $0.125 per share quarterly or $0.50 per share annualized initially. That's informed really by the size and stability of the government services cash flows that the company is expected to generate. So the sizing really I would think about as being a function of our government services business. We do have a long-term ambition on being able to grow that dividend payout over time, but again, that's the amount that we intend to initiate in Q1 of 2026.
Speaker Change: To initiate that quarterly dividend payments beginning in Q1 of 2026.
Speaker Change: We're initiating that it's what would have.
Speaker Change: <unk> per share quarterly or <unk> 50 per share annualized.
Speaker Change: Initially that's informed really by the size of the <unk>.
Speaker Change: Stability of the government services cash flows.
Speaker Change: The company is expected to generate.
Speaker Change: Sizing really I would think about as being a function of our government services business. We do have a long term ambition on being able to.
To grow that dividend payout over time, but again, that's the amount that we had to initiate in Q1 of 2000.
Christopher Bradshaw: And just one last one. On the advanced mobility market, you've got some of the eVTOL players talking about international markets being some of the first areas for operations. Obviously, you guys have some very good operating certificates globally. What's your perspective on the market right now and how it might develop over the next year or so? Yeah, we, as you're aware, Josh, but just for the benefit of the broader audience, we have spent some time and resources over the last several years now, really analyzing that space, advanced air mobility, studying, understanding the technology, understanding the variances between the different products that are being developed and may come to market, the teams that are behind them.
Speaker Change: Got it.
Speaker Change: And then just one last one.
Speaker Change: The advanced mobility market.
Speaker Change: <unk> got some of the Vitol players talking about international markets seen some of the first areas for operations. Obviously, you guys have some very good.
Speaker Change: Operating certificates globally, what's your perspective on the market right now and how it might develop over the next year or so.
Speaker Change: Yes.
Speaker Change: As Youre aware, Josh, but just for the benefit of the broader audience. We have spent some time and resources over the last several years now really analyzing that space advanced mobility.
Speaker Change: Studying and understanding the technology understanding the variances between the different products that are being developed and may come to market. The teams that are behind them.
Christopher Bradshaw: We've been in a lot of discussions with those. We have announced some partnerships with some of those. We are interested in how, though, the new technology can be deployed to meet. demand from our existing customer base as well as a potential new set of customers. In terms of timing, really, those aircraft are still in the certification stage. It's uncertain exactly what those timelines will be. I think there's a lot of optimism that the first Western Advanced Air Mobility products will be certified later this year. Obviously, there's some uncertainty around that, particularly with what's going on with the regulatory authorities that are relevant here.
Speaker Change: Been a lot of discussions with those we have announced some partnerships with some of those.
Speaker Change: We are interested in how the new technology can be deployed to meet.
Speaker Change: Demand from our existing customer base as well as a potential.
Speaker Change: New set of customers in terms of timing.
Speaker Change: Really those aircrafts are still in the certification stage, it's uncertain exactly what those timelines will be I think theres a lot of optimism that the first western.
Speaker Change: Advanced our mobility products will be certified later this year.
Speaker Change: Obviously, there is some uncertainty around that particularly with what's going on with the regulatory authorities.
Speaker Change: That are relevant here.
Christopher Bradshaw: But we'll be optimistic that those timelines will advance.
Speaker Change: It will be optimistic that those times timelines will will advance.
Christopher Bradshaw: We were pleased to publicly announce that Bristow will be participating in, really, a first-of-its-kind exercise later this year in a regulatory sandbox in Norway, where we will be operating one of those products, namely Beta's e-CTOL, or conventional takeoff and landing aircraft, in Norway on a real-world, real-life basis, testing that technology in partnership with not just Beta, but also the government there. So that's an exciting opportunity to demonstrate some real-world data, help prove out some of the assumptions and use cases. And I think, hopefully, clarify a visible path to more commercial operations for these technologies moving forward.
Speaker Change: We were pleased to publicly announce that bristow will be participating in really a first of its kind.
Speaker Change: Exercise later, this year and our regulatory sandbox in Norway, where we will be operating one of those products, namely betas.
Speaker Change: E C tau or conventional takeoff and landing aircraft in Norway.
