Bristow Group NYSE: VTOL affirmed its full-year 2026 adjusted EBITDA outlook after reporting higher sequential revenue and profitability in the second quarter, while outlining the recently completed acquisition of Berry Aviation and plans to sell its Norway offshore energy services business.
Chief Executive Officer Chris Bradshaw said the company remains on track for what management expects to be a “transformational year,” despite macroeconomic uncertainty and supply-chain issues affecting government search-and-rescue contract transitions. Bristow maintained its 2026 adjusted EBITDA guidance of $295 million to $325 million, representing anticipated year-over-year growth of about 25%, and its revenue outlook of $1.6 billion to $1.7 billion.
Second-quarter revenue increased by $23.1 million from the first quarter, driven primarily by stronger utilization in other services as well as higher fuel revenue and rates in offshore energy services. Adjusted EBITDA rose $20.5 million sequentially, reflecting higher revenue across segments and lower repair and maintenance costs, Chief Financial Officer Jennifer Whalen said.
Berry Aviation acquisition expands government services
Bristow closed its acquisition of Berry Aviation on July 13. Berry, based in San Marcos, Texas, operates more than 20 aircraft and provides military and defense aviation services in multiple countries. Its government offerings include special missions, intelligence, surveillance and reconnaissance operations, maintenance, repair and overhaul services, training, mission support, and unmanned aerial systems design and development.
Berry also provides on-demand cargo logistics and aftermarket aviation supply-chain services. Bradshaw said the acquisition expands Bristow’s presence to six continents and 20 countries, while adding capabilities and customer relationships that complement its existing government-services operations.
Management expects the transaction to be immediately accretive to earnings and free cash flow and to strengthen Bristow’s EBITDA margin profile. Berry’s special missions, MRO, CRO and UAS operations will be reported within Bristow’s government services segment, while its cargo and other offerings will be included in the other services segment.
Bradshaw said Berry’s military contracts generally have shorter durations than Bristow’s civilian search-and-rescue agreements because military missions can evolve more quickly. However, he said Berry has strong contract coverage for 2026 and into 2027 and has held its three largest contracts through multiple cycles.
Offshore energy guidance rises as activity improves
Offshore energy services revenue increased $7.3 million sequentially in the second quarter, helped by higher rates and fuel revenue in Europe and several Americas markets. Adjusted operating income in the segment increased $16.4 million, benefiting from higher revenue, $4.3 million lower operating expenses and $2.2 million of higher earnings from unconsolidated affiliates.
Repair and maintenance costs declined by $7.8 million, largely due to higher vendor credits, while personnel expenses declined $6.3 million because of seasonal variations in Norway. These factors were partly offset by $9.9 million of higher fuel, rate and other operating costs tied to increased activity and global commodity prices.
Whalen said Bristow tightened its offshore energy revenue forecast and raised its 2026 adjusted operating income guidance for the segment to $235 million to $245 million. The improved outlook reflects stronger first-half performance in rates and activity, including more aircraft being placed on contracts and contracts lasting longer than initially expected.
Bradshaw said effective utilization of Bristow’s heavy, super-medium and medium offshore helicopter fleet remains tight amid limited new aircraft capacity. He expects only a modest increase in flight hours during the second half of 2026, with 2027 representing a more meaningful inflection point for incremental offshore projects. He identified Africa, South America, Brazil, Suriname and Trinidad as areas showing stronger activity, while calling the North Sea stable but more mature.
Government-services transitions pressure near-term margins
Government services revenue rose $4.4 million sequentially, primarily from the start of operations at two UKSAR2G seasonal bases and annual rate escalations. Revenue also benefited from a full-quarter contribution from the Irish Coast Guard’s Waterford base and higher U.S. utilization.
However, adjusted operating income declined $2.3 million as operating expenses rose $6.1 million. Personnel costs increased $3.3 million due to base transitions, overtime and one-time U.K. labor-agreement salary adjustments. Training, inter-base travel and facilities costs rose $1.8 million, while fuel costs increased $1.5 million.
Whalen said rapid jet-fuel price increases reduced second-quarter government-services profitability by $1.5 million because of a delayed price-adjustment mechanism in the UKSAR2G contract. Bristow has amended that mechanism, and she said the impact should not recur in the third quarter or later.
Supply-chain constraints have also delayed aircraft deliveries and modifications, reducing 2026 adjusted operating income by approximately $8 million through aircraft-availability penalties and extended transition costs. Whalen said the challenges are largely related to Leonardo AW189 aircraft deliveries and modifications, though the company expects certain key components to return to a recovery status by the fourth quarter of 2026 or first quarter of 2027.
Bristow updated 2026 government-services guidance to revenue of $475 million to $495 million and adjusted operating income of $55 million to $65 million, including Berry’s government contracts. The operating-income range is roughly 60% above the midpoint of 2025 results, Whalen said.
Liquidity, Norway sale and growth initiatives
As of June, Bristow had $312 million of unrestricted cash and approximately $372 million of total available liquidity. Operating cash flow was $41.4 million in the second quarter, compared with an $8.3 million use of cash in the first quarter. The company paid $3.7 million in dividends during the quarter and declared a quarterly dividend of $0.125 per share, payable Aug. 28 to shareholders of record on Aug. 14.
The company expects total 2026 capital expenditures of about $160 million, including $130 million of growth capital expenditures and $30 million of maintenance spending. Management said most of the growth spending was weighted toward the first half of the year.
Bristow is also pursuing a sale of its Norway offshore energy services operation as part of its portfolio optimization strategy. Bradshaw said the process remains in its early stages and that the company has not experienced a material business impact since announcing the planned exit. On a pro forma basis, the Norway exit and Berry acquisition would have been neutral to Bristow’s 2025 EBITDA, he said.
Looking ahead, Bradshaw cited increased defense spending, energy security and transportation electrification as major long-term growth themes. He also highlighted Bristow-led advanced air mobility initiatives in Scotland, Norway and the U.S., while noting that aircraft certification, flight testing and the conversion of aircraft positions into firm orders will be important milestones for the emerging market.
About Bristow Group (NYSE:VTOL)
Bristow Group Inc is a global provider of helicopter services to the offshore energy industry and search-and-rescue (SAR) operations worldwide. The company specializes in the safe and efficient transport of personnel, equipment and supplies to offshore oil and gas platforms, as well as emergency response and medevac services. Bristow's operations support exploration, production and decommissioning activities, helping energy companies maintain continuity of production in some of the world's most challenging environments.
The company maintains a diverse fleet of turbine-powered helicopters, including medium- and heavy-lift aircraft such as the Sikorsky S-92, Airbus H225 (formerly EC225) and Leonardo AW189.
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