OceanPact Serviços Marítimos S.A. (OPCT3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to OceanPact's Third Quarter of 2025 Earnings Call. [Operator Instructions] This conference is being recorded, and a replay will be available at the company's Investor Relations website at ri.oceanpact.com. The slide deck is also available at the company's Investor Relations website as well as at the CVM website at www gov.br/cvm. Before proceeding, we would like to mention that the forward-looking statements that may be made during this conference call relating to the company’'s business prospects and forecasts are predictions based on the management's current expectations. These expectations are highly dependent on macroeconomic conditions, market risks, and other factors. With us today are Mr. Flavio Andrade, CEO, Mr. Haroldo Solberg, Vice President and Director of Vessels, Adriano Ranieri, Director of the Services Segment, and Eduardo de Toledo, CFO and RRO. They will first comment on OceanPact’s 3Q25 performance, and then later they will be available to take your questions. I will now turn the conference over to Mr. Andrade. Please go ahead.

Thank you very much. Good morning. And thank you once again for joining us in another earnings call. This time we're going to talk about the third quarter of 2025 results. And we're very happy because we can confirm what we had already anticipated; this was a very good quarter, everything that we expected was confirmed. We have a backlog of BRL 6.7 billion, almost twice as much as the previous backlog. We signed the contract for the 4 RSVs for decommissioning and environmental monitoring, which were the ones that we expected to sign. We also had a record-breaking EBITDA in our history at BRL 213 million. I forgot to mention that my backdrop is a little bit different because I am at Belém. We are participating in COP30. I don't know if you can see the city of Belém in the backdrop. And we sent a sailboat with our experts and scientists to collect samples from Rio de Janeiro all the way up to Belém to demonstrate something that is very much under discussion right now, which is the importance of getting to know the ocean better. At this COP, there is a whole wing about the ocean. There are many parallel events at Green Zone to talk about the sea, there's a number of sailboats and surveys vessels here, showing the importance of the ocean, which we always advocated for. So we're very glad to be part of this. We are very well-positioned in this discussion. Now let's move on to talk about the highlights, the results of the quarter. Please, let's go to the next slide. Well, as I said, the quarter was very good. We had 88% occupancy rate. The guidance for the year continues the same, at 82%, and we're going to have many mobilizations in the last quarter of the year. Some vessels are under mobilization. We reached BRL 614 million in that revenue, BRL 213 million in EBITDA and BRL 58 million in net profit. Year-to-date, we have BRL 82 million in net income. Now, Haroldo, over to you to talk about the vessels segment.

Hello, good morning. I'm going to give you some details about the map, the occupancy, and the utilization rate of the 2025 year-to-date. And here, you can see that we had the best utilization rate in the year. In pink on the map, you can see that we have 4 vessels in maintenance, Parcel das Feiticeiras, Badejo, Ilha de São Sebastião and Ilha de Santana. And in yellow, we had Ilha de Tinharé. In one of the months, it was stopped without any contract, and we are now preparing the RSVs for the new contracts. We are going to finish 2025 with 82% utilization rate, in line with our guidance. Now we are going to present for the first time our projection for the utilization rate in 2026. This map may change due to many reasons, especially due to negotiations that are still ongoing. The projected utilization rate is 82% for 2026, in line with 2025. In the first quarter of '26, we should have a lower rate due to the mobilization of 3 RSVs, Bandolim, Meros, and Timbebas, and 2 AHTSs, Rochedo de São Paulo and São Pedro. Starting in the second quarter, these vessels should be operating, raising the utilization rate. We should remember that the new contracts for the RSVs had a significant increase in the daily rates. Let's go to the next slide, please. Now let's take a look at the breakdown of the 88% utilization rate in the third quarter. Here we can see the impact of the days without a contract with an impact of 1 percentage point, mobilization accounting for zero percentage point, and docking 3 percentage points, operational downtime 7 percentage point due to the concentration of downtime for maintenance in this period, as we saw on the map. And on the right-hand side, we can see an increase in the number of utilized days go from 1,583 days to 1,869 days. Our average net daily rate went from 4,972 to 5,336 due to the contracts, especially the RSVs and OTSVs, and also the short-term contracts for Parcel das Paredes and Parcel dos Meros, which started in the second half of 2025. Next slide. Now, let's take a look at the results of the vessel segment. The net income, the net revenue actually, stood at BRL 400 million, with a 59% increase year-on-year. And on the right-hand side, you can see that the EBITDA in the quarter went from BRL 68 million to BRL 136 million with an increase of 101%. And the EBITDA margin went from 27% to 34% because of the increase in the daily rates and also a lower number of idle days. Now I'll turn it over to Adriano Ranieri to talk about the services segment.

