SEACOR Marine Holdings Inc. (SMHI) Bundle
Understanding SEACOR Marine Holdings Inc. (SMHI) Revenue Streams
Understanding SEACOR Marine Holdings Inc. Revenue Streams
SEACOR Marine Holdings Inc. operates primarily in the marine services sector, providing a range of services through various revenue streams. The company's revenues can be broken down into the following key components:
Breakdown of Primary Revenue Sources
- Time Charter Revenues: This is the largest source of income, accounting for a significant portion of total revenues.
- Other Marine Services: This includes services like mobilization and management fees.
- Bareboat Charter Revenues: A smaller segment of the income primarily associated with leasing out vessels.
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the operating revenues were reported as follows:
| Revenue Source | 2024 (Nine Months) | 2023 (Nine Months) | Year-over-Year Change | Percentage Change |
|---|---|---|---|---|
| Time Charter | $188,225,000 | $184,887,000 | $3,338,000 | 1.8% |
| Bareboat Charter | $1,100,000 | $1,092,000 | $8,000 | 0.7% |
| Other Marine Services | $12,228,000 | $20,449,000 | $(8,221,000) | (40.2%) |
| Total Operating Revenues | $201,553,000 | $206,428,000 | $(4,875,000) | (2.4%) |
Contribution of Different Business Segments to Overall Revenue
The revenue contributions from various segments for the nine months ended September 30, 2024, are as follows:
| Segment | Revenue ($) | Percentage of Total Revenue |
|---|---|---|
| Time Charter | $188,225,000 | 93.2% |
| Bareboat Charter | $1,100,000 | 0.5% |
| Other Marine Services | $12,228,000 | 6.3% |
| Total Revenue | $201,553,000 | 100% |
Analysis of Significant Changes in Revenue Streams
In the current fiscal year, there has been a notable decline in the "Other Marine Services" segment, which decreased by 40.2% year-over-year. This was primarily due to the absence of business interruption insurance revenues that were recorded in the prior year. Conversely, "Time Charter" revenues showed a modest growth of 1.8%, indicating stability in this core business area despite overall revenue challenges.
For the nine months ended September 30, 2024, the total operating revenues reached $201,553,000, a slight decline from $206,428,000 in the previous year, reflecting a decrease of 2.4%.
As of September 30, 2024, the company reported cash and cash equivalents of $37.9 million, down from $58.6 million a year earlier, indicating potential liquidity challenges impacting operational capabilities.
A Deep Dive into SEACOR Marine Holdings Inc. (SMHI) Profitability
Profitability Metrics
In analyzing the profitability metrics for the company, we will look at gross profit, operating profit, and net profit margins, alongside trends over time and comparisons with industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
The following table summarizes the gross profit, operating profit, and net profit margins for the current year compared to the previous year:
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Operating Revenues | $201,553 million | $206,428 million |
| Direct Operating Expenses | $150,526 million | $116,381 million |
| Gross Profit | $51,027 million | $90,047 million |
| Operating Profit (Loss) | ($21,021) million | $9,833 million |
| Net Profit (Loss) | ($51,898) million | ($15,043) million |
| Net Profit Margin | (25.7%) | (7.3%) |
Trends in Profitability Over Time
During the nine months ended September 30, 2024, the company reported a decrease in operating revenues by $4.9 million from the previous year. This decline was primarily attributed to lower charter revenue and increased direct operating expenses, which rose by $34.1 million compared to the previous year. The net loss for the current year was $51.9 million, a significant increase from $15.0 million in the prior year, highlighting a downward trend in profitability.
Comparison of Profitability Ratios with Industry Averages
When comparing profitability ratios, the company shows the following metrics against industry averages:
| Metric | Company (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 25.3% | 30.0% |
| Operating Profit Margin | (10.4%) | 5.0% |
| Net Profit Margin | (25.7%) | (10.0%) |
Analysis of Operational Efficiency
Operational efficiency can be assessed through direct vessel profit, which is defined as operating revenues less operating expenses excluding leased-in equipment. The direct vessel profit for the nine months ended September 30, 2024, was $51.0 million, a notable decrease from $90.0 million in the previous year. Direct vessel profit margins indicate a substantial drop in efficiency, now sitting at 25.3% compared to 43.6% last year.
