Conferencia de resultados del 3T 2026 de Bristow Group (VTOL): Se reafirma el punto medio del EBITDA de 310 millones de dólares

Conclusiones clave

• Bristow Group (NYSE: VTOL) reafirmó el punto medio de su previsión de EBITDA ajustado para todo el año 2026 en aproximadamente 310 millones de dólares, lo que representa una estimación de la dirección de cerca de un 25% de crecimiento interanual.
• Los ingresos del tercer trimestre aumentaron aproximadamente 26 millones de dólares de forma secuencial, mientras que el EBITDA ajustado creció cerca de 10 millones de dólares frente al segundo trimestre.
• Offshore Energy Services registró un margen de beneficio operativo ajustado del 27%, por encima del nivel de poco más del 10% cuando comenzaron los reajustes de contratos a finales de 2023. Bristow elevó la previsión de beneficio operativo ajustado del segmento para 2026 a entre 240 millones y 250 millones de dólares.
• Las disrupciones en la cadena de suministro continuaron presionando a Government Services debido al tiempo de inactividad de las aeronaves, penalizaciones contractuales, mano de obra adicional, horas extra y mantenimiento externalizado. La previsión de beneficio operativo ajustado del segmento para 2026 se revisó a entre 35 millones y 45 millones de dólares.
• Bristow Special Missions aportó 16,9 millones de dólares a los ingresos de Government Services y 9,2 millones de dólares a los ingresos de Other Services tras el cierre de la adquisición el 13 de julio. La dirección prevé que su crecimiento se acelere en el cuarto trimestre de 2026 y en 2027.
• Bristow cerró septiembre de 2026 con 233,4 millones de dólares en efectivo no restringido y aproximadamente 287 millones de dólares en liquidez total disponible. La compañía recompró 550.000 acciones por 25 millones de dólares durante el tercer trimestre.

Datos financieros principales

Rendimiento comercial y operativo

Offshore Energy Services

Offshore Energy Services continuó siendo el principal motor de beneficios de Bristow. La menor utilización en el mar del Norte redujo los ingresos, pero también disminuyó los costes, ya que la región es uno de los mercados más caros para la compañía. Por su parte, la mayor utilización y tarifas en América, junto con los reajustes de contratos y el crecimiento en África, impulsaron la expansión de los márgenes.

La dirección afirmó que los contratos de Offshore Energy Services están prácticamente reajustados en su totalidad, y que el beneficio para todo el año de los recientes incrementos de tarifas se espera para 2027. Aproximadamente el 85% de los ingresos del segmento respalda actividades de producción a largo plazo.

Bristow planea trasladar helicópteros S-92 disponibles desde el mercado más maduro del mar del Norte hacia África y América. Siete nuevas aeronaves de tamaño súper mediano apenas habían generado una contribución significativa reportada hasta el tercer trimestre, lo que deja potenciales beneficios incrementales de despliegue para 2027 y años posteriores.

La dirección señaló que las decisiones finales de inversión en proyectos offshore van camino de superar los 110.000 millones de dólares en 2026, frente a los 70.000 millones de dólares de 2025, con una proyección de aproximadamente 144.000 millones de dólares para 2027. Asimismo, hizo referencia a una utilización prevista de plataformas flotantes a nivel mundial del 96% en 2027.

Government Services y Special Missions

Government Services continuó enfrentando problemas de disponibilidad de aeronaves, vinculados principalmente a modelos de Leonardo utilizados en contratos de búsqueda y rescate. La flota de la Guardia Costera irlandesa está compuesta por helicópteros AW189, mientras que la flota británica SAR 2G utiliza principalmente AW189 y, en menor medida, AW139.

Bristow ha incrementado el inventario, retenido personal adicional, ampliado las horas extra y añadido un segundo turno para modificaciones de aeronaves. Estas medidas respaldan la ejecución de los contratos, pero elevan los costes operativos. Algunos clientes también han ofrecido alivio frente a las penalizaciones vinculadas a la disponibilidad, incluido un límite máximo que se espera se mantenga vigente al menos hasta el primer trimestre de 2027 para el mayor cliente gubernamental de Bristow.

Bristow Special Missions tuvo un desempeño en línea con las expectativas de la compañía para 2026. La dirección destacó oportunidades de crecimiento en misiones de inteligencia, vigilancia y reconocimiento, transporte de tropas y carga bajo demanda. La integración de los servicios administrativos avanza sin problemas significativos, mientras que la integración operativa es limitada debido a que el negocio adquirido opera principalmente aeronaves de ala fija.