Speaker Change: On a real world real life basis testing that technology in partnership with not just data, but also the government there.
Speaker Change: So that's an exciting opportunity to demonstrate some real world data help prove out some of the assumptions and use cases.
Speaker Change: And I think hopefully clarify.
Speaker Change: A visible path to more commercial operations for these technologies moving forward.
Josh Sullivan: Great. Thank you for your time. Thanks, Josh. Thank you.
Speaker Change: Great. Thank you for all the time.
Speaker Change: Thanks, Sean.
Savi Sisk: Our next question will come from Savi Sisk with Raymond James.
Speaker Change: Thank you. Our next question will come from Savi <unk> with Raymond James.
Savi Sisk: Hey, good morning, everyone. I just had actually a couple of follow up questions. Just on the government services side, I recognize those are kind of longer term contracts. And you mentioned this a little bit in terms of Europe. But, you know, clearly, there's a lot of noise around government spending in the US. And I was just kind of wondering if you're seeing anything that today that gives you a reason to be more optimistic or have concerns on the US side of things. Obviously, thank you for the question. There's a lot to follow there. Heavy news flow in the US, certainly.
Savi: Hey, good morning, everyone.
Speaker Change: Just actually a couple of follow up questions.
Speaker Change: Just on the government services side I recognize those that kind of longer term contracts and you even mentioned Mr. Hope in terms of Europe.
Speaker Change: Clearly, there's a lot of noise around government spending in the U S and I was just kind of wondering if youre seeing anything that today that gives you a reason to be more optimistic or have concerns on the U S side of things.
Speaker Change: Obviously, there's thanks for the question Theres, a lots of follow their heavy news flow in the U S. Certainly.
Christopher Bradshaw: I think our view right now is we expect continuation of the same with some optimism for potential incremental opportunities or growth over time, particularly if the government is focused on being more efficient and thinking about how they can adopt and work with more of a private sector model to capture some of those efficiencies. That could be an incremental opportunity, but we will continue to actively monitor the news flow and look to see where we can potentially glean some of those opportunities for Bristow.
Speaker Change: I think our view right now is.
We expect.
Speaker Change: The continuation of the same with some optimism for potential incremental opportunities our growth over time, particularly.
Speaker Change: If the government is focused on being more efficient and thinking about how they can adopt and worked with.
Speaker Change: More of a private sector model to capture some of those efficiencies that could be an incremental opportunity, but we will continue to.
Speaker Change: Actively monitor the news flow and look to see where we could potentially glean some some of those opportunities for bristow.
Savi Sisk: Appreciate that.
Christopher Bradshaw: And just to follow up on that kind of advanced mobility side of the world. I realize it's still very early days across. But if you look at, you know, your operations globally, where do you think will be kind of easier to initiate or where there might be more demand to initiate some of these operations? Our view is that it could be outside of some of the major countries and regulatory bodies. So maybe not the U.S. or Europe, but maybe some of the first places where you can actually put these to work at scale would be in places like the Middle East, where you have a lot of interest, very heavy state sponsorship that can make things like that happen quickly, or in Africa, where again, there's perhaps fewer hurdles there to launching operations of this nature.
Speaker Change: I appreciate that and then just a follow up on that can I add natural ability.
Speaker Change: Side of the World.
Speaker Change: I realize it's still very early days across but if you look at.
Speaker Change: Your operations globally, where do you think it will be kind of easier to initiate or where there might be some more demand to initiate some of these operations.
Speaker Change: Yes, our view is that it could it could be outside of some of the major <unk>.
Speaker Change: <unk> and regulatory bodies so.
Speaker Change: Maybe.
Speaker Change: Not.
Speaker Change: <unk> or Europe, but maybe some of the first places where you can actually.
Speaker Change: Put these to work at scale would be in places like the Middle East, where you have a lot of interest very heavy state sponsorship.
Speaker Change: And that can make things like that happen quickly or in Africa, where again, there is perhaps fewer hurdles there the launching operations of this.
Savi Sisk: So in things that we're looking to do either directly with the aircraft manufacturers or in partnership with other players in the space, those are some of the areas that could move more quickly than others, in our view. Hopeful. Appreciate it.
