Q1 2025 Civeo Corp Earnings Call
Speaker Change: [music].
Greetings and welcome to the city of Corporation first quarter 2025 earnings call.
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A brief question and answer session will follow the formal presentation.
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It is now my pleasure to introduce your host for you.
Nielsen he's going to hit.
Bradley Dodson: Thank you and welcome to <unk> first quarter 2025 earnings conference call today, our call will be led by Bradley Dodson, <unk>, President and Chief Executive Officer, and Paul and Gary <unk>, Chief Financial Officer and Treasurer.
Bradley Dodson: Before we begin we would like to caution listeners regarding forward looking statements.
Bradley Dodson: To the extent that our remarks today contain anything other than historical information. Please.
Bradley Dodson: Note that we're relying on the safe harbor protections afforded by federal law.
Bradley Dodson: Any such remarks should be read in the context, 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 Robyn.
Robyn: Thank you Greg and thank you all for joining US today, our first quarter 2025 earnings call.
Robyn: I'll start by highlighting some of the key takeaways before walk you through a brief summary of our first quarter 2025 financial results.
Robyn: And Colin will provide a financial and segment level review.
Colin: Conclude with our updated 2025 guidance and underlying regional assumptions.
Robyn: We'll then open the call for questions.
Robyn: The key takeaways today are and I'll start with the changes we've made to our capital allocation strategy.
Robyn: To accelerate the return of capital to investors and enhanced long term shareholder value.
Robyn: Under our updated framework. The board has increased our share repurchase authorization from the previously announced 10% to 20% of total shares outstanding.
Robyn: It has suspended our quarterly dividend.
Robyn: We intend to allocate 100% of our annual free cash flow to.
Robyn: Share repurchases until this expanded authorization is completed.
Robyn: We expect to primarily use open market purchases to execute the authorization, while continuing to evaluate or expedited methods.
Robyn: Repurchasing shares to augment these open market purchases.
Robyn: In the first quarter of 2025 turns $6 8 million of capital to shareholders through a combination of our quarterly dividend and share repurchases, bringing our total share repurchases since the inception of the program in 2020, one for approximately 22% of <unk> common shares outstanding.
Well I'm the newly increased share repurchase program, we intend to utilize 75% of annual free cash flow to continue funding share repurchases.
Robyn: This is all driven.
Robyn: Given <unk> ability to generate free cash flow is generated free cash flow and has done. So every year for the last 10 years.
Robyn: As we've previously noted serious recapitalize historically weighted to the second half of the year seasonal.
Robyn: I'll now turn to the regional.
Robyn: Observations in Australia, we continued to experience strong occupancy levels revenues in the business increased 13% year over year and on a constant currency basis, 18% compared to the first quarter of 2024.
Robyn: Primarily driven by increased activity in our integrated services business, which was strengthened by the recently announced.
Robyn: One 4 billion Australian contract renewal and expansion.
Robyn: We are pleased with the progress we're making towards completing our previously announced acquisition of the port villages in the Australian Bowen Basin, which.
Robyn: Which will expand our presence into a new area of that base.
Robyn: Upon close we expect we continue to expect it will.
Robyn: We continue to expect that this transaction will close in the second quarter and it will expect we also expected to be immediately accretive to operating cash flow.
Robyn: Turning to Canada.
Robyn: We experienced lower billed rooms as customers continued to reduce capital spending in response to investor pressure to return capital to their shareholders as well as ongoing economic and political uncertainty.
Robyn: During the quarter, we reduced our Canadian employee head count by approximately 25%, we recorded a restructuring charge of approximately $1 million, which was excluded from adjusted EBITDA.
Robyn: As our customers continue to navigate macroeconomic challenges, including weaker oil prices, new export tariffs and pressure to return capital and reduce costs. We are focusing on taking additional steps to optimize our cost structure and better align our business with realities of the current environment.
Robyn: Okay.
Robyn: We remain focused on controlling what we can control in the second and third quarters of 2025, we expect to continue to execute on cost reduction actions, while maintaining a sharp focus on operational execution and improved performance across our largest in Canada.
