Calfrac Well Services (CFW) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw sequential improvement in revenue and Adjusted EBITDA, driven by increased North American utilization and strong results in Argentina, despite lower commodity prices year-over-year.

• Investments in new sand hauling units, transload facilities, and strategic capital in Argentina enabled record proppant pumping, coil tubing performance, and expansion in Vaca Muerta.

• Ongoing modernization with 49 Tier 4 DGB pumps and a focus on safety led to a reduced TRIF rate from 0.87 to 0.77.

Financial highlights

• Q2 2024 revenue was CAD 426 million, down 9% year-over-year, but up 29% sequentially from Q1 2024.

• Adjusted EBITDA was CAD 65.4 million, a 26% decline year-over-year, but up over CAD 39 million sequentially.

• Net income from continuing operations was CAD 24.6 million, down from CAD 50.5 million year-over-year, but up CAD 27.5 million from Q1.

• Capital expenditures reached CAD 66.8 million, mainly for Tier 4 fleet upgrades and Argentina investments, up 117% year-over-year.

• Working capital was approximately CAD 304 million, including CAD 43.7 million in cash (CAD 40 million in Argentina).

Outlook and guidance

• Second half of 2024 expected to be in line with the first half, with typical year-end weather interruptions and customer budget exhaustion as variables.

• Argentina operations are expanding, with strong demand and additional capital deployment planned, including $29M for Vaca Muerta.

• Full-year 2024 CapEx guidance is around CAD 200 million, with a significant portion allocated to Argentina.

• Lower capital expenditures anticipated for North America in H2 2024 as 70% of the segment's budget was spent in H1.