Civeo Corporation Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Share Repurchase: Civeo repurchased approximately 1 million common shares during the quarter, bringing year-to-date return of capital to shareholders to $52 million. 69% of the expanded share repurchase authorization is completed as of September 30, 2025.
• Australia: Integrated services business is growing, aiming for AUD 500 million of revenue by 2027. Owned villages occupancy remains strong, but may soften in Q4 2025 due to seasonality and met coal pricing. Completed integration of 4 acquired villages in Bowen Basin.
• Canada: Cost-cutting measures bear fruit, with direct field-level costs down 29% y-o-y, indirect operating overhead costs down 23% y-o-y, and gross profit up 35% y-o-y. Focus now on putting mobile camp assets to work in support of Canadian infrastructure projects.

Segment Performance

• Australia: Third quarter revenues were $124.5 million, up 7% from $116.6 million in Q3 2024. Adjusted EBITDA was $26.7 million, up 19% from $22.5 million in Q3 2024. Driven by the recently completed acquisition of 4 owned villages. Billed rooms in Australian-owned villages were 763,000, up 18% y-o-y. Daily room rate in U.S. dollars was $77, down from $79 in Q3 2024 due to weak Australian dollar.
• Canada: Revenues were $46 million, down from $57.7 million in Q3 2024. Adjusted EBITDA for the segment was $8 million, up from $3.4 million in Q3 2024. Billed rooms in Canadian lodges totaled 383,000, down from 484,000 in Q3 2024. Daily room rate in U.S. dollars was $100, flat with Q3 2024. Cost-cutting measures contributed to EBITDA growth.

Guidance

• 2025: Tightened revenue guidance to $640 million to $655 million and adjusted EBITDA guidance to $86 million to $91 million. Maintained capital expenditure guidance at $20 million to $25 million.
• 2026 Outlook: Australia may have modest softness in owned village occupancy due to commodity price volatility and customer layoffs, but integrated services expected to show top-line growth. Canada lodge occupancy stabilizing, with mobile camp opportunities dependent on customer final investment decisions, likely contributing in 2026 second half and 2027.

Risks

• Macro factors: Weak met coal pricing and demand impacting Australia's owned villages occupancy.
• Canada: Oil price and macroeconomic headwinds affecting lodge occupancy.
• Labor challenges: Chef and general labor shortages in Australia impacting integrated services growth.

Question and Answer

• Q: Stephen Gengaro asks if 2026 is flattish year-over-year.

A: Bradley Dodson says it will be up year-over-year, with Australia having strong contract positions and integrated services growth, and Canada lodge occupancy stabilizing.

• Q: Steve Ferazani inquires about mobile camp timing.

A: Bradley Dodson states it depends on customer final investment decisions, likely 2026 second half and 2027, with 2027 looking like a good year for mobile camp utilization.

• Q: David Storms asks about cost-cutting applicability to Australia.

A: Bradley Dodson says cost-cutting in Canada is more specific to Canada, with different cost structures in Australia.

• Q: David Storms asks about further Canada cost-cutting.

A: Bradley Dodson says cost-cutting continues, but easier measures are done, with focus on growing revenue in Canada