Business context and reporting period
SEACOR Marine Holdings Inc. filed this unaudited Form 10-Q for the three months ended March 31, 2021. The company provides offshore marine transportation and support services to energy and other customers. At quarter-end, it and its joint ventures operated 96 vessels. Results remain exposed to offshore activity, vessel utilization and day rates, oil and gas market conditions, and COVID-19 impacts.
Financial performance and position
Amounts below are in millions of U.S. dollars unless noted.
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Operating revenue | $36.5 | $35.7 |
| Operating loss | $(16.6) | $(23.7) |
| Loss from continuing operations | $(16.9) | $(17.9) |
| Net income (loss), including discontinued operations | $6.0 | $(20.0) |
| Net income (loss) attributable to SEACOR Marine | $6.0 | $(15.9) |
| Continuing operating cash flow | $(3.4) | $(11.1) |
- Revenue increased 2.4%. Average time-charter rate rose to $11,323 per day from $10,886, while fleet utilization declined to 55% from 57%.
- Direct vessel profit, a company-defined non-GAAP measure, was $10.2 million, or about 28% of revenue, versus $14.9 million, or about 42%, a year earlier. Higher operating costs—especially personnel, insurance and drydocking—offset revenue growth.
- Reported Q1 2021 net income included $22.9 million of discontinued-operations income, principally a $22.8 million gain on the sale of Windcat Workboats. Continuing operations remained loss-making.
- Cash, cash equivalents and restricted cash were $71.8 million at March 31, including $4.2 million of construction reserve funds. Cash and cash equivalents alone were $68.4 million.
- Debt principal was $513.6 million; reported debt carrying value, net of discount and issuance costs, was $466.7 million. The company reported compliance with debt covenants. Contractual principal maturities include $243.7 million in 2023 and $134.5 million in 2024.
- Total assets were $973.8 million and total equity was $409.2 million. No impairment was recorded in Q1 2021; Q1 2020 included $9.2 million of vessel impairment charges.
Material changes versus the prior comparable period
- Revenue increased modestly, but utilization and direct vessel profit declined. Regional results varied: Latin America revenue increased with fleet additions, while Africa and Europe revenue and profit fell, partly reflecting cold-stacking and vessel repositioning.
- Operating loss improved by $7.2 million, mainly because prior-year results included larger asset disposition and impairment losses. Interest expense increased to $8.0 million from $7.4 million, while derivative gains fell to $0.4 million from $5.1 million.
- Continuing operating cash use narrowed by $7.8 million. Q1 2021 cash flows included $12.1 million of net income-tax refunds; investing cash inflows included $38.7 million of net Windcat sale proceeds. The company made $8.3 million of debt payments.
- Windcat Workboats was sold on January 12, 2021, for net proceeds of approximately $38.7 million in the cash flow statement; the buyer also assumed approximately £20.4 million of Windcat debt. The divestiture reduced the fleet and changed segment presentation.
Outlook, risks, contingencies and unusual items
- Management said available cash, operating cash flows, financing access and asset-sale proceeds, together with tax refunds, should provide sufficient liquidity for the foreseeable future. It cautioned that prolonged weak offshore demand, excess vessel supply, customer payment delays or further COVID-19 impacts could pressure results and liquidity. The primary credit facility requires at least $35 million of cash, including restricted cash; reported covenant cash was $71.8 million.
- The company received $12.5 million of CARES Act-related tax refunds by March 31 and reported receipt of the remaining $19.8 million in April 2021. Q1 operating cash flow therefore should be considered alongside tax-refund timing.
- As of March 31, unfunded capital commitments were $10.1 million, of which $9.2 million was payable during the remainder of 2021; a further $9.5 million of orders for an FSV had been indefinitely deferred.
- Major subsequent event: On April 13, 2021, the liftboat SEACOR Power capsized off Louisiana with 19 people aboard. Several crew members died and others remained missing as of the filing; the vessel was a constructive total loss. Salvage, investigations and civil lawsuits were ongoing. The company said costs, liabilities, insurance recoveries, reputational effects and business impacts were uncertain and could be material; outcomes could include fines, penalties or operating restrictions.
- A Brazilian tax-deficiency dispute had a stated potential levy of R$18.35 million (about $3.2 million at the stated exchange rate); the company was pursuing administrative proceedings and success was not assured. The filing provides no clear estimate of the SEACOR Power incident’s ultimate financial exposure.
- Management cited no specific earnings or utilization guidance. It noted that any market recovery remained uncertain and that vessel reactivation could increase drydocking, staffing and maintenance costs. Sixteen of 61 owned or leased-in vessels were cold-stacked at quarter-end.
Most important facts for investors to verify
- Developments in the SEACOR Power investigation, lawsuits, salvage costs, insurance coverage and any related regulatory actions or operating restrictions.
- Whether liquidity and covenant headroom remain adequate as debt maturities approach, particularly the large 2023 and 2024 principal amounts.
- Whether utilization, day rates and direct vessel profit improve, and how cold-stacked vessels and vessel-supply conditions affect margins and reactivation spending.
- Cash-flow quality and use of one-time proceeds: distinguish recurring operating performance from the Windcat gain, sale proceeds and CARES Act tax refunds.