Bristow Holds 2026 EBITDA View as Supply-Chain Slows Government Margins

Bristow Group (VTOL) affirmed its full-year 2026 adjusted EBITDA guidance of $295 million to $325 million after second-quarter revenue and profitability improved sequentially. The company also raised its offshore energy segment profit view while grappling with supply-chain delays that have cut government-services operating income by roughly $8 million.

Second-quarter revenue rose $23.1 million from the first quarter, driven by stronger utilization in other services and higher fuel revenue and rates in offshore energy. Adjusted EBITDA increased $20.5 million, reflecting higher revenue across segments and lower repair and maintenance costs, Chief Financial Officer Jennifer Whalen said.

Offshore energy services revenue gained $7.3 million sequentially, helped by higher rates and fuel revenue in Europe and several Americas markets. Adjusted operating income for the segment jumped $16.4 million, aided by $4.3 million in lower operating expenses and $2.2 million in higher earnings from unconsolidated affiliates. Repair and maintenance costs fell $7.8 million largely because of higher vendor credits, and personnel expenses dropped $6.3 million on seasonal shifts in Norway. Those gains were partly offset by $9.9 million in 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 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 placed on contracts and contracts lasting longer than initially expected.

Chief Executive Officer Chris 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.

The Berry Aviation acquisition closed July 13. Berry, based in San Marcos, Texas, operates more than 20 aircraft and provides military and defense aviation services in multiple countries, including special missions and maintenance, repair and overhaul operations. Bradshaw said the deal expands Bristow's presence to six continents and 20 countries, adding capabilities and customer relationships that complement 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.

Government services revenue rose $4.4 million sequentially, driven by the start of operations at two UKSAR2G seasonal bases, annual rate escalations, a full-quarter contribution from the Irish Coast Guard's Waterford base and higher U.S. utilization. Adjusted operating income in the segment declined $2.3 million as operating expenses rose $6.1 million. Personnel costs increased $3.3 million on base transitions, overtime and one-time U.K. labor-agreement salary adjustments. Training, inter-base travel and facilities costs rose $1.8 million, and fuel costs increased $1.5 million.

Whalen said rapid jet-fuel price increases cut 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 delayed aircraft deliveries and modifications, reducing 2026 adjusted operating income by roughly $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 the 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.

As of June, Bristow had $312 million of unrestricted cash and roughly $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. Total 2026 capital expenditures are expected at roughly $160 million, including $130 million of growth capital expenditures and $30 million of maintenance spending. Most of the growth spending was weighted toward the first half of the year, management said.

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.

Bradshaw cited increased defense spending and energy security as major long-term growth themes, while noting that aircraft certification, flight testing and the conversion of aircraft positions into firm orders will be important milestones for the emerging advanced air mobility market. Bristow is leading AAM initiatives in Scotland, Norway and the U.S., he said.