Robyn: Okay.
Robyn: Given our focus on enhancing operational efficiency.
Robyn: We have engaged an independent a leading independent consulting firm to review the Companys North American cost structure.
Robyn: This process is part of our commitment to identifying sustainable opportunities to enhance shareholder value streamline overhead costs in line.
Robyn: Cost with strategic priorities.
Robyn: Alright.
Robyn: I'd like to take a moment to remind you of the supplemental disclosure we introduced on last quarter's earnings call and we'll be providing on a quarterly basis moving forward.
Robyn: This disclosure, which is intended to better illustrate the evolution of our business and our current asset mix shows the revenues from our asset light business, which includes hospitality services.
Robyn: Our island assets as well as assets owned by our customers.
Robyn: Secondly, the asset intensive business, which is largely the accommodations revenue associated with our lodge and village assets as well as our Canadian mobile camp business.
Robyn: The supplemental data schedule can be found in our earnings press release.
Colin: With that I'll turn it over to Colin.
Colin: Thank you Bradley and thank you all for joining US. This morning today, we reported total revenues in the first quarter of $144 million with a net loss of $9 8 million or 72 cents per diluted share.
Colin: During the first quarter, we generated adjusted EBITDA of $12 7 million.
Colin: And negative operating cash flow of eight 4 million.
Colin: As a reminder to listeners seasonally the first quarter tends to see negative working capital at a negative working capital impact on cash flow.
Colin: The decrease in adjusted EBITDA in the first quarter of 2025 compared to 2024 was primarily due to decreased build rooms Canadian lodges as lower level of customer spending is expected to continue as producers in the region remain keenly focused on reducing costs in response to uncertainty in the up and the current operating environment.
Colin: Let's now turn to the first quarter results for our two segments I'll begin with a review of the Australian segment performance compared to his performance a year ago.
Colin: First quarter revenues from our Australia segment were $103 6 million up 13% from $91 7 million in the first quarter of 2024, adjusted EBITDA was $20 5 million relatively flat year over year.
Colin: The increase in revenues is primarily primarily driven by increased integrated services activity related to our recent contract announcements.
Colin: Adjusted EBITDA did not increase proportionately to revenues year over year, primarily due to increased power and staffing cost in the quarter operating cost management will continue to be a focal point throughout 2025.
Colin: Australia and billed rooms in the quarter were 625000 rooms.
Colin: Modestly up from the first quarter of 2024, our daily room rate for our Australian villages in U S dollars or 70, $575, which decreased from $77 in the first quarter of 2024, primarily due to the weakening of the Australian dollar.
Colin: Turning to Canada, we recorded revenues of $40 4 million as compared to $67 2 million in the first quarter of 2024.
Colin: Adjusted EBITDA for the segment was negative zero point $2 million a year.
Colin: Year over year decrease and a decrease in adjusted EBITDA of $5 9 million was driven by the wind down of LNG related activity.
Colin: The completion of pipeline activity for our mobile camps and lowered billed rooms as a result of our customers' recent focus on cost and head count reductions as well as the loss of Fort Hills related occupancy from the sale of our Mcclelland Lake Lodge.
Colin: Okay.
Colin: During the first quarter billed rooms in our Canadian lodges totaled 359.
Colin: It was down from $610000.
Colin: First quarter of 2020 due to the factors just mentioned.
Colin: Our daily room rate for the Canadian segment in U S dollars was 93, which decreased from $98 in the first quarter of 2024.
Colin: Entirely due to the weakening of the Canadian dollar.
Colin: Looking at our capital structure Cdos net debt as of March 31, 2025 was $59 million.
Colin: And $21 million increase since December 31, 2024, our net leverage ratio for the quarter was <unk> eight times as of March 31 2025.
Colin: As of March 31, 2025 city had a total liquidity of approximately $162 million on liquidity position continues to support our ability to return capital to shareholders close our previously announced Australian acquisition and maintain a prudent leverage ratio.
Colin: Finally, I'll turn to capital allocation I'll start with Capex.
