Hornbeck Offshore announces fourth quarter and year end resultsNews // March 4, 2005
Fourth quarter revenues increased 29.5 per cent to US$37.8 million compared to US$29.2 million for the fourth quarter of 2003. The US$8.6 million increase was primarily driven by improved OSV market conditions in the US Gulf of Mexico and continued tightening in the supply of single-hulled equipment in the northeast U.S. as a result of fourth quarter retirements mandated by the Oil Pollution Act of 1990 (OPA 90).
Operating income was US$10.2 million, or 27.0 per cent of revenues, for the fourth quarter of 2004 compared to US$8.4 million, or 28.8 per cent of revenues, for the same quarter in 2003. Higher day rates and utilization in both segments contributed to anincrease in EBITDA to US$16.7 million, or 22.8 per cent over the fourth quarter of 2003, and near the high-end of the company's upwardly revised guidance range of US$15.5 to US$17.0 million for the fourth quarter of 2004.
The company recorded a US$10.1 million loss, or US$0.48 loss per share, in thefourth quarter 2004 which included a US$22.4 million (US$14.7 million after-tax)charge for the early extinguishment of debt.
Todd Hornbeck, the company's President and CEO, said: "We are very pleased that we were able to continue the trend of exceeding our own expectations in all key performance measures in our first year as a publicly traded company. A major contributor to this success was our ability to move our utilization-adjusted, or effective, OSV day rate up nearly 50 per cent since the market trough in April 2004."
"Since May 2004, oil companies have increased their emphasis on replacingreserves through the drill bit and are devoting significant capital todeepwater, ultra-deepwater and deep-shelf oilfield projects. In the fourthquarter, our OSV segment continued to capitalize on this market recovery as wemaintained near full utilization while further increasing fleet averageday rates by roughly US$800 over the third quarter. We were also pleased withthe performance of our tug and tank barge segment, which finished the yearstronger than expected due to improving supply-demand fundamentals related toOPA 90."
Revenues from the OSV segment were US$22.2 million for the fourth quarter of 2004, an increase of 28.3 per cent from US$17.3 million for the same period in 2003. The net increase in segment revenues is due to the quarter-over-quarter increase in average day rates and utilization rates. Hornbeck'sutilization rate was 94.3 per cent for the three months ended December 31, 2004, which was higher than the 85.5 per cent achieved for the same period of 2003.
The average OSV day rate in the fourth quarter of 2004 was $10,926 compared to US$9,769 for the same period of 2003. On a sequential basis, fourth quarter 2004 average fleet utilization increased slightly from 93.2 per cent, while average day rates improved 8.2 per cent, or US$830 per day, over the third quarter of 2004.
Slightly offsetting the improved market conditions was an increase in segment costs stemming primarily from discretionary vessel maintenance, higher insurancecosts and higher than expected general and administrative (G&A) expenses. Thenet result was a modest improvement in sequential quarterly operating incometo US$7.8 million from US$7.7 million.