Hello, good morning. In the services segment, we also had a great 3Q, as expected. The Subsea & Geosciences unit reached BRL 150 million in net revenue, with an increase of 76%, especially because of the high productivity in the inspection of mooring lines campaigns. We had some additional ones in some other clients. And the Oil Spill response unit reached BRL 36 million in net revenue with an 18% growth, which was driven by an expansion in the contracts for port response and also some renewals. We can also see an increase in the consulting and the logistics contracts, which reached BRL 29 million in net revenue, a 40% increase year-on-year. Next slide, please. Now let's take a look at the consolidated results. Our revenue came to BRL 214 million, with a 58% increase. Our EBITDA was BRL 77 million, with a 36% margin. The increase was so sharp because of the productivity across all units. In 3Q24, we had some struggles with bad weather, which did not happen this year. So that explains part of that increase as well. Now over to Eduardo.

Hello, good morning. It is a pleasure to join you. First, I'd like to talk about the consolidated results for the entire company. Our revenue came to BRL 614 million, a 58% increase year-on-year. And our consolidated EBITDA came to BRL 213 3 million, a 104% increase year-on-year. The result is very significant, but it is in line with our expectations for this quarter. Now let's take a look at the operating costs. They came to BRL 339 million in 3Q '25. With an increase of 47% year-on-year on a comparable basis. This growth is a direct result of the increase in volumes of operations, but it was also impacted by some one-off situations. One of them is the charter contract of the Meros vessel, it is now accounted for as "cost", so it affects comparability. And another element that should be highlighted is the subcontract of ROVs. We had to contract ROVs for this quarter. So those are the two one-off effects. Now let's take a look at our consolidated G&A. It came to BRL 62 million in the quarter, a 15% increase year-on-year. Part of that is due to the price of stock, which increased from June to late September, so we had to adjust our provisions. We also have some new business initiatives which impact our G&A as well. Those are one-off effects as well. I'd like to take this chance now to tell you that we decided to expand our efforts to pursue more efficiency. Since October, we have been working with Gradus in the pursuit for efficiency, trying to find opportunities to gain efficiency, and you are going to see the results of that over the coming quarters. Our consolidated CapEx was BRL 122 million in the quarter, a little bit lower than last year. And starting in the fourth quarter 2025 and the first quarter '26, we are going to see an increase in CapEx due to the mobilizations that will take place in the next two quarters. Next slide, please. Now, let me give you some more details about our financial performance. We finished the quarter with BRL 660 million in our cash. That increase is related to the seventh debenture issuance, which was conducted successfully. It is also related to funding from an institution, a banking institution, in the amount of BRL 200 million, and also, our operating performance in the quarter. That's why we are at such a strong cash position. And now we have the funds that we need to cover the CapEx needs that will come in 4Q '25 and 1Q '26. Our net debt went down this quarter to BRL 1,116 billion and the net debt over EBITDA is at 1.78. Now, Flavio, over to you.

