Total Energy Services (TOT) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 financial results, driven by stable Canadian and Australian markets, strong North American demand for compression/process equipment, and the Saxon Energy Services acquisition, which offset lower U.S. drilling activity.

• Saxon Energy Services Australia acquisition contributed $19.2 million in Q2 revenue and expanded Australian operations.

Financial highlights

• Q2 2024 consolidated revenue increased 2% year-over-year to $213.3 million; EBITDA rose 24% to $37.4 million; consolidated margin improved to 23% from 19% in Q2 2023.

• Q2 net income surged 150% year-over-year to $15.5 million; diluted EPS for Q2 was $0.39, up from $0.15 last year.

• Positive working capital of $71.8 million at June 30, 2024, including $24.8 million in cash and $85 million available credit.

• Senior bank debt to EBITDA ratio at 0.45; interest coverage ratio at 10.17x (excluding non-recurring interest expense).

Outlook and guidance

• Optimistic for H2 2024, with Australian business growth, integration synergies from Saxon, and several rigs reactivated or commencing operations under long-term contracts.

• Strong CPS fabrication sales backlog exceeding $200 million, providing visibility into Q1 2025.

• Expectation of significant free cash flow generation for the remainder of 2024.