Ensign Energy Services (ESI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $391.8 million, down 9% year-over-year; six-month revenue was $823.1 million, down 10% year-over-year.

• Adjusted EBITDA for Q2 2024 was $100.2 million, a 14% decrease year-over-year; six-month Adjusted EBITDA was $217.7 million, down 11%.

• Net loss attributable to common shareholders was $4.5 million in Q2 2024, compared to net income of $10.3 million in Q2 2023.

• Funds flow from operations in Q2 2024 was $98.3 million, down 16% year-over-year; six-month funds flow was $206.7 million, down 12%.

• Operating days and activity declined in the US due to customer M&A and capital discipline, while Canadian activity increased following the Trans Mountain Pipeline expansion.

Financial highlights

• Q2 2024 revenue: $391.8 million (down 9%); six months: $823.1 million (down 10%).

• Adjusted EBITDA Q2: $100.2 million (down 14%); six months: $217.7 million (down 11%).

• Net loss Q2: $4.5 million; six months: $5.8 million.

• Cash from operations Q2: $126.4 million (down 24%); six months: $220.3 million (down 19%).

• Total debt, net of cash, as of June 30, 2024: $1.12 billion, down from $1.28 billion a year ago.

Outlook and guidance

• Canadian rig demand expected to remain strong, with nearly 90% of the active fleet contracted through Q1 2025 and rate increases anticipated into the winter drilling season.

• U.S. market activity expected to remain flat through 2024, with improvement anticipated in early to mid-2025 as M&A integration stabilizes.

• Global oilfield services outlook remains constructive, with steady demand and OPEC+ supply discipline.

• 2024 capital expenditures budgeted at $147 million, mainly for maintenance and selective growth.

• Debt reduction target of $600 million by end of 2025 remains on track, supported by strong free cash flow and asset sales.