CALGARY, Alberta, March 07, 2024 (GLOBE NEWSWIRE) -- Total Energy Services Inc. ("Total Energy" or the "Company") (TSX:TOT) announces its consolidated financial results for the three months and year ended December 31, 2023.
Financial Highlights
($000's except per share data)
| Three months ended December 31 | Year ended December 31 | |||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||
| Revenue | $ | 213,758 | $ | 211,479 | 1 | % | $ | 892,396 | $ | 759,813 | 17 | % | ||
| Operating income | 23,510 | 15,605 | 51 | % | 84,622 | 49,343 | 71 | % | ||||||
| EBITDA(1) | 45,276 | 35,872 | 26 | % | 168,961 | 131,320 | 29 | % | ||||||
| Cashflow | 44,457 | 38,590 | 15 | % | 163,321 | 130,795 | 25 | % | ||||||
| Net income (loss) | (7,861 | ) | 12,264 | nm | 41,594 | 37,999 | 9 | % | ||||||
| Attributable to shareholders | (7,847 | ) | 12,244 | nm | 41,625 | 38,008 | 10 | % | ||||||
| Per Share Data (Diluted) | ||||||||||||||
| EBITDA(1) | $ | 1.11 | $ | 0.84 | 32 | % | $ | 4.11 | $ | 3.06 | 34 | % | ||
| Cashflow | $ | 1.09 | $ | 0.91 | 20 | % | $ | 3.97 | $ | 3.04 | 31 | % | ||
| Attributable to shareholders: | ||||||||||||||
| Net income (loss) | $ | (0.19 | ) | $ | 0.29 | nm | $ | 1.01 | $ | 0.88 | 15 | % | ||
| Common shares (000's)(4) | ||||||||||||||
| Basic | 39,975 | 41,652 | (4 | %) | 40,409 | 42,216 | (4 | %) | ||||||
| Diluted | 40,623 | 42,524 | (4 | %) | 41,147 | 42,980 | (4 | %) | ||||||
| December 31 | December 31 | |||||||||||||
| Financial Position at | 2023 | 2022 | Change | |||||||||||
| Total Assets | $ | 861,658 | $ | 878,615 | (2 | %) | ||||||||
| Long-Term Debt and Lease Liabilities (excluding current portion) | 100,834 | 127,628 | (21 | %) | ||||||||||
| Working Capital(2) | 123,439 | 112,154 | 10 | % | ||||||||||
| Net Debt(3) | - | 15,474 | (100 | %) | ||||||||||
| Shareholders' Equity | 530,758 | 522,023 | 2 | % | ||||||||||
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
nm - calculation not meaningful
Total Energy's results for the fourth quarter and year ended December 31, 2023 reflect continued stable industry conditions. North American market share gains resulting from equipment upgrades and modestly improved pricing contributed to improved fourth quarter results in 2023 as compared to 2022. Fourth quarter Australian revenue was lower compared to the prior year due to lower service rig activity. $16.2 million of non-recurring income tax expense and $10.6 million of related interest and penalties were recorded in the fourth quarter of 2023 as a result of a Tax Court of Canada ruling upholding Canada Revenue Agency reassessments related to the Company's 2009 income trust conversion. Despite the $26.8 million reduction in net income resulting from this reassessment, Total Energy achieved record consolidated financial results for 2023.
Contract Drilling Services ("CDS")
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||
| Revenue | $ | 74,700 | $ | 69,185 | 8 | % | $ | 287,333 | $ | 252,663 | 14 | % | ||||
| EBITDA(1) | $ | 23,880 | $ | 17,976 | 33 | % | $ | 75,710 | $ | 60,002 | 26 | % | ||||
| EBITDA(1) as a % of revenue | 32 | % | 26 | % | 23 | % | 26 | % | 24 | % | 8 | % | ||||
| Operating days(2) | 2,588 | 2,600 | - | 10,311 | 10,485 | (2 | %) | |||||||||
| Canada | 1,890 | 1,588 | 19 | % | 6,913 | 6,263 | 10 | % | ||||||||
| United States | 356 | 689 | (48 | %) | 2,052 | 2,734 | (25 | %) | ||||||||
| Australia | 342 | 323 | 6 | % | 1,346 | 1,488 | (10 | %) | ||||||||
| Revenue per operating day(2), dollars | $ | 28,864 | $ | 26,610 | 8 | % | $ | 27,867 | $ | 24,098 | 16 | % | ||||
| Canada | 27,162 | 24,751 | 10 | % | 26,076 | 22,369 | 17 | % | ||||||||
| United States | 30,483 | 28,270 | 8 | % | 28,700 | 25,126 | 14 | % | ||||||||
| Australia | 36,582 | 32,207 | 14 | % | 35,791 | 29,484 | 21 | % | ||||||||
| Utilization | 30 | % | 30 | % | - | 30 | % | 30 | % | - | ||||||
| Canada | 27 | % | 22 | % | 23 | % | 25 | % | 22 | % | 14 | % | ||||
| United States | 32 | % | 58 | % | (45 | %) | 47 | % | 58 | % | (19 | %) | ||||
| Australia | 74 | % | 70 | % | 6 | % | 74 | % | 82 | % | (10 | %) | ||||
| Rigs, average for period | 94 | 94 | - | 94 | 94 | - | ||||||||||
| Canada | 77 | 76 | 1 | % | 77 | 76 | 1 | % | ||||||||
| United States | 12 | 13 | (8 | %) | 12 | 13 | (8 | %) | ||||||||
| Australia | 5 | 5 | - | 5 | 5 | - | ||||||||||
| (1) | See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. |
| (2) | Operating days includes drilling and paid standby days. |
CDS segment revenue during the fourth quarter of 2023 was higher compared with the previous year quarter due to increased revenue per operating day arising from the deployment of upgraded equipment. Negatively impacting utilization in the United States was the transfer of a triple drilling rig to Canada during the second quarter of 2023 and a general slowdown in industry activity, which was partially offset by higher pricing due in part to the mix of equipment operating. Higher utilization following the return to service of an upgraded drilling rig combined with higher revenue per operating day due to rate increases arising from rig upgrades and fewer standby days due to wet weather in 2023 compared to 2022 contributed to improved year over year fourth quarter results in Australia.