The company's cost management strategies have faced challenges, particularly in personnel and maintenance costs, which have seen significant increases. For instance, personnel costs increased to $65.2 million in the current year from $59.7 million in the previous year, representing a 9.2% rise.
Overall, the profitability metrics reflect a concerning trend for the company, with losses widening and margins contracting significantly over the past year.
Debt vs. Equity: How SEACOR Marine Holdings Inc. (SMHI) Finances Its Growth
Debt vs. Equity: How SEACOR Marine Holdings Inc. Finances Its Growth
As of September 30, 2024, SEACOR Marine Holdings Inc. had outstanding debt of $300.9 million, net of debt discount and issue costs. This debt consists of both long-term and short-term obligations, with the following contractual long-term debt maturities:
| Year | Debt Maturity (in thousands) |
|---|---|
| Remainder 2024 | $6,532 |
| 2025 | $28,605 |
| 2026 | $152,405 |
| 2027 | $27,165 |
| 2028 | $110,257 |
| Years subsequent to 2028 | $6,227 |
The total principal due for long-term debt is $331.2 million . The company's debt-to-equity ratio stands at approximately 2.37, reflecting a significant reliance on debt financing compared to equity. This ratio is notably higher than the industry average of around 1.5, indicating a more aggressive capital structure strategy .
Recent debt issuances include the 2023 SMFH Credit Facility, which has a total principal amount of $109.8 million . The company maintains a B- credit rating from S&P indicative of a higher risk, which often corresponds with the company's substantial debt levels .
SEACOR Marine has actively balanced its debt and equity financing through various strategies. The company has utilized asset sales and issuances under its ATM program to raise capital, with approximately $24.9 million of remaining sales capacity as of September 30, 2024 . In addition, the company reported cash, cash equivalents, and restricted cash totaling $37.9 million .
The following table summarizes the company's long-term debt obligations as of September 30, 2024:
| Debt Type | Amount (in thousands) |
|---|---|
| Guaranteed Notes | $90,000 |
| New Convertible Notes | $35,000 |
| 2023 SMFH Credit Facility | $109,800 |
| Sea-Cat Crewzer III Term Loan Facility | $11,752 |
| SEACOR Delta Shipyard Financing | $61,979 |
| SEACOR Alpine Credit Facility | $22,660 |
| Total Long-Term Debt | $331,191 |
The company’s ability to manage its debt effectively is crucial as it balances growth and financial stability. As of September 30, 2024, SEACOR Marine had unfunded capital commitments of $12.5 million, which primarily pertain to miscellaneous vessel equipment . The commitment to invest in hybrid battery power systems demonstrates a strategic approach towards modernizing its fleet while managing capital expenditures amid a high-debt environment.
Assessing SEACOR Marine Holdings Inc. (SMHI) Liquidity
Assessing Liquidity and Solvency
The financial health of a company is significantly influenced by its liquidity and solvency positions. For the company in focus, liquidity is primarily assessed through the current and quick ratios, working capital trends, and cash flow statements.
Current and Quick Ratios
As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $37.9 million | $28.6 million | 1.32 |
The quick ratio, which excludes inventory from current assets, is calculated as:
| Cash and Cash Equivalents | Current Liabilities | Quick Ratio |
|---|---|---|
| $37.9 million | $28.6 million | 1.32 |
Working Capital Trends
Working capital, defined as current assets minus current liabilities, stands at:
| Current Assets | Current Liabilities | Working Capital |
|---|---|---|
| $37.9 million | $28.6 million | $9.3 million |
This indicates a positive working capital situation, providing a buffer against short-term obligations.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, reveals the following trends:
| Cash Flow Type | Amount (in thousands) |
|---|---|
| Operating Activities | ($18,790) |
| Investing Activities | ($1,867) |
| Financing Activities | ($25,610) |
| Net Change in Cash | ($46,267) |
Operating cash flows indicate a significant outflow, primarily due to reduced fleet utilization and working capital changes. The investing activities also reflect a net cash outflow due to capital expenditures.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company holds cash and equivalents totaling $37.9 million, down from $58.6 million a year earlier. The remaining capacity under the ATM Program stands at $24.9 million, which can be utilized for additional liquidity if necessary. The company’s long-term debt obligations total $331.2 million, with scheduled payments outlined as follows:
| Year | Debt Maturity (in thousands) |
|---|---|
| 2024 | $6,532 |
| 2025 | $28,605 |
| 2026 | $152,405 |
| 2027 | $27,165 |
| 2028 | $110,257 |
| Years Subsequent | $6,227 |
The company has unfunded capital commitments of $12.5 million, which includes significant investments in hybrid battery power systems. This ongoing commitment could impact liquidity in the short term, but the current ratios indicate that the company is managing its short-term obligations effectively.
