Civeo Corporation has unveiled its first-quarter 2025 financial results, highlighting strategic moves to address market volatility in its primary operational regions of Canada and Australia. The company reported consolidated revenue of $144.0 million, which fell short of initial estimates, primarily driven by challenges in the Canadian market segment.
The Canadian operations experienced significant headwinds, with revenues declining 40% year-over-year to $40.4 million. This downturn reflects reduced customer spending in the oil sands region and the loss of occupancy following the sale of McClelland Lake Lodge. In response, Civeo implemented aggressive cost-reduction strategies, including a 25% reduction in Canadian workforce and the cold-shuttering of two lodges.
Conversely, the Australian segment demonstrated robust performance, posting a 13% year-over-year revenue growth to $103.6 million. The company's strategic expansion continued with the acquisition of four villages in the Bowen Basin, a move expected to add approximately $32.0 million in revenue and $17.0 million in EBITDA.
The recent acquisition establishes Civeo's presence in the Blackwater region of Australia and provides significant contract coverage with met coal producers through take-or-pay contracts. This expansion comes at a critical time when the company seeks to diversify its operational portfolio and mitigate risks associated with market fluctuations.
In light of these developments, Civeo has revised its full-year 2025 guidance. The company now projects revenue between $640 million and $670 million, with adjusted EBITDA ranging from $86 million to $96 million. Capital expenditure guidance remains consistent at $20 million to $25 million, underscoring the company's commitment to disciplined financial management.
The financial results and strategic actions indicate Civeo's adaptability in a challenging economic landscape. By focusing on cost optimization in Canada and pursuing growth opportunities in Australia, the company is positioning itself to navigate current market uncertainties and potentially emerge stronger.
Stonegate Capital Partners, which provided the analysis, values the company between $29.03 and $32.28 per share using discounted cash flow analysis, with an additional valuation range of $31.07 to $37.91 through enterprise value to EBITDA comparative analysis.
