• Consolidated Revenue: 2% increase compared to Q2 2023.

• EBITDA: 24% increase compared to Q2 2023.

• Geographical Revenue Distribution: 46% United States, 36% Canada, 18% Australia.

• Segment Revenue Contribution: CPS 51%, Drilling 32%, Well Servicing 9%, RTS 8%.

• Consolidated Margin: 23%, up from 19% in Q2 2023.

• CDS Segment Revenue Increase: 25% compared to Q2 2023.

• CDS Segment EBITDA Increase: 47% compared to Q2 2023.

• Australian Revenue per Operating Day: 32% year-over-year increase.

• CPS Segment EBITDA Increase: 42% year-over-year.

• EBITDA Margin Increase: 508 basis points in CPS segment.

• Fabrication Sales Backlog: CAD204.6 million, up from CAD185.6 million at June 30, 2023.

• Working Capital: CAD71.8 million, including CAD24.8 million cash.

• Senior Bank Debt to EBITDA Ratio: 0.45.

• Bank Interest Coverage Ratio: 10.7 times, excluding non-recurring interest expense.

• Capital Expenditures: CAD50.3 million funded by June 30, 2024.

• Share Buybacks: CAD12 million in Q2 2024.

• Debt Repayment: CAD10.5 million in Q2 2024.

• Dividends: CAD3.6 million in Q2 2024.

• TRIF: 0.96, first time below one since 2008.

• Warning! GuruFocus has detected 7 Warning Signs with AMRX.

Release Date: August 09, 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 second quarter financial results for 2024, with a 2% increase in consolidated revenue compared to Q2 2023.

• The acquisition of Saxon Energy Services in March 2024 significantly boosted operations in Australia, leading to a more than doubling of second quarter operating days.

• The CPS segment saw a 42% year-over-year increase in second quarter EBITDA, driven by increased rental fleet utilization and improved fabrication sales margins.

• The company's financial position remains strong with CAD71.8 million of positive working capital and a low senior bank debt to bank EBITDA ratio of 0.45.

• Total Energy Services Inc (TOTZF) achieved a significant safety milestone with a consolidated rolling 12-month total recordable incident frequency of less than one for the first time since 2008.

Negative Points

• There was a year-over-year decline in US drilling and completion activity, impacting overall performance.

• Second quarter revenue in the RTS segment decreased compared to Q2 2023 due to lower industry activity in the US.

• Well Servicing segment utilization decreased by 20% compared to the prior year quarter, leading to a 16% decrease in segment revenue and a 27% decrease in segment EBITDA.

• Working capital decreased from December 31, 2023, as CAD42 million of mortgage debt became current during the second quarter of 2024.

• Despite strong demand for compression and process equipment, weak North American natural gas spot prices pose a challenge.