Asignación de capital y flota

El uso de efectivo en el tercer trimestre incluyó aproximadamente 103 millones de dólares para la adquisición de Bristow Special Missions, 29 millones de dólares en retornos para los accionistas y 20,8 millones de dólares en inversiones de capital. Los pagos de principal e intereses sumaron 24 millones de dólares, mientras que una operación de sale-leaseback de aeronaves generó 19 millones de dólares en ingresos netos.

La compañía recompró 550.000 acciones a un precio medio de 45,64 dólares, lo que deja 96 millones de dólares disponibles bajo su autorización. Bristow también declaró un dividendo trimestral de 0,125 dólares por acción, pagadero el 27 de noviembre de 2026 a los accionistas registrados al 13 de noviembre.

Dos helicópteros AW189 permanecían en la cartera de pedidos en firme. La dirección esperaba una entrega en noviembre de 2026 y la otra en 2027. Las opciones adicionales solo se ejercerían si están respaldadas por la demanda de los clientes y condiciones comerciales adecuadas.

Previsiones de la dirección

La dirección prevé que algunos costes de transición de contratos gubernamentales continúen hasta principios de 2027, seguidos de una recuperación gradual de los márgenes. A partir de las conversaciones actuales con los proveedores, la mejor estimación de la compañía es que las condiciones de la cadena de suministro deberían estabilizarse para finales del primer trimestre de 2027.

Bristow también está reemplazando su sistema heredado de planificación de recursos empresariales (ERP). Se prevé que el nuevo ERP entre en funcionamiento en 2028 y genere ahorros anuales recurrentes de varios millones de dólares tras su plena implementación. La compañía aún no ha cuantificado el coste de implementación del proyecto.

Riesgos y factores clave a vigilar

• La disponibilidad de repuestos en el mercado de posventa sigue siendo un problema más importante que los retrasos en las entregas de nuevas aeronaves, según la dirección.
• Las restricciones de suministro están reduciendo la disponibilidad de aeronaves y generando costes más allá de las penalizaciones contractuales, incluidos ingresos perdidos, canibalización de la flota, retrasos en la devolución de arrendamientos, personal adicional, horas extra y mantenimiento contratado con terceros.
• Las aeronaves de Leonardo son la principal fuente de los retrasos que afectan a las transiciones de búsqueda y rescate gubernamentales. Los plazos para la estabilización de la cadena de suministro siguen siendo inciertos a pesar de las inversiones de los proveedores y de la búsqueda de fuentes de suministro adicionales.
• Las continuas restricciones en la disponibilidad de aeronaves podrían limitar la capacidad de Bristow para captar la demanda incremental en Offshore Energy Services.
• La dirección identificó la evolución geopolítica, las variaciones en los precios de las materias primas y los movimientos en los tipos de cambio como riesgos adicionales. La exposición cambiaria es especialmente relevante en los contratos gubernamentales liquidados en monedas locales.

Puntos destacados de la sesión de preguntas y respuestas con analistas

• Mitigación de la cadena de suministro: Bristow mantiene más inventario, emplea personal adicional, recurre a horas extra y opera un segundo turno de mantenimiento. La dirección también está negociando protección contractual para problemas de disponibilidad ajenos al control de la compañía.
• Normalización esperada: Leonardo está invirtiendo en proveedores, inventario y fuentes adicionales de componentes. La dirección señaló que la información actual apunta a una posición de suministro más estable para finales del primer trimestre de 2027, aunque la mejora no será inmediata.
• Capacidad para el crecimiento de OES: Los helicópteros S-92 disponibles pueden reubicarse desde el mar del Norte, mientras que los nuevos helicópteros de tamaño súper mediano y la capacidad no utilizada de horas de vuelo pueden respaldar trabajo adicional tanto a largo como a corto plazo.
• Perspectivas de Special Missions: La dirección espera que el crecimiento se acelere mediante aeronaves adicionales alquiladas o en propiedad que respalden misiones de ISR, transporte de tropas y otras operaciones en América y fuera del territorio continental de Estados Unidos.
• Asignación de capital: La recompra de acciones seguirá siendo oportunista en lugar de sistemática. Bristow también continúa financiando dividendos, inversiones en la flota y expansión estratégica.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good day, everyone, and welcome to Bristow Group's Third Quarter 2026 Earnings Call. Today's call is being recorded.

[Operator Instructions]

At this time, I would like to turn the call over to Red Tillahan, Senior Manager of Investor Relations and Financial Reporting.

