Source Energy Services Ltd (SCEYF) Q3 2024 Earnings Call Highlights: Record Sand Volumes and ...

GuruFocus News
4 min read

In This Article:

  • Sand Volumes: 964,000 metric tonnes, a record for Source.

  • Sand Revenue: $142.2 million, a $40 million increase from Q3 2023.

  • Total Revenue: $183.1 million, a $54.8 million increase from Q3 2023.

  • Gross Margin: $33.7 million.

  • Adjusted Gross Margin: $43.3 million, a 41% increase from Q3 2023.

  • Net Income: $10.2 million.

  • Adjusted EBITDA: $35.3 million, a 55% improvement from Q3 2023.

  • Free Cash Flow: $20.1 million, an increase of $12.7 million compared to last year.

  • Year-to-Date Free Cash Flow: $49.1 million, $21 million ahead of the first 9 months of 2023.

  • Wellsite Revenues: $39.9 million, an increase of $18.2 million or 84% compared to Q3 2023.

  • Last Mile Solutions Trucking Volumes: Increased 70% compared to Q3 2023.

  • Terminal Service Revenue: $0.9 million, an increase of $0.1 million compared to Q3 2023.

  • Cost of Sales (Excluding Depreciation): Increased by $45.9 million compared to Q3 2023.

  • Operating General and Admin Expenses: Increased by $1.6 million compared to Q3 2023.

  • Finance Expense: $8.2 million, a decrease of $0.6 million from Q3 2023.

  • Senior Secured Note Balance: $140.5 million at the end of September.

  • ABL Facility Drawn: $13.6 million.

  • Net Working Capital Surplus: $57.6 million.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Source Energy Services Ltd (SCEYF) reported a record third consecutive quarter in sand volumes, total revenues, and EBITDA.

  • The company achieved an 83% utilization rate on its Sahara fleet, indicating strong operational efficiency.

  • Source Energy Services Ltd (SCEYF) successfully acquired sand trucking assets from the PVT Group, enhancing its last-mile logistics capabilities.

  • The company reported a significant increase in sand revenue, up by $40 million from the third quarter of 2023.

  • Free cash flow for the third quarter was $20.1 million, marking a $12.7 million increase compared to the previous year.

Negative Points

  • The weakening Canadian dollar negatively impacted gross margins due to higher U.S. denominated costs.

  • Cost of sales increased by $45.9 million compared to the third quarter of 2023, driven by higher sales volumes and rail costs.

  • Operating general and administrative expenses rose by $1.6 million, primarily due to increased compensation and royalty costs.

  • The company is facing upcoming maturities of both its notes and ABL facility, necessitating refinancing efforts.

  • Adjusted gross margin per metric tonne slightly decreased compared to the same period last year, impacted by extreme heat affecting rail transportation.

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