Rentals and Transportation Services ("RTS")
| Three months ended December 31 | Year ended December 31 | ||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||
| Revenue | $ | 19,544 | $ | 20,043 | (2 | %) | $ | 84,906 | $ | 66,954 | 27 | % | |||||||||
| EBITDA(1) | $ | 6,927 | $ | 6,171 | 12 | % | $ | 30,904 | $ | 23,361 | 32 | % | |||||||||
| EBITDA(1) as a % of revenue | 35 | % | 31 | % | 13 | % | 36 | % | 35 | % | 3 | % | |||||||||
| Revenue per utilized piece of equipment, dollars | $ | 14,139 | $ | 12,483 | 13 | % | $ | 55,041 | $ | 44,376 | 24 | % | |||||||||
| Pieces of rental equipment | 7,700 | 9,440 | (18 | %) | 7,700 | 9,440 | (18 | %) | |||||||||||||
| Canada | 6,790 | 8,540 | (20 | %) | 6,790 | 8,540 | (20 | %) | |||||||||||||
| United States | 910 | 900 | 1 | % | 910 | 900 | 1 | % | |||||||||||||
| Rental equipment utilization | 18 | % | 18 | % | - | 18 | % | 16 | % | 13 | % | ||||||||||
| Canada | 16 | % | 16 | % | - | 16 | % | 15 | % | 7 | % | ||||||||||
| United States | 33 | % | 33 | % | - | 35 | % | 29 | % | 21 | % | ||||||||||
| Heavy trucks | 67 | 71 | (6 | %) | 67 | 71 | (6 | %) | |||||||||||||
| Canada | 46 | 48 | (4 | %) | 46 | 48 | (4 | %) | |||||||||||||
| United States | 21 | 23 | (9 | %) | 21 | 23 | (9 | %) | |||||||||||||
| (1) | See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. |
Fourth quarter revenue in the RTS segment decreased marginally as compared to the same period in 2022 due to the deferral of certain projects in Canada that was partially offset by market share gains in the United States. Higher year over year fourth quarter EBITDA and EBITDA margin was due to improved revenue per utilized piece of equipment. A significant number of underutilized rental pieces were disposed of in Canada during 2023.
Compression and Process Services ("CPS")
| Three months ended December 31 | Year ended December 31 | ||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||
| Revenue | $ | 95,439 | $ | 93,668 | 2 | % | $ | 417,646 | $ | 331,669 | 26 | % | |||||||||
| EBITDA(1) | $ | 14,074 | $ | 10,771 | 31 | % | $ | 53,817 | $ | 36,933 | 46 | % | |||||||||
| EBITDA(1) as a % of revenue | 15 | % | 11 | % | 36 | % | 13 | % | 11 | % | 18 | % | |||||||||
| Horsepower of equipment on rent at period end | 39,496 | 41,243 | (4 | %) | 39,496 | 41,243 | (4 | %) | |||||||||||||
| Canada | 13,856 | 18,768 | (26 | %) | 13,856 | 18,768 | (26 | %) | |||||||||||||
| United States | 25,640 | 22,475 | 14 | % | 25,640 | 22,475 | 14 | % | |||||||||||||
| Rental equipment utilization during the period (HP)(2) | 67 | % | 75 | % | (11 | %) | 73 | % | 61 | % | 20 | % | |||||||||
| Canada | 76 | % | 66 | % | 15 | % | 77 | % | 47 | % | 64 | % | |||||||||
| United States | 61 | % | 84 | % | (27 | %) | 70 | % | 79 | % | (11 | %) | |||||||||
| Sales backlog at period end, $ million | $ | 162.8 | $ | 219.5 | (26 | %) | $ | 162.8 | $ | 219.5 | (26 | %) | |||||||||
| (1) | See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. |
| (2) | Rental equipment utilization is measured on a horsepower basis. |
The year over year increase in the CPS segment's fourth quarter revenue was due primarily to higher United States fabrication sales, increased equipment overhaul activity and improved utilization of the Canadian compression rental fleet. EBITDA and EBITDA margin increased due to improved fabrication sales margins and a greater relative revenue contribution from the higher margin parts and service business. The fabrication sales backlog decreased to $162.8 million compared to the $219.5 million backlog at December 31, 2022. Sequentially, the quarter end backlog increased by $9.9 million from September 30, 2023.