Redeate Tilahun

Thank you, Michael. Good morning, everyone, and welcome to Bristow Group's Third Quarter of 2026 Earnings Call.

I am joined on the call today with our President and Chief Executive Officer, Chris Bradshaw, and Senior Vice President and Chief Financial Officer, Jennifer Whalen.

Before we begin, I'd like to take this opportunity to remind everyone that during the course of this call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on Slide 3 of the investor presentation.

You may access the investor presentation on our website. We will also reference certain non-GAAP financial measures such as EBITDA and free cash flow.

A reconciliation of such measures to GAAP is included in the earnings release and the investor presentation. I will now turn the call over to our President and CEO. Chris?

Christopher Bradshaw

Thank you, Red. I'll begin with updates on 5 key topics. First, safety, which remains Bristow's #1 core value and highest operational priority.

The company delivered on our goal of 0 air accidents through the first 10 months of 2026. In occupational safety, we remain on track to achieve our third consecutive year of fewer lost workdays.

I would like to thank everyone on the Bristow team for their continued focus on Target Zero, which is our commitment to 0 accidents and zero harm.

Second, Bristow announced strong financial results for the third quarter, and we are reaffirming the midpoint for the company's full-year 2026 adjusted EBITDA guidance, which reflects year-over-year growth of approximately 25%.

The ability to confirm this outlook despite macro uncertainties and continued supply chain challenges is a testament to the complementary nature of Bristow's business segments and the benefits provided by the significant geographic and customer diversity in our business model.

Third, Bristow Special Missions, formerly known as Berry Aviation, has contributed strong financial results since the acquisition closed in July, and we expect this growth to accelerate in the fourth quarter and full year 2027.

This acquisition has strengthened Bristow's business by adding specialized capabilities across a range of mission-critical operations and strong relationships with key military and defense customers, better positioning the company to benefit from increased defense spending trends.

Fourth, persistent industry supply chain challenges have hampered our performance. The fact that this is a familiar theme common across the aviation sector does not make it any less frustrating.

Since 2020, on-time deliveries from key original equipment manufacturers have fallen by approximately 20%. Moreover, when delivery dates are missed, they have been missed by extended intervals.

Slide #9 of this quarter's earnings presentation summarizes extended maintenance downtime periods experienced across the helicopter industry.

We have been compelled to increase inventory levels and implement other mitigations that come at a cost to the company. But unfortunately, key components continue to have increased turn times and arrive late from the suppliers.

While we are experiencing these challenges across Bristow's business, the most acute impacts can be seen in delayed aircraft modification programs for the company's new search and rescue contracts.

These delays and their associated knock-on effects are depressing current margins in our Government Services segment. While the most readily visible effects may be contractual performance penalties, these penalties dramatically underestimate the total impact.

The full knock-on effects of these delayed contract transitions include, but are not limited to, lost revenue opportunities, manpower and time spent chasing parts, cannibalization of the company's internal fleet to keep aircraft flying, and delayed aircraft lease returns, not to mention retaining additional headcount, overtime expense, and costs for outsourced third-party maintenance support.

Looking forward, based on detailed discussions and work with our key vendors, we expect these supply chain issues to stabilize during 2027, facilitating a return to historically strong margins in our Government Services business.

Fifth and finally, Bristow's overall business is continuing to perform well despite the supply chain headwinds.

Our Offshore Energy Services business has continued to demonstrate robust profitability, and we believe positive offshore energy fundamentals and the tight supply of relevant offshore helicopters have combined for more favorable industry conditions than we've seen in more than a dozen years.

I'll take some time to discuss more of the drivers poised to benefit the company later in this call. But for now, I'll hand it over to our CFO for a detailed discussion of Q3 results. Jennifer?

Jennifer Whalen

Thank you, Chris, and good morning, everyone.

Before we begin, I would like to highlight that the financial results for Bristow Special Mission, Inc., or BSM, from July 13 onwards are included in our consolidated financial results following the successful closing of the acquisition in July.

As a reminder, Special Missions, MRO, and UAS business results are included as a part of our Government Services segment, while the results for on-demand cargo and other remaining BSM services are reflected as a part of our Other Services segment.

Looking at the sequential quarter financial results on a consolidated basis, Bristow's total revenues were approximately $26 million higher in Q3 compared to Q2, while adjusted EBITDA was approximately $10 million higher this quarter.

We have tightened our guidance ranges for the remainder of the year and updated certain segments and consolidated ranges as reflected on Slide 13 of our presentation.