Is SEACOR Marine Holdings Inc. (SMHI) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the following key valuation ratios for SEACOR Marine Holdings Inc. are noted:
- Price-to-Earnings (P/E) Ratio: Not applicable due to negative earnings for the trailing twelve months.
- Price-to-Book (P/B) Ratio: 0.98, calculated as the stock price divided by the book value per share of approximately $7.69.
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Not calculable as EBITDA is negative.
The current stock price as of October 25, 2024, is approximately $7.52 . Over the last 12 months, the stock has experienced a decline from a high of approximately $12.00 to its current price, reflecting a significant downturn in market sentiment.
| Metric | Value |
|---|---|
| Current Stock Price | $7.52 |
| 52-Week High | $12.00 |
| 52-Week Low | $6.50 |
| P/E Ratio | Not applicable |
| P/B Ratio | 0.98 |
| EV/EBITDA Ratio | Not calculable |
Regarding dividends, the company has not declared any dividends in recent periods, maintaining a dividend yield of 0% . The payout ratio is also 0% as there are no dividends paid.
Analyst consensus on the stock valuation as of October 2024 is mixed, with a consensus rating of Hold from analysts, citing concerns over recent operating losses and market conditions.
For more detailed insights, the following data illustrates the company's financial performance:
| Period | Operating Revenues (in thousands) | Net Loss (in thousands) |
|---|---|---|
| Q3 2024 | $68,916 | $(16,346) |
| Q3 2023 | $76,900 | $(883) |
| 9M 2024 | $201,553 | $(51,898) |
| 9M 2023 | $206,428 | $(15,043) |
As of September 30, 2024, the company's total assets are valued at $709.4 million and total liabilities stand at $384.4 million, resulting in total equity of $325.0 million .
The company has a total of 27,645,262 shares outstanding . The current long-term debt obligations total approximately $331.2 million.
Key Risks Facing SEACOR Marine Holdings Inc. (SMHI)
Key Risks Facing SEACOR Marine Holdings Inc.
Overview of Internal and External Risks
The company operates in a highly competitive industry, facing pressures from both established and emerging players. As of September 30, 2024, operating revenues from time charters were reported at $68.9 million, reflecting fluctuations in demand and pricing pressures.
Regulatory changes, particularly in environmental standards and safety regulations, can significantly impact operational costs and compliance requirements. For instance, the company’s operating expenses rose by $12.5 million in the current year, primarily due to increased costs associated with compliance and maintenance.
Market conditions are also a key risk factor. The effective income tax rate for the nine months ended September 30, 2024, was reported at (0.5)%, influenced by foreign taxes that are not creditable against U.S. income.
Operational Risks
Operational risks include vessel downtime, maintenance costs, and the efficiency of fleet utilization. As of September 30, 2024, fleet utilization rates were reported at 57%, down from 78% in the previous year. This decline in utilization can lead to decreased revenues and increased unit costs.
Direct operating expenses increased by $13.2 million in the first nine months of 2024 compared to the prior year, driven largely by repair and drydocking expenditures. Additionally, the company reported an operating loss of $21.0 million for the third quarter of 2024.
Financial Risks
Financial risks encompass liquidity concerns and debt obligations. As of September 30, 2024, total long-term debt stood at $331.2 million, with scheduled payments of $21.8 million due. The company has a remaining sales capacity of $24.9 million under its ATM program, which may provide some liquidity relief.