Thank you, Eduardo. Our backlog, as I said in the opening, went from BRL 3 billion to BRL 6.7 billion, and that increase is related to the new contracts for the 4 RSVs, it also includes the contract for environmental monitoring with Petrobras. We renewed it, we have been with this contract for 10 years already, and now it has better conditions and we also have a contract for the decommissioning of Trident. As I mentioned earlier, we had the Rio-Belém expedition initiative, which has yielded great results, many people have been contacting us about it. We are using the IDNA technology which will allow us to improve the baseline studies and identify the species that inhabit our seas with less costs in the collection of samples. We also have a new innovation project in a cooperation contract with Petrobras in which we are going to use AI to predict ocean currents, and also, we are using AI to fight the sun coral, which is an invasive species that is very much controlled by the Brazilian Environmental Agency, and this coral causes a lot of biofouling in the vessels that operate in our coasts. And we developed this solution to automatically detect this species from images captured by ROVs. And that is going to put us in a very interesting position competition-wise. It was a great achievement for us. Next slide, please. Well, to wrap up the presentation, I'd just like to underscore that the next two quarters, the one that is going on right now and the next one, the first quarter 2026, we are going to have more mobilizations taking place for the new contracts, and therefore, the utilization rate will be lower. And the focus of the company is on delivering on these projects according to the budget and on time. As Eduardo said about the chartering contract of Parcel dos Meros, we extended that contract. Meros is going to be the main vessel in the decommissioning project, and we were able to ensure that renewal. And we bought 2 ROVs to work with our own ROVs in this operation. They will be ours and operated by us as well. We also had new debt, new funding at better rates to ensure that we are going to have the funds for this new cycle of mobilizations. And also, I'd like to mention that we now have a new funding coming from FMM for the construction of a new quay, which will drive down the costs for mooring, and it is going to expand also the services that we can provide to our clients. We have a warehouse where we can operate our business for our clients, but we don't have our own harbor, and now we're going to have one. And that's it on my side. I am ready now to take your questions. Thank you.

[Operator Instructions] The first question comes from Eric Mello, with Itaú BBA.

Hello, everybody. Good morning. First of all, congratulations on the great results. I have two questions. Well, your focus on the subsea market proved right. Now, looking forward, what's your perspective about the opportunities in this field? Do you think that is there opportunity in other segments, with other vessels, or are you going to keep the same focus? And the second question is about the mobilizations to come. I understand that you're going to focus on delivering on those projects on time and according to the budget, but if you can give us more color about how EBITDA is going to evolve over the next two quarters, and what's going to be the recurring EBITDA after such mobilizations?

I'm going to answer the first part of the question, and Eduardo is going to take the second part. Well, about subsea operations, yes, we are very happy about the investments that we made in building a good team and acquiring the RSVs and the ROVs and starting operating our own ROVs gradually. We believe that the size of our fleet is appropriate. We have a very good diverse RSV fleet, at the right sizes. We may see opportunities when it comes to decommissioning. Sometimes, depending on the type and the depth at which you have to remove the flexible lines, you might require different vessels. In that case, if that happens, depending on the duration of the contracts, we are going to ask partners to help us. We might have to charter vessels. But that is only going to happen if the contract is long enough to justify that type of investment. So we don't envision many changes in the vessels. Now, when it comes to ROVs, with the investment in remote operations that we conduct with low latency internet connection, with low height, low altitude satellites, now we want to operate the ROVs from land, with our own offices to drive costs down and make operations easier, especially with intermittent use. If we have a vessel that is multi-use, for example, for a supply oil spill and ROVs, that type of investment may make sense. And Petrobras, in turn, is asking ROVs to be installed in other types of vessels, for example, AHTSs. So we see some opportunities, one-off opportunities for us to continue to invest and evolve on ROVs. But in our fleet, I believe that we only have to install our own ROV in Parcel dos Feiticeiras. That's the only one that still doesn't have its own ROV, but it is under contract with Petrobras right now. And Eduardo, over to you.