We are also affirming our 2026 adjusted EBITDA guidance midpoint of approximately $310 million.

Turning now to our segment financial results and outlook. Revenues in our Offshore Energy Services, or OES, segment were $5.6 million lower in Q3, primarily due to lower utilization in Europe and higher penalties in Africa, partially offset by higher utilization and rates in the Americas.

Adjusted operating income in OES was $2 million higher this quarter, due to lower total operating expenses of $8.3 million and general and administrative expenses of $1.1 million, offsetting the lower revenues.

The decrease in costs was primarily driven by lower utilization levels in the North Sea and lower global fuel prices.

Given that the North Sea is one of our higher-cost markets in which we operate, these decreased costs, coupled with successful contract resets and growth over the past few years in key markets such as the Americas and Africa, have led to margin expansion.

Our OES segment adjusted operating income margin was 27% this quarter compared to margins in the low teens when we first began to reset our contracts towards the end of 2023.

Our OES contracts are now effectively fully reset, with full-year impact of the more recent rate adjustments to be seen in 2027.

Given the continued performance of our OES business, we are tightening our 2026 guidance and increasing the adjusted operating income guidance range to $240 million to $250 million for this segment.

Moving on to Government Services. Revenues for this segment were $17.8 million higher, primarily due to the acquisition of BSM, which contributed $16.9 million of revenues in the quarter.

Revenues on the U.K. search and rescue contract were $1.6 million higher as a result of lower penalties and increased fuel revenues.

Revenues on the Irish Coast Guard contract were $0.7 million lower due to higher penalties related to aircraft availability.

Adjusted operating income was $2.5 million higher, primarily due to the revenues from BSM, partially offset by higher operating expenses of $13 million and general and administrative expenses of $2.4 million, both of which were driven by the inclusion of BSM and ongoing contract transitions.

While government contract transitions have continued to progress and penalties have decreased in the U.K. this quarter, overall penalties related to aircraft availability, which has been adversely impacted by continued supply chain challenges, have remained elevated throughout this year.

As Chris noted, the knock-on effects of these supply chain issues have been more significant than the penalties themselves. The net impact of these factors is included in our revised Government Services segment adjusted operating income range for 2026.

At this time, we are updating our 2026 revenue guidance range to $470 million to $490 million and the adjusted operating income guidance range to $35 million to $45 million for this segment.

As noted on our previous call, some of these transition costs will extend into early 2027, and margins on these government SAR contracts are expected to recover over time.

As a reminder, these are typically 10-year base contract periods plus option years, and we still expect to generate attractive long-term cash flow yields on these important government services mandates.

2027 and beyond will also benefit from the full-year impact of the BSM acquisition and the new opportunities that are expected to arise from Bristow's new multi-mission government services offering.

In our Other Services segment, revenues were $14 million higher this quarter, primarily due to the inclusion of BSM revenues of $9.2 million and higher activity in Australia, resulting in higher revenues of $4.8 million.

Adjusted operating income for this segment was $7.4 million higher in the current quarter, mostly resulting from the increased revenues, partially offset by higher operating expenses of $4.7 million and general and administrative expenses of $1.9 million, both of which were largely related to the inclusion of BSM.

We are affirming our 2026 other services revenues and adjusted operating income guidance ranges of $155 million to $175 million and $25 million to $30 million, respectively.

Lastly, the $4.5 million increase in corporate expenses this quarter is attributable to higher professional service fees related to the acquisition of BSM. But otherwise, our corporate costs remain consistent.

During the quarter, we launched a new initiative aimed at retiring our legacy enterprise resource planning system and implementing a new ERP system over the course of the next year.

Once live, the new ERP system is expected to save the company a meaningful amount of annual costs while offering more robust capabilities than our existing system.

The new ERP is expected to go live in 2028. We are excited to launch this project, and we will provide material updates as we progress.

Turning now to capital allocation, cash flows, and liquidity. Our primary sources and uses of cash during the third quarter included approximately $103 million of net cash used to acquire BSM, which is subject to additional purchase price adjustments; about $29 million on shareholder returns, which include $25 million of share repurchases and nearly $4 million in cash dividends; $20.8 million of capital expenditures primarily related to progress payments on OES-configured AW189 aircraft on order, ongoing contract transitions, and normal course maintenance CapEx.

Principal and interest payments of $24 million and net proceeds on an aircraft sale-leaseback transaction of $19 million.

Net cash provided by operating activities increased by $20 million this quarter, while working capital showed an improvement of $17.7 million during Q3.