Colin: On a consolidated basis capex for the quarter of 2020 for the first quarter of 2025 was $5 3 million.
Colin: Down from $5 $6 million in the first quarter of 2020 for capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages during.
Colin: During the first quarter of 2025, we repurchased approximately 153000 shares through our share repurchase program for a total cost of $3 3 million.
Colin: As Brian mentioned this brings our total return of capital to shareholders in the first quarter of 2025.
Colin: Importantly, dividends and share repurchases to $6 8 million.
Colin: With our newly increased share repurchase authorization and commitment to accelerating our churn of capital to shareholders. We continue to believe that repurchasing shares is a high return value enhancing opportunity. This new capital return framework reflects reflects that and we look forward to reporting on our progress repurchasing shares next quarter with that.
Bradley Dodson: I will turn the call back over to Bradley.
Bradley Dodson: Thank you Tom I'll provide some additional color <unk>.
Bradley Dodson: Oh allocation framework, where I turn to discussion of our updated guidance expectations for the balance of 2025.
Bradley Dodson: In the first quarter the board authorized a new share repurchase program for up to 10% of the total common shares outstanding over the next 12 months as part of our commitment to capitalizing on attractive opportunities to enhance shareholder returns.
Bradley Dodson: This authorization followed the completion of the prior 5% share repurchase authorization announced in September 2024, which was completed in just six months.
Bradley Dodson: When we announced the board's authorization of the share repurchase program last year and reiterated in the first quarter announcements.
Bradley Dodson: We also made it clear that our capital allocation strategy remains under continuous review consistent with our focus on driving long term value creation for shareholders.
Bradley Dodson: To that end, we are pleased to announce today, our revised capital allocation framework, resulting through our thorough review.
Bradley Dodson: Of the framework and high engagement with our shareholder base.
Bradley Dodson: Under our refreshed capital allocation strategy, we are rebalancing our capital return next to prioritize share repurchases as the primary vehicle for returning capital to shareholders and eliminating <unk> quarterly dividend to maximize flexibility.
Bradley Dodson: Given the macroeconomic headwinds and tariff driven uncertainties, we believe maintaining financial flexibility is essential.
Bradley Dodson: As we have seen across industries over the last several weeks a policy changes and supply chain disruptions had a significant impact.
Bradley Dodson: We'll continue to assess more expedited methods for repurchasing shares.
Bradley Dodson: Underscoring our commitment to returning capital to shareholders. Our board has approved an increase to the share repurchase authorization, we announced in March.
Bradley Dodson: <unk> the amount of shares available for repurchase from 10% to 20% of the total shares outstanding.
Bradley Dodson: We intend to allocate 100% of annual free cash flow to executing repurchases and open market in the open market to complete this authorization as soon as practicable.
Bradley Dodson: Given the current valuation of city of shares in our outlook. We believe this approach is prudent value enhancing and in the shareholders' best interest.
Bradley Dodson: This decision demonstrates our board and management's confidence in <unk> future prospects operational resilience and ability to deliver long term shareholder value. Despite the current market challenges and pressure on our stock price.
Bradley Dodson: Okay.
Bradley Dodson: Once we have completed this risk recently expanded share repurchase authorization. Our plan is to utilize 75% of free cash flow annually to fund ongoing share repurchases.
Bradley Dodson: Our ability to take these important steps to enhance shareholder returns is built on the foundation we have worked.
Bradley Dodson: The foundation of work, we have done over the last several years to strengthen our balance sheet.
Bradley Dodson: Having surpassed our target net leverage ratio of one times through our disciplined focus on debt reduction given our strong liquidity position and continued solid cash flow generation, we now have ample financial flexibility.
Bradley Dodson: We are confident this capital return strategy that supports long term share long term value creation, while reducing risks amidst a more uncertain global backdrop.
Bradley Dodson: We will remain agile and responsive to market conditions, while advancing our objective of delivering superior returns for city of shareholders.
Bradley Dodson: I would now like to turn our discussion to our full year 2025 guidance on a consolidated basis, including the underlying macro and regional assumptions.