Thank you, Eric, for your question. Thank you very much for your kind words as well. This is what we are expecting. The fourth quarter of the year will bring a lower utilization rate, but still, because of the new daily rates and because of everything that we have been doing at the company, even though the utilization rates will be lower, in the 4Q, we expect to see EBITDA in line with the second quarter of 2025, although the utilization rate is going to be lower than 2Q '25. And that is the result of the improvement in daily rates. I'd like to take this chance to address another topic. Once we start working more on the services side of the business, for example, decommissioning, we are going to start seeing some one-off situations appearing. And in the fourth quarter '25, we believe there is going to be an interesting opportunity for us to conduct a decommissioning campaign. If we manage to finish it during the fourth quarter, we will be able to have an EBITDA at the fourth quarter that will be between the numbers that we had in the second and the third quarters of 2025, just so you have an idea of how strong these contracts are. We are trying to make it happen in December. It might happen in January. We cannot give you certainty around that, but there is a very good chance that is going to happen still in December this year. In the first quarter '26, we are going to see a similar situation as the fourth quarter; 25, but a little better because some of those contracts for the RSVs will have already started. And from then on, with all the new contracts, we are going to start moving faster towards those levels that we told you would be possible during our OceanPact Day, right? We're going to start moving towards that direction. The performance that we had in the third quarter was exceptional because the new contracts are not in force yet for the 4 RSVs, and that may become a more recurring result because of the new services contracts as well. So I think that's the picture that we can give you for the next quarters. I think that's a fair description of our perspective for the next quarters.

The next question comes from Mr. Gustavo Sádica, with Bradesco BBI.

Hello, good morning, Eduardo, Flavio, Haroldo. Thank you for taking my question and congratulations on the great results. My first question is, the company is now starting a new movement with your net debt over EBITDA going under 2x, and we are going to start seeing a positive cash generation, especially when it comes to that lawsuit related to Coral. So what is your perspective in terms of capital allocation now that the leverage level seems to be in a downward trend? My second question is about the vessel segment. The company just renewed the 4 RSV contracts, and Meros should enter the decommissioning contract, but there are 3 contracts that should be renewed still. Since the spot price is so good, do you think that you are going to keep those vessels out of long-term contracts to take advantage of the high spot prices? Those are my questions. Thank you.

Let me start with your last question. I think that those questions should be answered by me, and Eduardo is going to address your first question. About the RSVs first, yes, we won the bids for the 4 RSVs that we mentioned. Parcel das Feiticeiras is still under contract with Petrobras, and according to our conversations, we believe that Petrobras is changing its plans to prioritize renewals instead of having new bids. They want to renew the contracts renegotiating the daily rates or not, but without losing continuity, because Petrobras needs the vessels. And that might be an opportunity for us to have a longer contract without having to invest any CapEx. So that might be an interesting opportunity for us. So that vessel would not be in the spot market. The spot market for the RSVs is not that spot, if you will. This quarter, we had the short-term contracts, that's true, but what happens is that there are many decommissioning contracts that are longer, where we can use our vessels in some periods. So having that possibility and taking advantage of the time in between contracts or gaps, longer gaps that we might have, that's very good for us because we can be more flexible on both sides. That makes us more competitive in the participation of these bids for services, be it decommissioning, be it short-term services that will require RSVs, and also, we are going to have good utilization in general. Now let's talk about capital allocation. What I can tell you is that the daily rates went up, and we are happy about it, but they did not go up that much so that we would be interested in investing in more vessels, because the good second-hand vessels are not that available. In the past, we bought good vessels at good prices, and we adjusted them for the specific uses that Petrobras required. But that is in the past. That window is shut now. We took advantage of it, but we don't see a similar window right now in the foreseeable future. So we are not considering the purchase of new vessels right now. And now, Eduardo, if you can address the question about the lawsuit and dividends.

Well, Gustavo, we believe that a leverage level between 1.5 to 2x our EBITDA would be the sweet spot for us. That's where we want to be. We believe that range would be comfortable for us, and it is a range that would allow us to have a good financial leverage. And in that vein, I believe that, that range would also allow us to pay dividends or maybe have a buyback program. But again, with the perspectives that we can see and that the market is seeing right now, I think that we are going to have a very good ability to distribute dividend payout and also buy our shares back.