Bristow continues to maintain a healthy cash balance and strong liquidity position. As of September 2026, our unrestricted cash balance was $233.4 million, with total available liquidity of approximately $287 million.

As we continue to execute on our capital allocation program, we were pleased to return capital to shareholders this quarter through opportunistic share buybacks and additional dividend payments.

The company repurchased 550,000 shares of common stock for $25 million at an average price per share of $45.64, with $96 million remaining available under the repurchase program.

Additionally, on October 29, 2026, Bristow declared a dividend of $0.125 per share of common stock payable on November 27 to shareholders of record at the close of business on November 13.

At this time, I will turn the call back to Chris for further remarks. Chris?

Christopher Bradshaw

Thank you. As noted earlier, I want to spend some time discussing industry fundamentals and the trends supporting a positive outlook for offshore Energy Services.

Referencing Slide #14 of the earnings presentation materials.

While the spot prices for crude oil and natural gas may swing up or down based upon the day's headlines, our OES customers plan their activities and expenditures based upon long-term views for commodity prices and expected financial returns.

The global demand for oil and gas is expected to increase more than 12% over the next 15 years. But where will the incremental supply come from, and how secure are those barrels?

Like many industry observers, we expect offshore projects will receive an increasing share of future upstream capital investment. Deepwater projects are favorably positioned, offering attractive relative returns within the asset portfolios of oil and gas companies.

Moreover, recent geopolitical events have placed an enduring emphasis on where hydrocarbon supplies are located, and the established offshore energy basins that Bristow services represent some of the most attractive and secure sources of supply.

As seen on Slide #15, offshore project final investment decisions, or FIDs, are on pace to exceed $110 billion this year, following $70 billion in 2025, which would represent a year-over-year increase of more than 60%.

The outlook for next year is another 30% increase to total FIDs of approximately $144 billion in 2027. Slide 16 shows growth in the offshore rig count and utilization levels, with the utilization rate for global floating rigs expected to reach 96% next year.

While the vast majority of Bristow's OES revenues, roughly 85%, support long-term production activities, an increase in the working number of offshore drilling rigs drives additional demand for helicopter services, and successful discoveries represent future production work.

Slide 17 contains additional information from Westwood Global Energy Group, which presents a comprehensive overview of the current global offshore energy infrastructure, including production facilities, drilling rigs, and offshore wind installations, as well as expectations for growth in the number of these offshore platforms over the next 10 years.

As you can see, these trends point to a significant increase in demand for offshore energy logistics services, supporting a positive outlook for Bristow's business.

Finally, Slide 18 is an updated look at offshore helicopter capacity from Steve Robertson at A&C Analytics. As you can see, effective utilization rates for the relevant models of heavy, super medium, and medium helicopters remain at or near full utilization.

This supply dynamic provides further context to the strong financial results that Jennifer reviewed earlier.

In conclusion, the combination of the positive offshore energy fundamentals and the tight supply of relevant offshore helicopters represents more favorable industry conditions than we've seen in more than a dozen years.

With that, let's open the line for questions. Michael?

Operator

[Operator Instructions]

The first question is from Josh Sullivan from JonesTrading.

Preguntas y respuestas

Joshua Sullivan

Just given the complexities of the aviation industry supply chain, obviously, most of it's out of your hands.

But I mean, what can you do to protect yourself from the issue while you wait for the OEMs to get their solutions in line and begin delivering on time? What can Bristow do in this time period?

Christopher Bradshaw

Yes, we are taking steps to mitigate the situation as best as possible. We have increased inventory levels. We have retained additional headcount. We're spending more on overtime.

We've added a second shift to the hangar that's working through the aircraft modification programs for those new search and rescue contracts.

Unfortunately, all those measures come at an additional cost to the company, and you're seeing the impacts of that in Bristow's Q2 and Q3 Government Services financial results, thankfully being offset by strength in other parts of the business.

In addition to those measures, on the customer side, we have made some progress in getting relief on availability issues that are not under Bristow's control related to those supply chain issues you referenced.

So you see some benefit from that in new OES contract terms.

On the government side, we've had success with our largest customer and also getting some relief on KPI penalties during this transition period, which has provided a cap on those penalties that we expect to endure at least through Q1 of 2027. So that's helped some.

The main thing, though, is really working in concert with our key suppliers to help get through this aircraft modification program and to a more normalized supply chain picture stabilized in 2027.

So we're really focused on working through that picture with them.

