Several months on from taking up the reins at Tidewater, John T Rynd shares his views on the vagaries of the market, what makes for successful leadership and a profitable company, and the future of the sector.
Tidewater emerged from bankruptcy in 2017 following a successful financial restructuring, at which point president, chief executive and director Jeffrey M Platt announced his retirement and Larry T. Rigdon stepped into an interim leadership position.
In March 2018, John T. Rynd joined the company, taking on the three roles previously held by Mr Platt. A few months later in July, a planned merger with Gulfmark Offshore, worth roughly US$1.25Bn, was announced, which would result in the creation of the world’s largest OSV fleet.
Mr Rynd’s decision to join Tidewater was predicated on a number of factors: “First and foremost after coming out of the restructuring the balance sheet was, and continues to be, in excellent shape,” he said, noting that the company is currently debt negative. The company’s assets, with an average age of less than nine years, were another draw, explained Mr Rynd: “The asset base is young and deployed around the world in the appropriate areas where drilling and production activity is taking place and will continue to take place.” Finally, there was the current state of the offshore cycle, which Mr Rynd believes is now on the up.
The three pillars of Mr Rynd’s leadership style are communication, dedication and leading by example. Transparent communication prevents rumours developing and uncertainty setting in: “99.9% of people want to be part of something successful and if you can communicate with them and direct them in the area where they can help make the company successful you are going to be successful.”
In terms of leading by example, Mr Rynd says simply: “If you are asking your employees to do something you’d darn well better be doing it as well.”
While Mr Rynd has worked under “some very very good leaders”, with a range of unique styles, he explained they had in common the fact that they understood the direction they wanted their companies to go in: “They put the right people in place to get the job done; and they communicated their vision and strategy very succinctly and often.”
The offshore support sector is dependent upon market conditions and the business cycle and Mr Rynd noted that “no matter how well you run [the business], how new your assets are, and how appropriately placed they are around the world, if the market is on the bottom you are not going to be profitable.”
Get all these pieces into place and the final element in the jigsaw is a dedicated, enthused and motivated workforce with a clear understanding of the company’s mission, he explained. “A successful, profitable company must provide a superior, safe and reliable service to customers, and focus on efficiencies. Say what you are going to do and do it, on a continual basis,” he added.
While the industry is coming off the bottom of the cycle, there remains significant oversupply in the OSV market and Mr Rynd noted that Tidewater has sold 33 vessels recently, with 23 of those being scrapped. “I think that there is still a lot of leverage across the industry that has to be dealt with in one form or fashion to really get this industry back to health.
“Aside from a good cycle, people’s balance sheets have got to put them in a position where they can be successful and not be working for the banks.”
Discussing the Gulfmark merger, Mr Rynd noted that by combining two companies it is possible to drive significant cost savings throughout the organisation, which can improve value among shareholders. In terms of further investment, there is nothing currently in the works, but Mr Rynd said Tidewater will continue to evaluate potential opportunities worldwide, “whether that is picking up some stranded assets from a distressed owner or further corporate M&A.”
In order to sustain the sector’s recovery, Mr Rynd is hoping for oil price stability. When customers evaluate drilling opportunities they want to feel comfortable that there will not be wild swings either down or up, he noted. “With that stability I think that we have seen the early phases of an offshore recovery,” he said, adding that he anticipates that 2019 will be much like 2018. “Activity is slowly but surely improving around the world at a measured pace.” If the oil price remains stable “we could be setting ourselves up for a nice run,” he said, adding: “If the oil prices collapses then all bets are off.”
In terms of digitalisation, Tidewater is concentrating on and investing in predictive maintenance. The focus is on determinignn what information to gather and also how best to use this information to increase reliability and drive down maintenance costs. By doing so, Tidewater will be able to maximise the up-time provided to customers and cement its reputation as a reliable supplier.
The company does not currently employ battery-on-board hybrid technology, but Tidewater is evaluating this technology and monitoring its performance to establish the return on investment it could generate. Tidewater already uses low-sulphur diesel so is not investing in scrubbers or similar technology, said Mr Rynd. “I don’t see at this point getting away from the internal combustion engine,” he added, although he does believe it is possible to get cleaner-burning, more fuel-efficient engines and to use battery technology to provide peak savings as a near-term focus.
“All told, I think that the industry does a very good job providing a service to our clients around the world in a very safe and efficient manner, and I am proud to be in this space,” he added.
John T Rynd, the newly appointed CEO at Tidewater will discuss the company's recent restructuring on day two of the annual Offshore Support Journal Conference, Awards & Exhibition in London 6-7 February 2019. Book your place at the conference here.