Jason Bandel

Jason Bandel asked about the implications of the tightened OES guidance and lower utilization for the market, inquiring if it signals weakening customer demand. He also sought a macro outlook for Bristow's main OES markets and regions, and clarification on the materially higher vendor credits this quarter.

Answer

Chris Bradshaw (CEO) explained that the tightened OES guidance was due to persistent supply chain challenges impacting aircraft availability (leading to lost revenue or contractual penalties) and fewer aircraft on contract in the North Sea and U.S. He provided a regional outlook, noting growth in Brazil, Africa, and the Caribbean, stability in the U.S. Gulf (with less ad hoc work), and a softer North Sea. Jennifer Whalen (CFO) clarified that vendor credits are common practice (tied to asset purchases, OEM performance, maintenance contracts) and were higher this quarter due to increased activity, expecting this trend to continue.

Jason Bandel asked about the implications of lower OES utilization and tightened forward guidance on the market, inquiring if it signals weakening customer demand. He also sought a macro outlook for main OES markets and regions, considering seasonality, and clarification on why vendor credits were materially higher this quarter and if they are typically included in guidance.

Answer

CEO Chris Bradshaw explained that the tightened guidance range, impacting the midpoint by about 2%, was due to persistent supply chain challenges affecting aircraft availability (leading to lost revenue or contractual penalties) and fewer aircraft on contract in the North Sea and US. He maintained a positive outlook for OES activity and highlighted the company's projected 27% adjusted EBITDA growth. Bradshaw detailed regional outlooks, noting strong growth in Brazil, Africa, and the Caribbean, stability in the US, and softer activity in the North Sea. CFO Jennifer Whalen clarified that higher vendor credits, common in the industry for reasons like asset purchases or OEM performance, were due to increased activity and are expected to remain heightened.

Jason Bandel of Evercore ISI questioned the confidence behind Bristow's raised 2025 and 2026 guidance amid macro headwinds, asked about any changes in production-oriented customer behavior due to oil price volatility, and inquired how much of the anticipated 2026-2027 drilling activity increase is factored into the 2026 outlook.

Answer

SVP & CFO Jennifer Whalen attributed the guidance increase to better visibility into costs and customer activity. President & CEO Chris Bradshaw added that customer demand remains strong, with the main challenge being supply chain constraints, not a lack of urgency from clients. He confirmed that the 2026 guidance includes an expectation for increased activity in the latter half of the year, supported by new AW189 helicopter orders.

Jason Bandel of Evercore inquired about the strong performance and constructive outlook for the Offshore Energy Services (OES) segment, asking for details on the dynamics driving high utilization and the key global markets contributing to the 2025 growth forecast. He also asked for management's perspective on the company's stock trading at a discount to its calculated Net Asset Value (NAV).

Answer

President and CEO Chris Bradshaw explained that high utilization is driven by a tight supply-demand dynamic, resulting from a decade of low new helicopter deliveries and long lead times for new aircraft. He highlighted West Africa (Nigeria), Brazil, and the Caribbean (Suriname) as key growth markets for OES. Regarding the NAV, Bradshaw confirmed the third-party appraisal resulted in a value of approximately $57 per share and attributed the stock's discount to market speculation, while expressing confidence in the company's value.

Jason Bandel of Evercore ISI asked new CFO Mike Mancini for his initial impressions of the company, inquired about the performance consistency of the PX G across test sites, questioned the deployment strategy for remaining sites, and sought clarity on the drivers of strong OpEx control in Q3.

Answer

CFO Mike Mancini highlighted the significant opportunities he sees for efficiency, growth, and capital allocation. President and CEO David Moon explained that PX G performance was consistent in delivering energy savings and capacity increases, with variations based on location. He added that a site selection tool is used to optimize deployment. Mancini attributed the OpEx beat to cost avoidance in non-core areas and noted most of the year's one-time costs have been incurred.