Joshua Sullivan

And then if we think about the balance of the dynamic between OEM new deliveries versus aftermarket parts, which is the bigger industry issue today?

Christopher Bradshaw

Yes. By far, it's really the aftermarket and the availability of parts for existing aircraft.

We have had some delays in new aircraft deliveries, as you referenced, and that's not a welcome situation, clearly, but nowhere near as impactful as the overall issues with aftermarket parts availability that we need to keep the existing fleet working and operational for our customers.

So it's really that focus on getting parts on a more timely basis.

Joshua Sullivan

And then I guess it leads into another question. Your Bristow's leadership in the advanced mobility market, upcoming flights with Electra, other partners, Data, Alroy, et cetera.

As we think about the supply chain issues with the legacy aviation industry, your diversification into the AM market and its supply chains- is that an emerging advantage?

Christopher Bradshaw

I think it could be on the margin once those aircraft are certified and operational.

Thankfully, most of those aircraft designs have less complexity and many fewer working parts. It's one of the reasons that their operating costs are expected to be dramatically lower than current-generation aircraft.

So fewer moving parts should translate into more reliable operations. So to your question, there could be a benefit there. I think overall, though, to draw out maybe a bit bigger picture, I mean, one of the main benefits that we have at Bristow is our scale and diversification.

We're having the supply chain issues we've discussed with our current suppliers. However, we are their biggest customer, really across the board. So the benefits of that scale mean that we are at the front of the line.

Unfortunately, right now, it's really just a math situation where there are not enough parts to go around.

But I think we are favorably positioned relative to the rest of the industry.

And then, importantly, on the diversification front, the number of different customers, the number of different geographies, and importantly, the number of different end markets, which is part of your original question, Josh, I think is a benefit for the overall portfolio in Bristow's business.

Operator

Our next question comes from Savanthi Syth from Raymond James.

Savanthi Syth

Could you elaborate a little bit more, maybe, Jennifer, on the ERP implementation? Just what drove the decision, what gives you the confidence around the 1-year time frame, costs that we should consider around implementation, and what you're expecting in savings?

Jennifer Whalen

Sure. The implementation will require a one-time investment, but we expect it to deliver recurring savings of several million dollars a year once it's fully in place.

Beyond the savings, the project will modernize our finance processes and systems with built-in AI and other new capabilities that will make us more efficient and better at making decisions across the organization.

And I guess to address the conference, we do expect it to go live in 2028, so a little more than a year from now, but these more modern technologies have a streamlined way of being able to get that implemented in that time.

So we have some pretty good confidence in that.

Savanthi Syth

And just on the cost drag, any way to quantify that or help us appreciate what that could be to 2027?

Jennifer Whalen

Well, we're early in the project and scoping it all out. So a little too early to give numbers yet. We will call that out as we go, but we're a little early to call out the numbers yet.

Savanthi Syth

And if I might follow up on one of Josh's questions. Can you provide like some specifics around which parts or aircraft models you're seeing the most supply chain delays?

And maybe along with that, just the comfort in meeting the government services, having that trail off here in early 2027 because it seems to be taking longer than maybe you thought last quarter.

Christopher Bradshaw

Yes, and happy to address that. I'll talk mostly about aircraft models. The list of parts really can change month-to-month or sometimes week-to-week.

But in terms of aircraft types, it is primarily in the Leonardo models. By way of a reminder, all of the new aircraft going to work on the Irish Coast Guard contract are AW189, super medium helicopters.

The majority of the aircraft for U.K. SAR 2G are AW189s and, to a lesser extent, 139s. So really, again, the Leonardo products.

In terms of what gives us some comfort on that timeline, we've spent an extensive amount of time in working sessions with them, really in Italy, on the production line as well as in our bases.

They've also come out and had joint meetings supporting us with our end customers, those government customers, which has been helpful for the end customer to hear the message directly from the OEM.

But they are making significant investments into their supply chain. As you'll be familiar, they have a complex network of subcontractors that amalgamate to form a supply chain for a given aircraft model.

They've been putting a lot of investment into those suppliers, those subcontractors, on new parts orders to help build up key inventory levels.

They're also making investments to diversify the sources of supply. To give you maybe just one case study or example there, the wind screens, so these are literally the windshields for the aircraft.

The industry has really been too concentrated in a single-source supplier there that's had issues, both from timing and then quality control.

And so one thing that Leonardo has done is made an investment to put a second source of supply in business and actually now, after that, a third to help provide some better resiliency into that key component.

