Shearwater GeoServices (SHEARWATER) Q4 2024 earnings summary

Executive summary

• Q4 2024 saw decreased streamer and marine seismic acquisition activity, leading to lower EBITDA, but major OBN campaigns were completed in India and new projects began in West Africa and Brazil.

• Multi-Client segment expanded with the second phase of the Pelotas Basin survey in Brazil, showing strong client interest.

• Year-end backlog reached USD 337 million, reflecting strong tendering and awards, though reduced from the previous year due to the expiration of a major capacity agreement.

• The business remains resilient with a diversified capital structure and a fully invested operational platform ready for increased activity in 2025.

• Operational challenges in Brazil (permit delays) and India (tender withdrawal) led to low vessel utilization and higher costs from keeping vessels warm.

Financial highlights

• Q4 2024 revenue was USD 104 million (down from USD 179 million in Q4 2023); full-year revenue was USD 620 million (down from USD 922 million in 2023).

• Q4 EBITDA was USD 13.2 million (margin 13%), with full-year EBITDA at USD 145–159 million; Marine Acquisition contributed 79% of Q4 revenue.

• Net loss for Q4 2024 was USD 39 million; full-year net loss was USD 53 million.

• Q4 negative free cash flow of USD 26 million, mainly due to working capital build-up; year-end cash position was USD 49 million, with free liquidity of USD 84 million including undrawn credit.

• Net interest-bearing debt at year-end 2024 was USD 554 million; equity ratio was 42%.

Outlook and guidance

• Acquisition activity and fleet utilization are expected to rebound in Q1 2025, with backlog at USD 333 million at the start of the year.

• Tender activity remains strong, but visibility for the second half of 2025 is limited due to client caution.

• OBN market remains competitive with margin pressure; focus remains on profitability over market share.

• Multi-Client investments for 2025 expected to be similar or slightly higher than 2024's USD 20 million; maintenance CapEx to average USD 25 million.

• No specific financial targets or guidance for 2025, but Q1 utilization expected to reach 80%.