Civeo Corporation Reports Mixed Q3 Results, Decline in Profitability Amid Canadian Market Challenges

Civeo Corporation reported its financial results for the third quarter and nine months ended September 30, 2024, revealing a decline in profitability and mixed revenue performance across its segments. For the three months ended September 30, 2024, Civeo generated revenues of $176.3 million, a decrease of 4% from $183.6 million in the same period of 2023. In contrast, revenues for the nine months ended September 30, 2024, were slightly up at $531.2 million compared to $530.0 million in 2023.

The company experienced a net loss of $5.3 million for Q3 2024, translating to a loss of $0.36 per diluted share, compared to a net income of $9.0 million, or $0.61 per diluted share, in Q3 2023. For the nine-month period, Civeo reported a net loss of $2.0 million, down from a net income of $7.1 million in the prior year. The decline in profitability was attributed to reduced mobile asset activity in Canada, lower occupancy in oil sands lodges, and the impact of the McClelland Lake Lodge sale.

Segment performance varied significantly, with Canadian revenues falling sharply to $57.7 million in Q3 2024, down 39% from $95.1 million in Q3 2023. This decline was primarily due to decreased mobile asset activity and lower occupancy levels. Conversely, the Australian segment saw a 33% increase in revenues to $116.6 million, driven by higher accommodation and food service revenues.

Operating income for Q3 2024 was nearly flat at $44,000, a stark contrast to the $16.0 million reported in Q3 2023. The company’s total costs and expenses increased to $176.3 million, up 6% from the previous year, reflecting higher costs associated with increased occupancy in Australia and new business in integrated services.

Civeo's balance sheet showed a decrease in total assets to $477.6 million as of September 30, 2024, down from $548.1 million at the end of 2023. Long-term debt was reduced to $50.1 million, down from $65.6 million, while cash and cash equivalents increased significantly to $17.9 million from $3.3 million.

In terms of strategic developments, Civeo's Board authorized a share repurchase program for up to 5% of total common shares, with repurchases totaling approximately $14.2 million in Q3 2024. The company also recognized pre-tax impairment charges of $7.8 million related to long-lived assets during the nine months ended September 30, 2024.

Overall, Civeo's financial results reflect challenges in the Canadian market, offset by growth in Australia, alongside ongoing strategic adjustments to enhance liquidity and shareholder value.