Total Energy Services Inc (TOTZF) Q3 2024 Earnings Call Highlights: Record Revenue Growth and ...

GuruFocus News
4 min read

In This Article:

  • Consolidated Revenue: 4% increase compared to Q3 2023.

  • EBITDA: 12% increase in Q3 2024 compared to Q3 2023.

  • Geographical Revenue Distribution: 49% Canada, 34% United States, 17% Australia.

  • Gross Margin: 26% in Q3 2024, up from 24% in Q3 2023.

  • CD Segment Revenue: 14% increase in Q3 2024.

  • Australian Operating Days: 93% increase following acquisition of Saxon.

  • CP Segment EBITDA: 34% year-over-year increase in Q3 2024.

  • Well Servicing Revenue: 5% increase in Q3 2024 compared to Q3 2023.

  • Working Capital: $97.3 million as of September 30, 2024.

  • Cash on Hand: $61.9 million as of September 30, 2024.

  • Capital Expenditures: Projected 2024 capital expenditures total $147.7 million.

  • Shareholder Returns: $8.7 million returned via dividends and share buybacks in Q3 2024.

Release Date: November 07, 2024

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

Positive Points

  • Total Energy Services Inc (TOTZF) reported record quarterly financial results for Q3 2024, with a 4% increase in consolidated revenue compared to Q3 2023.

  • The acquisition of Saxon Energy Services significantly boosted operations in Australia, leading to a 93% increase in operating days and a 42% year-over-year increase in Australian revenue per operating day.

  • The company demonstrated effective cost management across all segments, contributing to a 12% increase in EBITA compared to the previous year.

  • Total Energy Services Inc (TOTZF) maintained a strong financial position with $97.3 million in positive working capital, including $61.9 million in cash.

  • The CPS segment experienced a 34% year-over-year increase in EBITA, driven by increased rental fleet utilization and improved fabrication sales margins.

Negative Points

  • Total Energy Services Inc (TOTZF) faced a year-over-year decline in U.S. drilling and completion activity, impacting overall revenue.

  • The Canadian CD segment saw a 5% decrease in revenue due to a 7% decline in operating days, partially offset by a 2% increase in revenue per day.

  • The U.S. market remains highly competitive, with pricing pressures affecting the drilling and well servicing segments.

  • A damaged drilling rig in Canada negatively impacted operating days and revenue during Q3 2024.

  • The well servicing segment experienced a 2% decrease in EBITA and a 5% decrease in EBITA margin due to lower activity in the U.S. and reactivation costs in Australia.

Q & A Highlights

Q: Can you provide insights into the increased activity and investment in Australia? Is there a specific play driving this growth? A: The increased activity in Australia is primarily due to a shortage of gas and a shift in the federal government's policy to promote natural gas development. This change has encouraged production and investment, particularly in onshore natural gas, which is part of the Asian LNG story. Our acquisition of Saxon has also positioned us well to capitalize on these opportunities. (Daniel Halyk, President & CEO)

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