Civeo Corporation (NYSE: CVEO) reported its first quarter 2025 financial results, revealing a complex landscape of operational challenges and strategic repositioning in response to market pressures. The company experienced notable revenue declines, particularly in its Canadian segment, while maintaining robust performance in Australia.
The Canadian operations faced substantial headwinds, with revenues plummeting 40% year-over-year to $40.4 million. This decline stems from reduced customer spending in the oil sands region and the loss of occupancy at the Fort Hills-related McClelland Lake Lodge. In response, Civeo implemented aggressive cost-cutting measures, including a 25% reduction in Canadian headcount and cold-shuttering two lodges.
Conversely, the Australian segment demonstrated resilience, posting a 13% year-over-year revenue growth to $103.6 million. This performance was driven by increased integrated services activity under a significant six-year contract and strategic expansion plans in the Bowen Basin, including the acquisition of four villages.
Financial metrics for the quarter showed revenue of $144.0 million, adjusted EBITDA of $12.7 million, and an adjusted earnings per share of ($0.72). The company's negative free cash flow of $13.5 million, compared to $7.2 million in the prior-year period, prompted a strategic shift in capital allocation.
In a move to enhance shareholder value, Civeo increased its share repurchase authorization from 10% to 20% of outstanding shares and plans to utilize 100% of free cash flow to complete the program. The company also suspended its quarterly dividend to prioritize buybacks and improve financial flexibility, repurchasing 153,000 shares for approximately $3.3 million in the quarter.
For the full year 2025, Civeo revised its guidance, projecting revenue between $620 million and $650 million, with adjusted EBITDA expected to range from $75 million to $85 million. The company also reduced its capital expenditure guidance to $20-$25 million, emphasizing a disciplined approach to capital deployment.
The strategic adjustments reflect Civeo's commitment to navigating challenging market conditions, particularly in the Canadian market, while leveraging the strength of its Australian operations. The company's focus on cost reduction, strategic expansion, and shareholder value creation suggests a proactive approach to addressing current economic uncertainties in the hospitality and workforce accommodation sectors.