Bradley Dodson: We are lowering our full year 2025 revenue and adjusted EBITDA guidance to a range of $620 million to $650 million of revenues for 2025 $75 million to $85 million of adjusted EBITDA to 25.
Bradley Dodson: We are also lowering our full year 2025 capital expenditure guidance to 20% to $25 million.
Bradley Dodson: To remind everyone. This guidance continues to exclude the contribution from our recently announced Australian acquisition, which is still expected to close by the end of the second quarter.
Bradley Dodson: Subject to regulatory approvals and customary closing conditions.
Bradley Dodson: We will provide updated 2025 guidance once the transaction has closed.
Bradley Dodson: Taking into account our new adjusted EBITDA Capex guidance, we are lowering our free cash flow guidance for 2025% to $20 million to $30 million.
Bradley Dodson: As a reminder.
Bradley Dodson: This 2025% free cash flow guidance is burdened by approximately $10 million of one time deferred tax payments related to fiscal 2020.
Bradley Dodson: I will now provide the regional outlooks and corresponding underlying assumptions by region.
Bradley Dodson: And Australia customer activity in our own villages remained strong.
Bradley Dodson: Three of our Bowen basin villages are currently operating at full capacity.
Bradley Dodson: And we're seeing strong occupancy across the remainder of our own portfolio.
Bradley Dodson: Based on these trends we are seeing in the market. We expect these levels to continue throughout the balance of 2025.
As it relates to our integrated services business, we are continuing to experience increased demand from a recent contract award.
Bradley Dodson: We expect to build on the strong increasing momentum in 2025, as we work towards our goal of achieving $500 million Australian dollars of integrated services revenues by 2027.
Bradley Dodson: Our outlook assumes modest Australia, and build brand growth as well as expansion in our integrated services business.
Bradley Dodson: Yeah.
Bradley Dodson: In Canada as I mentioned earlier, we expect performance will continue to be impacted by economic and political uncertainty.
Bradley Dodson: As we continue executing on the restructuring actions, we announced in the fourth quarter.
Bradley Dodson: Including cold shutting two launches in the second quarter, we expect to incur another $1 million in restructuring charges.
Bradley Dodson: Moving forward, we are focused on remaining agile and responsive and we will continue to assess potential opportunities to reduce our cost structure as we navigate the challenging and dynamic environment.
We continue to believe that 2025 is a transitional year for our Canadian Division.
Bradley Dodson: As our Canadian Division adjusts to lower revenue expectations, driven by customers' response to lower oil prices investor and investor pressure.
Bradley Dodson: We expect associate changes to our operations will impact free cash flow performance as a result.
Bradley Dodson: However, we believe our consistent free cash flow generation, just want us to be the strongest financial.
Bradley Dodson: <unk>.
Bradley Dodson: We will continue to do.
Bradley Dodson: So going forward.
Bradley Dodson: Before we open the heading into the call I'd like to close by saying we are confident in our team's ability to execute our updated capital allocation framework and generate value for our long term shareholders.
Bradley Dodson: With that I'll take questions.
Bradley Dodson: Okay.
Bradley Dodson: Thank you we will.
Bradley Dodson: We'll now be conducting a question and answer session and he would like to ask a question. Please press star and then one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
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Bradley Dodson: One moment, please while we poll for questions.
Bradley Dodson: Okay.
Bradley Dodson: Yeah.
Bradley Dodson: The first question, we have is from Stephen <unk> of Stifel. Please go ahead.
Speaker Change: Thanks, Good morning, everybody.
Bradley Dodson: Sure.
Bradley Dodson: So two two questions for me.
Bradley Dodson: You went over to capital allocation framework pretty well, but where I was curious about is.
Bradley Dodson: How much of this is just sort of macro uncertainty on the dividend versus the internal or board views that it's a better way to create value.
Bradley Dodson: And is this something that you think you'll revisit when when.
Bradley Dodson: When the macro backdrop becomes clearer.
Speaker Change: It's more of the latter Stephen Thank you for the question.
