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GulfMark Offshore, Inc. Q2 2010 Earnings Call Transcript

So, Quintin, why don’t you run through the financials experience in the last three months please?

Quintin Kneen

Thank you, David. As always, Bruce and I will speak for about 15 minutes and then we will open it up for questions. A good quarter; on a sequential quarter basis, revenue was up 10% and operating income was up 108%. Nice sequential movements and, admittedly, those percentages are probably results of the prior quarter, but it’s the first sequential quarter that we have seen combined consolidated revenue and operating income growth since September 2008.

Revenue and utilization were up in all three operating regions. The situation in the Americas is unique due to the spill response activities and the deepwater drilling moratorium. Nonetheless, on a sequential quarter basis, total revenue and utilization increased meaningful. Revenue was up 15%, or $5.2 million, average day rate was up slightly, and utilization was up 12 percentage points to 92%.

Although the same sequential quarterly trends were evident in the Gulf of Mexico, monthly data in the Gulf of Mexico shows utilization slipping slightly in the month of June. It’s difficult to predict how the Gulf of Mexico will fare over the remainder of 2010. Absent the events in the Gulf of Mexico, we were anticipating some softness during the hurricane season, but it’s difficult to tell if the slippage in June is indicative of that influence or other factors related to the drilling moratorium.

Revenue in the North Sea was also up. On a sequential quarter basis, revenue was up 6%, or $1.9 million, and utilization was up, although, slightly.

Southeast Asia increased revenue by approximately $1 million over the prior quarter. The increase in Southeast Asia was driven primarily by utilization increases. Day rate continues to slip in Southeast Asia, and they were down 7% sequentially, but as we have indicated in the past, the cyclical activity in Southeast Asia is not as strong as it is in the Gulf of Mexico or the North Sea, and our outlook for Southeast Asia is for quarterly revenue to continue to increase throughout the remainder of 2010, driven consequently by increases in utilization. And although we expect the average day rate in Southeast Asia to be sequentially lower, Southeast Asia still has the highest average day rate of any of our operating regions.

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