And then overall, we think the incentives are in place to get this fixed and normalized. As a reminder, the same aircraft that we're ordering from Leonardo, who, by the way, is a key player in the European military-industrial complex, are the same aircraft models that European militaries are reliant upon for their defense posture against geopolitical threats.

So we think all the incentives are aligned to get this fixed and to a more stable situation. It's just unfortunately not going to happen overnight.

Based upon all those discussions and steps that I mentioned, our best information at this time is that we should be at a more stabilized position by the end of Q1 2027.

Savanthi Syth

And just a clarification, just on the OES side, if you get more demand, does that come from higher utilization of the existing fleet? Or is that through further deliveries?

Christopher Bradshaw

So we do have a high effective utilization rate for Bristow's fleet, similar to the broader industry stats that were summarized in the presentation materials.

However, we do have some available aircraft. For example, we have some S-92s that we're moving out of the North Sea, which is a more mature market, into markets like Africa and the Americas to meet customer demand and growth there.

We are also taking delivery of new super medium aircraft. As a reminder, we had 7 of those on order. Really, none of those have contributed meaningfully to reported financials to date. So that's all still to come.

We are one of the few operators with an order book and the ability to meet that incremental customer demand. So that will provide growth as we look at 2027 and beyond.

And then I guess the final note there is, as Jennifer referenced, 2027, we'll see more of the full period benefit of the contract rate resets that have occurred during calendar '26.

Operator

Our next question comes from Alex Rygiel from Texas Capital.

Alexander Rygiel

Regarding your comments about additional OES demand, do the current supply chain challenges place Bristow opportunities in the OES space at risk at all?

Christopher Bradshaw

They certainly could if it impacts our ongoing aircraft availability levels. However, we are managing through that as best as possible.

As noted, we have also achieved some better contractual terms, which have carved out risk and penalties for us on certain of those availability issues that are beyond our control because of the supply chain issues.

But overall, yes, it does present risk. I would note, though, it also presents opportunity to the extent that the supply chain improvements are realized going forward.

It frees up quite a bit of what's been hampering the company's performance to date, and that really opens us up for even better performance moving forward.

Alexander Rygiel

And then can you speak to the special missions business? How is it tracking to initial expectations, and comment on any kind of integration that's occurring right now?

Jennifer Whalen

Sure. As far as where it's tracking, it's on track to perform for 2026. We highlighted some of that in the prepared remarks where it did contribute this quarter, and it's moving as expected. We do expect that to accelerate in 2027.

The business is doing well and has more opportunities now than it had to date. And then as far as the integration piece goes, because BSM is a fixed-wing business, its operations do not overlap too much with the helicopter business.

So we were always expecting limited operational integration, but the back office integration is progressing well with no meaningful issues to date.

Operator

Our next question comes from Steve Silver from Argus.

Steven Silver

First of all, can you talk a little bit about the composition of the current fleet after the recent sale-leasebacks and periodic aircraft sales over time?

And just your current thinking around when you're expecting the remaining aircraft on your order book to be delivered?

Christopher Bradshaw

Sure. I'll take the first part of that, Steve.

In terms of the composition of the current fleet, we think Bristow remains very competitive with the aircraft models that we have and the new additions to the fleet, which include those new-generation super medium aircraft principally.

So a good balance on the heavy and super medium model mix, also on the medium side with the largest operating fleet of AW139s, which is really the category leader in the medium space around the world, recently supplemented by the addition of a new H160 model from Airbus into that medium category.

So overall, we continue to think we have a very competitive fleet, the right mix of aircraft to meet customer demand. And Jennifer, do you want to touch on timing?

Jennifer Whalen

Sure. So we have 2 aircraft left in our order book; they're AW189s, and we do expect one this month and the other one in 2027.

We also hold options for more aircraft, and we would exercise them only if customer demand supports it and the commercial terms were right. And any of those aircraft that were ordered under those options will be delivered at a later date.

Steven Silver

And you just mentioned special missions expected to accelerate growth in Q4 and in 2027.

Just curious as to whether there are any particular catalysts or projects worth calling out there?

Christopher Bradshaw

Yes. Happy to address that. And I guess as a preface, we're really happy with how that business is performing to date.

When you do an acquisition, as much diligence as you do upfront, you never really know exactly what you're buying until you are on the inside. And we've been really pleased to date with what we've seen: the performance of the business to date and the outlook both for Q4 and 2027.

In terms of opportunities, starting first on the other category, their on-demand cargo business, or ODC business, is really performing well, above expectations.