Speaker Change: An extensive shareholder engagement over the last few months became apparent.
Speaker Change: And also just from the trading.
Speaker Change: History that we werent getting value from the dividend.
Speaker Change: Obviously, the whole drive both with the dividend dividends historically and share repurchase was returned capital to shareholders.
And.
Speaker Change: It wasn't being valued in.
Speaker Change: It appeared to us and others.
Speaker Change: Shifting that that capital to share repurchase made more sense at this time.
Speaker Change: As we mentioned in the prepared comments, we're constantly looking at our capital allocation. So we'll evaluate in the future but in the near term.
Speaker Change: And for the foreseeable future it appears.
Speaker Change: We believe that buying back stock makes more sense.
Speaker Change: Thanks, that's sort of in line with the feedback I've gotten too so I appreciate the comments.
Speaker Change: And I think the other.
Speaker Change: Bigger picture question and I May ask this incorrectly, but you had you had a press release out.
Speaker Change: A week ago.
Speaker Change: Our extended relationship up in Canada.
Speaker Change: It was with the six nations I forget exactly but I was curious.
Speaker Change: What what that what's the underlying benefit to that to the business, but also maybe.
Speaker Change: Part of the answer we've talked about in the past kind of the source gas for Canadian LNG and has there been any change.
Speaker Change: And your ability to sort of maybe penetrate that market.
Speaker Change: So we're very pleased to announce the joint venture with six nations.
Speaker Change: As you know and I think our investors know first nations relationships are critically important to win work in Canada, we have an extensive history, including a gold certified in terms of our industrial our indigenous relations.
Speaker Change: Efforts.
Speaker Change: And this is just an extension of that.
Speaker Change: In many cases, a FERC patient relationship is necessary to bid on work and we're excited about the prospects now that we have this relationship in place.
Speaker Change: With our partners on newer particularly.
Speaker Change: In Eastern Canada.
Speaker Change: So there is some of it your second part of your question addressed source gas. This is not related to that.
Speaker Change: Okay, Okay and is there anything on the gas side that has changed.
Speaker Change: Sure.
Speaker Change: Have a great handle honestly on the outside of the competitive landscape in that region is there is there any opportunity there or is that is that something that's too hard to tap into given the established players there.
Speaker Change: Our focus on LNG activity in Canada.
Speaker Change: <unk> is really related around three projects.
Speaker Change: Everyone's watching LNG, Canada closely to see if they will move forward with phase two of that project.
Speaker Change: Currently going into initial production.
Speaker Change: The second piece, we've seen Cedar LNG reach.
Speaker Change: <unk> positive.
Speaker Change: And that's all moving forward in wheat, and we have a handful of guests from that project is staying with us at our Sitka Lodge, but it is not fully ramped up yet.
Speaker Change: Then the third project that we're watching closely is the western LNG project are some lessons that would utilize the <unk> pipeline, which would need to be built which would be a great opportunity for our mobile camp business and prospectively potentially additional work on the coast.
Speaker Change: They filled out there.
Speaker Change: Liquefaction capabilities.
Speaker Change: Okay, great. Thank you.
Speaker Change: Yeah.
Speaker Change: The next question, we have is from Steve <unk> of Sidoti <unk> co. Please go ahead.
Speaker Change: Good morning. This is Alex on for Steve Thanks for taking questions.
Speaker Change: Just to build on that last.
Speaker Change: Hey, good morning.
Speaker Change: Just to build on that last question you know given the completion of the Canadian election are there any other larger infrastructure projects, which you think could generate revenue in the next few years.
Speaker Change: Well I would say things that have been talked about during the campaign where potential additional pipeline work.
Speaker Change: Pipeline pipeline projects.
Speaker Change: Projects were to move forward Thats, great opportunities for our mobile camp business.
Speaker Change: The other big projects would be pathways.
Speaker Change: And carbon carbon sequestration in Alberta around the oil sands projects.
Speaker Change: Okay. Thank you.