Speaker Change: Nature so.
Speaker Change: And things that we're looking to do either directly with the aircraft manufacturers or in partnership with other players in the space. Those are some of the areas that that could.
Speaker Change: Could move more quickly than others in our view.
Speaker Change: Helpful. I appreciate it thank you.
Savi Sisk: Thank you.
Speaker Change: Thank you.
Speaker Change: Yeah.
Nikolai Tomfield: Our next question will come from Nikolai Tomfield with Friendly Security. Hi there. Good morning.
Speaker Change: Thank you. Our next question will come from Nikolay <unk> with Fearnley Securities.
Nikolai Tomfield: So I believe most of my questions already have been covered, but just one final question from my side. With the Irish Coast Guard and the UK SAR 2G contract being in sort of called the transition phase. When do you sort of believe that we, when do you anticipate that we will see the full ramp of and the full earnings potential with this contract. You'll start to see a cleaner picture in 2026. That won't be a perfectly clean one, really. That'll be 27 and beyond. But we've always known that both 2024 and 2025 this year, we're going to be transition years as we are launching those services.
Speaker Change: Good morning.
Speaker Change: So I believe most of my questions already have been covered but just one final question from my side.
Speaker Change: With the with the.
Speaker Change: Alright, Rich coast guard in the U K <unk> contract being in sort of the transition phase.
Speaker Change: Yes.
Yes.
Speaker Change: When do you sort of believe.
Thus we.
Speaker Change: When do you think.
Great.
Speaker Change: We will see the full ramp up.
Speaker Change:
Speaker Change: The full earnings potential.
Speaker Change: This contract.
Speaker Change: Youll start to see a cleaner picture in 2026 that won't be a perfectly clean one really that will be 27 beyond but we've always known that both 2024 and 2025. This year, we're going to be transition years as we were launching those services, we do have a pretty extended period of time.
Christopher Bradshaw: We do have a pretty extended period of time of startup costs, given the scale and complexity of these operations. So certainly a bit of a drag from some of the startup costs impacting both 24 and 25 profitability margins. But 26, again, should be a cleaner picture of the earnings potential, particularly from from Ireland. And then 27 and beyond should be, we think, an even cleaner view on the earnings potential and profitability from that part of our business, which we expect to carry on well into the middle of the next decade. All right. Let's go. Thank you.
Speaker Change: Startup costs, given the scale and complexity of these operations so certainly.
Speaker Change: A bit of a drag from some of those startup costs.
Speaker Change: Packaging, both 24, and 25 of profitability margins, but 26 again should be a cleaner picture.
Speaker Change: The earnings potential.
Speaker Change: Particularly from Ireland, and then 27 and beyond should be.
Speaker Change: Thank you.
Speaker Change: And even cleaner view on the the earnings potential and profitability from that part of our business, which we expect to carry on well into the middle of the next decade.
Speaker Change: All right that's clear thank.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you our final question will come from Colby <unk>.
Colby Tassa: Our final question will come from Colby Tassa. All right, thanks for having me on the call. Multiples in the offshore, multiples have compressed their offshore energy levered equities in the last 12 months.
Speaker Change: Alright, Thanks for having me on the call.
Multiples in the offshore multiples have compressed our offshore energy Levered equities in the last 12 months. When you think about opportunities for growth for your business have you seen any more opportunities become available given the multiple compression in the energy space.
Colby Tassa: When you think about opportunities for growth for your business, have you seen any more opportunities become available given the multiple compression in the energy space? Good morning and thank you for the question. In our sector, since Bristow is really the only public company today, there are not directly some other public multiples to reference for the what could be potential M&A opportunities since they're private. Nevertheless, similar dynamics prevail, right? So I think I certainly understand the nature of the question. We'll finite in number in our space. There's only really a few players out there. But for ones that meet our parameters and become actionable, we will spend the time to analyze them and see if there's a way to implement M&A that could be value-added for shareholders.
Speaker Change: Hey, good morning, and thank you for the question.
Speaker Change: And our sector since.
Speaker Change: Since Bristow is really the only public company today.
Speaker Change: Theyre not directly some other public multiples to reference for the what could be potential M&A opportunities since they are private nevertheless, similar dynamics prevail right. So.