[Operator Instructions] The next question was submitted in writing by Herbert Tavares.

You increased the number of staff for the implementation of the new contracts. Can we expect to see a margin increase once the contracts have been implemented, considering that the personnel costs are already impacting the P&L and not the revenues?

Let me answer that question. The personnel expenses have been growing because the company has been growing. The company is expanding in size significantly. The consultancy activity, our consultancy business, is growing at very significant rates, and it employs a lot of people. We have also landed many R&D contracts, and with the money that the oil companies have, they want to develop R&D projects together with us, and that also allows us to acquire knowledge, which will, in turn, yield new projects and new opportunities for us. So that more than justifies the increase in our staff. And you talked also about margins. I believe that it is natural to see a margin increase once these contracts start to be implemented at appropriate daily rates, according to the new market reality. We bought the vessels in a very good moment, as Flavio said, but we had to sign contracts that were in accordance with that moment of the market. The market had not evolved yet. And now with the new contracts, we will be able to enjoy and capture all of that evolution that the market experienced over the past year. So margin increase would be natural for us.

The next question was also submitted in writing, by an anonymous attendee. Good morning. With Petrobras' movement requesting renegotiations and the pursuit of efficiency in costs, do you see any impact of that on the Company? Are they asking for discounts or maybe an extension?

Well, we did not have any impact of that sort yet. And Petrobras is indeed trying to get more cost efficiency. However, differently from the pandemic times where they just asked for a discount, this time around they are offering something that's very interesting; Petrobras is open to suggestions about contract changes that would allow for those discounts. And I think that is a very good movement on their part. In all conferences, including abroad, someone asked them about CapEx in the same contracts for same vessels, because that was putting pressure on the Company's results and that causes prices to go up when there's scarcity of vessels. So we believe that this is a good opportunity. Petrobras sent that letter to us. We are talking about this matter. We have a few suggestions but maybe looking forward in the new contracts more than the current contracts. But yes, we see that initiative very positively, and we believe that it's going to be a win-win situation. I don't know if Eduardo would like to add anything to my answer.

Well, I think you said it well. Petrobras came to talk to us in advance to extend current contracts instead of having daily rates go up in a new contract, because then the vessel would have to be docked for a long time and that causes daily rates to go up in the next contract. So Petrobras is opting for extending renewing the contracts that might be part of their efficiency pursuit as well.

[Operator Instructions] The next question was also submitted in writing, by an anonymous attendee: Due to the tax on dividends starting in 2026, is the Company considering the payment of dividends still in 2025?

Well, we have an accumulated profit that is equivalent to the accumulated losses on our balance sheet. So the net income this year is going to offset the losses as well. So we shouldn't have any dividends to be paid in relation to the 2025 results. If so, it is going to be very little. So it doesn't really make any sense to consider that we are right now, since we're going through this moment.

There are no more questions, so I'd like to turn it over to Eduardo for his closing remarks.

Well, thank you very much for participating in our call and asking questions. We are very happy about how far we've come. But we are also very energized to make more progress. The fact that we hired Gradus bears witness to how much we want to get better and better results, and better and better efficiency. So we're working hard on it, and I am certain that effort is going to lead to even more efficiency in our operations in the coming quarters. Now, Flavio, over to you.

Thank you, Eduardo. Thank you, everybody. Well, pursuing efficiency should be an effort that we implement across the board. Here at COP30, we have been talking to all of our oil clients. They need to decarbonize their operations, and it seems to be contradictory, because to produce oil, you have to carbonize your operations. But it does make a difference. And that is going to allow for new technologies to be developed for energy transition when it is mature enough to happen. You know, wanting to change is pointless if you don't have the appropriate conditions for it. The world still needs oil. It will need oil for a long time still. And we need to help our clients do that, because another need that the world has right now is decarbonization. And therefore, we're here to help our clients trying to go forward with them towards the same direction. With that, I'd like to thank you very much and wish you a good day.

This concludes OceanPact's earnings call for today. Thank you for your participation. Have a good one. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]