Speaker Change: And you also mentioned you know hiring a consulting firm to help with cost cutting measures could you talk a little bit about what's on the table just wondering the types of kind of scope and.
Speaker Change: How that might develop across North America.
Speaker Change: Well, primarily theres been a significant shift in our in our Canadian.
Speaker Change: The outlook for our base Canadian business, So it's primarily help.
Speaker Change: And addressing that cost structure.
Speaker Change: But generally speaking and we will address all north American cost structure.
Speaker Change: Okay. Thank you that's all from us.
Speaker Change: The next question, we have is from Dave Stones of Stonegate. Please go ahead.
Speaker Change: Morning, everyone.
Speaker Change: Just wanted to start.
Speaker Change: Good morning, just wanted to start with I know head count tends to be probably the biggest expense on the foodservice side of your business, but are you seeing any tariff impacts that are specific to the foodservice.
Speaker Change: We should keep an eye on.
Speaker Change: We were primarily see it on the Canadian side and are working diligently with our supply chain as well as with our customers. So that we can.
Speaker Change: And Canada sources, maybe.
Speaker Change: Operational.
Speaker Change: Symbols food and other items.
Speaker Change: Locally in Canada to avoid tariffs and should that be.
Speaker Change: If we're unable to do that and making sure our customers understand that those costs are being passed through.
Speaker Change: Understood. That's very helpful. And then I really appreciate you going through your updated guidance the way that you did.
Speaker Change: Just still trying to get my head a little bit around.
Speaker Change: I know the guidance does not include the acquisition that's expected to close.
Speaker Change: Later, this year, but I'm, just trying to get a sense of.
Speaker Change: What macro factors that it does include would you consider this updated guidance the.
Speaker Change: Worst case scenario guidance optimistic guidance or maybe somewhere in the middle of how should we think about that.
Speaker Change: Great question.
Speaker Change: I would say that the current guidance.
Speaker Change: Most of the focus and actually implicit in your question is around.
Speaker Change: The conditions in Canada.
Speaker Change: In Australia the outlook.
Speaker Change: Right now it's fairly straightforward.
Speaker Change: Obviously subject to change, but most of the focus at least for us and I think for investors has been around in Canada.
Speaker Change: And so I would say current guidance for.
Speaker Change: It reflects I think reasonably conservative outlook.
Speaker Change: Hi.
Speaker Change: The business as a whole, but also for Canada, if I had to say, what's our downside case.
Speaker Change: We'd probably lowered the lower end by $5 million.
Speaker Change: 70.
Speaker Change: But that would be a further rather significant deterioration specifically in Canada.
Speaker Change: That's great. Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: I have a follow up question from Stephen <unk> of Stifel. Please go ahead.
Speaker Change: Thanks.
Speaker Change: Yeah. So one of the things I just wanted to ask quickly.
Speaker Change: When we think about the revised guidance I actually had two questions. One is is there any change in sort of how we should think about the.
Speaker Change: The quarterly cadence of that.
Speaker Change: Of that guide and then maybe as part of that in in past periods. When there has been sort of sloppiness in commodity prices has that generally lead to more or less turnaround activity like that.
Speaker Change: The customers, who have take advantage of that.
Speaker Change: To do the work or is it more of a cash flow issue. So they're more reluctant to do more turnaround work.
Speaker Change: So I'll answer the first part and ask Colin to comment on the second part so on the first part in terms of.
Speaker Change: The seasonality of our EBITDA generation continue to believe that.
Speaker Change: Second and third quarters will be the strongest that'll be slightly offset by the fact that we'll have.
Speaker Change: The the Australian acquisition close.
Speaker Change: That will fully benefit the second half of the year, but generally speaking, we'll continue to see 60% plus or minus of the EBITDA generation in the middle half of the middle two quarters of the year and then in terms of turnaround activity relative to commodity prices I'll ask Colin to comps, yes. It's a good question Steven.
Colin: The arc, our customer base plans turnarounds multiple years out the advance rate and so there are certain scopes that have a two to three year cadence from certain scopes. There every year and then depending on what you are able to get that last year youre going to have some spillover in terms of what you have to get done this year. So it's really <unk>.