Speaker Change: I think that certainly understand the nature of the question, we will continue to look at those opportunities.
Speaker Change: And the relatively finite number in our space is only fully really a few players out there but.
Speaker Change: But.
Speaker Change: For ones that meet our parameters.
Speaker Change: And become actionable, we will spend the time to analyze them and see if theres a way.
Speaker Change: To implement M&A that could be value added for shareholders certainly we did that with.
Christopher Bradshaw: Certainly we did that with the era Bristow merger in 2020. We were able to also add via a direct acquisition a business to our government services, which expanded us into the Falklands and UK MOD business. So we do have, I believe, a track record of being able to execute when the opportunities are there, and we'll continue to monitor them and see if any of them become actionable over the near to medium term.
Speaker Change: Era Bristow merger in 2020, we were able to also add the direct.
Speaker Change: Position, our business to our government services, which expanded us into the Falklands and UK Mod business.
Speaker Change: So.
Speaker Change: We do have I believe our track record of being able to execute when the opportunities are there and we'll continue to monitor them and.
Speaker Change: And see if any of them become actionable over the near to medium term.
Christopher Bradshaw: Perfect. And as a quick follow-up, I know you've already touched on the U.S. government a little bit, but tariffs are on again, off again, and there seems to be no concrete answer. But I wanted to ask how you're thinking about the potential impact for your company, given you have some new-build aircraft coming over the next few years, and if you're planning for this impact at all. Yes, that's an important question. Definitely something that we're actively monitoring. As an aviation operator, we do have a large and very international complex supply chain. So tariffs or really anything that introduces uncertainty to that supply chain would be a potential issue for our business.
Speaker Change: Perfect and as a quick follow up I know you've already touched on the U S government, a little bit but tariffs are on again off again and it seems to be no concrete answer, but I wanted to ask how youre thinking about the potential impact to your company. Given you have some newbuild aircrafts coming over the next few years and if you are planning for this impact at all.
Speaker Change: Yes, that's an important question definitely something that we're actively monitoring as an aviation operator, we do have a.
Speaker Change: A large and very international complex supply chain. So tariff so really anything that introduces uncertainty to that supply chain would be a potential issue for our business. We do have.
Christopher Bradshaw: We do have a portion of our supply chain that comes through Canada, engines and other components. And we have a heavy portion of our supply chain that's coming out of Europe. So this is definitely an important issue that we monitor. As it relates to the new deliveries that we're bringing in to the fleet, whether it's the H135 light twins that we're taking delivery of right now, or the AW189 orders that we have in place, those are fixed and firm prices. So we will not be impacted by tariffs.
Speaker Change: A portion of our supply chain that comes through Canada engines, and other components and we have a heavy portion of our supply chain coming out of Europe. So this is this is definitely an important.
Speaker Change: Tissue that we monitor as it relates to the new deliveries that we're bringing into the fleet, whether it's the <unk> hundred 35 light twins that were taking delivery of right now.
Speaker Change: For the AWS <unk> nine orders that we have in place.
Speaker Change: Those are our fixed and firm prices. So we will not be impacted by tariffs.
Operator: Thank you, that's all I have. Thank you. As a reminder, once again, if you have a question, you may press star 5 on your telephone keypad. Thank you. We have no raised hands at this time.
Speaker Change: Thank you that's all I have.
Speaker Change: Thank you as a reminder, once again if you have a question you May press star five on your telephone keypad.
Speaker Change: Thank you we have no reasons at this time.
Christopher Bradshaw: I will now turn it back over for closing remarks.
Speaker Change: I will now turn it back over for closing remarks.
Operator: Thank you, Angela, and thanks, everyone, for joining the call. Appreciate the time and look forward to speaking again next quarter. Stay safe and well. Thank you.
Speaker Change: Thank you Angela and thanks, everyone for joining the call I appreciate the time and look forward to speaking again next quarter stay safe and well.
Speaker Change: Okay.
Operator: The call has now concluded. Please feel free to disconnect.
Speaker Change: Thank you the call has now concluded please feel free to disconnect.
Speaker Change: [music].
Speaker Change: Thank you.
Speaker Change: [music].