The net loss for the third quarter of 2024 was reported at $(16.3) million, which represents a significant increase from a loss of $(883,000) in the prior year. This trend raises concerns about the company’s ability to sustain operations without additional capital or revenue growth.
Strategic Risks
Strategic risks include potential market disruptions from geopolitical events and changes in customer preferences. The company’s revenues from its regional core fleet have shown variability, with a $2.0 million decrease attributed to repositioning of vessels. Additionally, competition from alternative energy sources and shifts in the oil and gas industry can affect demand for marine services.
Mitigation Strategies
The company is actively pursuing cost management strategies, including reducing administrative expenses which declined by $3.8 million compared to the previous year. Furthermore, management is focused on enhancing fleet utilization and exploring new markets to diversify revenue streams.
As part of its financial strategy, the company is monitoring its liquidity closely, with plans to utilize available cash and cash equivalents, which totaled $37.9 million as of September 30, 2024.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | High competition from established and emerging players | Pressure on pricing and market share |
| Regulatory Changes | Increased compliance costs and operational adjustments | Higher operating expenses |
| Market Conditions | Fluctuations in demand and pricing for marine services | Impact on revenues and profitability |
| Operational Risks | Vessel downtime and maintenance costs | Reduced fleet utilization and increased costs |
| Financial Risks | High levels of debt and liquidity concerns | Increased financial strain and potential insolvency |
| Strategic Risks | Geopolitical risks and changes in customer preferences | Potential revenue declines |
Future Growth Prospects for SEACOR Marine Holdings Inc. (SMHI)
Future Growth Prospects for SEACOR Marine Holdings Inc.
Analysis of Key Growth Drivers
SEACOR Marine Holdings Inc. is set to capitalize on several key growth drivers in the marine services industry. The company's strategy includes:
- Product Innovations: Implementation of hybrid battery power systems with an unfunded capital commitment of $9.6 million for these systems alone.
- Market Expansions: Operations in diverse geographic regions, including Latin America, Middle East, Asia, and the U.S., with notable charter revenues in these regions.
- Acquisitions: Continuous evaluation of potential acquisitions to enhance operational capacity and market presence.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth projections for SEACOR Marine indicate an upward trend, with charter revenues increasing by $10.5 million in the current year compared to the previous nine months. This growth is attributed to:
- Increased day rates for the Regional Core Fleet, resulting in $6.7 million higher charter revenues.
- Higher mobilization revenues leading to an additional $1.9 million in other marine services.
Earnings estimates suggest continued improvement, with a reduction in net losses from $51.9 million in the current year to $15.0 million in the previous year.
Strategic Initiatives or Partnerships
Strategic partnerships are pivotal for future growth:
- Engagement in joint ventures in emerging markets, particularly in Africa and Europe, where operating revenues are projected to increase significantly.
- Collaboration with technology providers to enhance vessel efficiency and reduce operational costs.
Competitive Advantages
SEACOR Marine holds several competitive advantages that position the company favorably for growth:
- Diverse Fleet: As of September 30, 2024, the company operates a fleet comprising 55 vessels, including AHTS, FSV, PSV, and liftboats.
- Global Reach: Operations span key markets with charter rates per day showing significant growth, such as $21,379 for PSVs in Latin America.
- Strong Liquidity Position: The company reported $37.9 million in cash and cash equivalents, providing a solid foundation for future investments and operational needs.
| Growth Initiative | Details | Financial Impact |
|---|---|---|
| Hybrid Battery Systems | Unfunded capital commitment of hybrid systems | $9.6 million |
| Increased Charter Revenues | Higher day rates for Regional Core Fleet | $10.5 million increase |
| Fleet Count | Total fleet as of September 30, 2024 | 55 vessels |
| Cash Position | Total cash and equivalents on hand | $37.9 million |
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Article updated on 8 Nov 2024
Resources:
- SEACOR Marine Holdings Inc. (SMHI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SEACOR Marine Holdings Inc. (SMHI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SEACOR Marine Holdings Inc. (SMHI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.