Colin: My sense is that it's historically really driven by the work that needs to be done based on the equipment and less so an opportunistic timing of <unk>.
Colin: Commodity prices I will supplement that by saying in either commodity price environment.
Colin: Speed is the name of the game because the longer turnaround last the last time, they are actually producing barrels so.
Colin: We've thought about it internally, but we've never actually observed.
Colin: Any sort of change in turnaround behavior strictly as it relates to commodity price to try to take advantage of the sloppiness, but.
Colin: And I would augment that by saying that.
Colin: With the.
Colin: Yeah.
Colin: That most of our customers are actually planning their operations around a much lower oil prices than even what we're experiencing right.
Colin: And so.
Colin: No.
Colin: Certainly the macroeconomic environment tariffs et cetera are impacting that thinking but.
Colin: Way before all this happened they were planning on a much lower client are preparing operated as if there are much lower commodity price environment.
Colin: I understand.
Colin: That's helpful. And then just one other question I was just looking at our model and I think over the last four years and over the last six years Youre free cash flow has averaged.
Colin: About 70 million Bucks and recently, it's probably been a little bit lower than that but the guidance. You gave this year of 20 or 30 do you view that as a as an anomaly because of the market conditions and how would you sort of I know it's early to think about next year, but do you think next year or closer to that sort of $50 million to $60 million range.
Colin: Based on what you know now.
Colin: So there are a couple.
Colin: Things in there so let me divide up your question.
Colin: Ill ask Colin to jump in.
Colin: With color correct my mistakes, but.
Speaker Change: Over that six year time period biggest factor there are two or three big factors. One we're a cash taxpayer in Australia, which we weren't five years ago.
Speaker Change: I have been in 2024 and going and going forward.
Speaker Change: So that's a big change.
Speaker Change: Over that time period, particularly earlier in that time period, we had significant in.
Speaker Change: Benefit from LNG activity in Canada, which right now is coming to completion and are going to production that's impacting our Canadian operations.
Speaker Change: So three on a go forward basis, we paid cash taxes as we mentioned in our prepared comments. We do have some just timing of cash tax payments in Australia, which are hurting 2025 cash flow Shouldnt quote unquote normalize on a go forward basis and be more normalized.
Speaker Change: Where do we think.
Speaker Change: Operating cash flow.
Speaker Change: And move.
Speaker Change: It should improve on a go forward basis, yes.
Speaker Change: Yeah, rather know that I'll, just supplement that with you kind of have to think about it with or without the acquisition all of our guidance has been without the acquisition.
Speaker Change: But we do remain confident that we will close that in Australia, so that that cash flow could be layered it layered in in the future years again, we're not including that any of our guidance for 2025, but remain confident we'll close that relatively shortly.
Speaker Change: And then the third part about it is just going to be.
Speaker Change: Focus by the team right.
Speaker Change: Sure.
We always to look at expenses and sharpen our pencils, but maybe more so in the future on items like Capex and maintenance Capex in discrete.
Speaker Change: Things that are flowing through the capital line so.
Speaker Change: Speaking personally I remain optimistic yes.
Speaker Change: 30 feels feels love when you normalize for cash taxes in some of those other items that we can start approaching.
Speaker Change: Some of the numbers you quoted in the outer years.
Speaker Change: Great. Thank you both.
Speaker Change: Thanks, Steve.
Speaker Change: At this time there are no further questions and I would like to turn the floor back over to Bradley Dodson for any closing remarks.
Bradley Dodson: Thank you.
Bradley Dodson: And thank you everyone for joining us today on the call. We appreciate your interest in <unk>. We look forward to speaking with you on our second quarter earnings call expected in July.
Bradley Dodson: This.
Bradley Dodson: Please today's teleconference. Thank you for joining US you may now disconnect your lines.
Bradley Dodson: Yes.
Bradley Dodson: Yes.
Bradley Dodson: [music].
Bradley Dodson: Okay.
Bradley Dodson: Okay.
Bradley Dodson: [music].