Oceaneering International Faces Financial Challenges with Increased Cash Use and Debt Management

authorIntellectia.AI2024-10-28
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OII.N
Illustration by Intellectia.AI

Oceaneering International (OII) has identified a new business risk in its financing activities. The company has significantly increased its cash usage from $5.1 million in 2023 to $17 million in 2024, primarily due to share repurchases and tax withholding payments. As of September 30, 2024, Oceaneering holds $500 million in long-term debt through 2028 Senior Notes, with semi-annual interest payments. Despite this, the company remains compliant with its financial covenants and has $215 million available in unused commitments under its Revolving Credit Facility. The management of these financing activities, including stock repurchases and debt servicing, is crucial to mitigating financial strain and maintaining financial health. The average stock price target for OII is $29.00, suggesting a 14.04% potential upside.

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