And so long as supply chain issues exist and geopolitical tensions strain trade routes, we think the tailwinds for that ODC on-demand cargo business will continue to be good.

Then, more on the special missions basis, what we're seeing really is an opportunity set, whether it's on intelligence, surveillance and reconnaissance or ISR missions or troop movements that looks ripe for growth if capital is available.

So, over the last few years, they've had limited ability to add aircraft to their fleet to pursue some of those growth opportunities.

I think with our support, looking at bringing in some more leased aircraft, potentially some owned aircraft, there's going to be more of an opportunity to capture growth in that mission profile likely throughout the Americas as well as other areas outside the Continental United States.

Steven Silver

And one more for me. So free cash flow was solid in the quarter. Share repurchases picked up quite a bit in Q3.

So I'm just curious, I mean, the company has stated consistently that the goal was to be opportunistic on share repurchases.

But I was wondering if you could expand a little bit on maybe the timing of the activity this quarter and really your current thinking on capital allocation, trying to balance additional share repurchases and debt reduction.

Jennifer Whalen

Sure. As you noted, our share repurchases are done on an opportunistic basis. We hadn't done as many of those up to date because of a lot of reasons that we've discussed in the past.

We had a big capital investment in aircraft related to the U.K. SAR 2G contract and the Irish Coast Guard contract.

Those have largely completed, and we were able to deploy capital to expand our government services business with the purchase of BSM, investing in the fleet on the OES side with the new purchases of AW189s that will go to work for customers.

Again, share repurchases, the $25 million we did this quarter, again, it is done on an opportunistic basis. We're not doing it programmatically as we move along.

And we are consistently working through our dividend program and continuing to declare dividends on a quarterly basis.

Operator

Our final question today is from Colby Sasso from Daniel Energy Partners.

Colby Sasso

Can you expand on the key drivers behind the updates on the guidance ranges, noting the midpoint was affirmed?

And what risks or opportunities do you see for the remainder of the year?

Christopher Bradshaw

Yes. First, we were pleased to reaffirm the adjusted EBITDA midpoint for full year 2026, which I think is a testament to the significant diversity that we have in the business from an end market, customer and geographic standpoint. So happy to be able to reaffirm that.

In terms of some of the drivers on some of the range changes, first, on the Government Services side, really the supply chain issues that we've talked about during the call would be the primary one.

And then on the OES side, those changes were really supported by the strong industry fundamentals and the tight supply-demand dynamic that exists with relevant offshore helicopter models globally.

In terms of risks, certainly, geopolitical developments, the macro side with the commodity price, anything there is always a risk that we'll be exposed to.

Foreign exchange rates are another one that can impact our business, particularly with the big government contracts where we are paid in the local currency under those particular contracts.

And then on the opportunities front, I think supply chain, which has obviously been a big hindrance to the business recently to the extent that those issues do stabilize, that will be an opportunity to free up aircraft in the business for better performance.

Colby Sasso

And as a follow-up, looking at the utilization levels you highlighted earlier on Slide 18, if these aircrafts are effectively fully utilized and contracted out, how are you thinking about picking up any incremental ad hoc short-term exploration work in 2027?

Christopher Bradshaw

Yes. And thank you for the question. I appreciate the opportunity to clarify that.

The information on Slide 18 is really industry-wide data that comes from a third-party source, which we think does the best job of tracking industry data on this metric.

For Bristow, overall, our fleet is similarly positioned.

However, there are some differences. For example, we do have some available S-92s that we will move out of the North Sea, which is a more mature market, into some other markets where there is additional demand from customers in places like Africa and the Americas.

So we'll be able to meet that growth and their demand there. We do also have the new deliveries that we spoke about, those new super mediums coming into the fleet, which really haven't contributed meaningfully to reported financials to date, but they have now mostly been delivered.

As those go to work, that will drive growth for us and meet demand for our customers. And we're one of the few operators who actually does have an order book and the ability to bring in those aircraft.

Then beyond that, as we think about part of your original question, which relates to short-term drilling exploration opportunities, we do have the ability to share aircraft to support ad hoc and short-term work with aircraft that might be under other contracts, but we can use available flight hour capacity to support additional customers as well.

Operator

This concludes our question-and-answer session. I'll now turn the call back over to Chris Bradshaw for closing remarks.

Christopher Bradshaw

Thank you, Michael, and thanks, everyone, for joining the call on what's, I guess, been a slow couple of news days. We appreciate the interest.

We look forward to speaking again next quarter. In the meantime, stay safe and well.

Operator

This concludes today's call. You may now disconnect at any time.