Shearwater GeoServices (SHEARWATER) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw increased activity, especially with North Sea and Canada operations starting up and a major Ocean Bottom Node (OBN) survey in India, confirming the competitiveness of proprietary technology.

• The company completed its second carbon capture survey off the UK and signed a seismic R&D collaboration with Petrobras.

• CEO notes a positive EBITDA trend despite a slower-than-expected marine seismic market, with a strong project pipeline for winter and ongoing multi-client and technology initiatives.

Financial highlights

• Q2 2024 revenue was $214.2M, down 9.7% from $237.3M in Q2 2023, mainly due to lower vessel utilization but offset by improved project pricing.

• EBITDA rose to $80.1M (37% margin) from $65.8M (28%) year-over-year, reflecting better pricing.

• EBIT increased to $45.8M from $36.4M in Q2 2023.

• Net income before taxes was $26.8M, with net profit at $24.7M, both up from the prior year.

• Cash flow from operations was $20.8M, down from $71.2M in Q2 2023, due to increased working capital needs.

Outlook and guidance

• Activity is expected to increase into Q3 with seasonal North Sea demand, but project timing remains uncertain due to permit and process delays.

• The OBN market is competitive, with selective bidding focused on profitability; backlog for this segment is strong into 2025.

• Growing demand for multi-client contract models and energy transition projects (CCS, offshore wind) is anticipated.

• The project pipeline for winter is stronger than last year, indicating rising client demand.