Constellation Oil Services (COSH) Q1 2025 earnings summary

Executive summary

• Achieved $44 million adjusted EBITDA in Q1 2025 with a 36% margin and 97% fleet uptime, reflecting strong operational performance and cost control.

• Net revenue declined 15.4% year-over-year to $121.7 million, mainly due to contract transitions and BRL depreciation.

• Contract backlog surged 60.8% year-over-year to $2.1 billion, with over $1.3 billion in new contracts/extensions since June 2024, ensuring high fleet utilization through 2025.

• Major recapitalization and corporate restructuring completed in December 2024, strengthening the balance sheet.

• Fleet uptime improved to 97% from 94% year-over-year, maintaining top operational performance in Petrobras' rankings.

Financial highlights

• Net operating revenue for Q1 2025 was $121.7 million, down from $143.9 million in Q1 2024.

• Adjusted EBITDA was $43.6 million (35.9% margin), down from $52.1 million (36.2% margin) in Q1 2024.

• Net loss widened to $23.6 million from $2.3 million in Q1 2024, driven by lower EBITDA, higher depreciation, and increased tax expenses.

• Net debt increased to $477 million as of March 31, 2025; cash and equivalents stable at $181.4 million.

• CAPEX increased to $46 million, mainly for Alpha Star's contract transition.

Outlook and guidance

• 2025 adjusted EBITDA guidance raised by $10 million to $170–$190 million, reflecting recent contract extensions and improved fleet utilization.

• FY 2025 revenue guidance: $550–570 million; capex for 2025 expected at ~$150 million.

• Backlog of $2.1 billion provides strong revenue visibility through 2029.

• Proactive cost management and FX hedging (BRL 532 million) implemented to secure margins and cost predictability.

• Deepwater and offshore shelf investments forecast to increase by 3% in 2025, supporting stable demand.