Well Servicing ("WS")
| Three months ended December 31 | Year ended December 31 | ||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||
| Revenue | $ | 24,075 | $ | 28,583 | (16 | %) | $ | 102,511 | $ | 108,527 | (6 | %) | |||||||||
| EBITDA (1) | $ | 3,997 | $ | 6,222 | (36 | %) | $ | 19,833 | $ | 23,395 | (15 | %) | |||||||||
| EBITDA (1) as a % of revenue | 17 | % | 22 | % | (23 | %) | 19 | % | 22 | % | (14 | %) | |||||||||
| Service hours(2) | 24,631 | 29,566 | (17 | %) | 106,551 | 117,306 | (9 | %) | |||||||||||||
| Canada | 13,293 | 14,460 | (8 | %) | 52,281 | 57,123 | (8 | %) | |||||||||||||
| United States | 4,707 | 5,374 | (12 | %) | 23,488 | 19,157 | 23 | % | |||||||||||||
| Australia | 6,631 | 9,732 | (32 | %) | 30,782 | 41,026 | (25 | %) | |||||||||||||
| Revenue per service hour(2), dollars | $ | 977 | $ | 967 | 1 | % | $ | 962 | $ | 925 | 4 | % | |||||||||
| Canada | 931 | 960 | (3 | %) | 949 | 918 | 3 | % | |||||||||||||
| United States | 924 | 955 | (3 | %) | 969 | 899 | 8 | % | |||||||||||||
| Australia | 1,109 | 983 | 13 | % | 980 | 948 | 3 | % | |||||||||||||
| Utilization(3) | 29 | % | 33 | % | (13 | %) | 31 | % | 32 | % | (3 | %) | |||||||||
| Canada | 26 | % | 28 | % | (7 | %) | 26 | % | 27 | % | (4 | %) | |||||||||
| United States | 47 | % | 53 | % | (11 | %) | 59 | % | 48 | % | 23 | % | |||||||||
| Australia | 25 | % | 37 | % | (32 | %) | 29 | % | 39 | % | (26 | %) | |||||||||
| Rigs, average for period | 79 | 79 | - | 79 | 79 | - | |||||||||||||||
| Canada | 56 | 56 | - | 56 | 56 | - | |||||||||||||||
| United States | 11 | 11 | - | 11 | 11 | - | |||||||||||||||
| Australia | 12 | 12 | - | 12 | 12 | - | |||||||||||||||
| (1) | See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. |
| (2) | Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby. |
| (3) | The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company's service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations. |
Fourth quarter Canadian activity in the WS segment was negatively impacted by reduced well abandonment activity following the conclusion of government incentive programs. Segment EBITDA for the fourth quarter decreased as compared to 2022 due to lower activity in all jurisdictions and competitive North American pricing that was partially offset by increased pricing in Australia.
Corporate
During the fourth quarter of 2023, Total Energy remained focused on the safe and efficient operation of its business and the execution of its 2023 capital expenditure program in preparation for the upcoming North American winter drilling season. $75.2 million of capital expenditures were made to December 31, 2023, with $14.2 million of 2023 capital expenditure commitments carried forward into 2024.
Total Energy exited the fourth quarter of 2023 with $123.4 million of positive working capital, including $47.9 million of cash, and $125 million of available credit under its $175 million of revolving bank credit facilities. The weighted average interest rate on the Company's outstanding debt at December 31, 2023 was 5.25%.
Outlook
Industry conditions remain relatively stable. Oil and natural gas producers continue to be measured in their drilling and completion programs as they pursue acquisition opportunities and execute shareholder return strategies. While recent North American natural gas spot market price weakness may adversely impact near term natural gas drilling activity, the pending completion of several LNG export facilities is expected to provide relief to the North American natural gas market.
Total Energy's previously announced 2024 preliminary capital expenditure budget of $46.5 million includes $22.4 million of growth capital. Included in 2024 growth capital is the recertification and upgrade of three Australian service rigs that are being reactivated under long term contracts. The first rig was completed and commenced operations in late February and the remaining two rigs are expected to be completed and commence operations during the second and third quarters of 2024, respectively. Included in 2023 capital expenditure commitments carried into 2024 is the completion of an Australian drilling rig that is expected to commence operations in July 2024 under a long term contract as well as several natural gas compression rental units being constructed for deployment in the United States under long term contracts.
Total Energy's wholly owned subsidiary, Savanna Energy Services Australia Pty Ltd. ("Savanna Australia") today completed the acquisition of Saxon Energy Services Australia Pty Ltd. ("Saxon"). US $34.8 million cash was paid at closing, with an additional US $2.0 million less any applicable post-closing deductions to be paid on the first anniversary of closing. Concurrent with the acquisition of Saxon, Muhammad Yasir Nisar was appointed Assistant Vice President, Drilling Services of Total Energy.
Dividend Increase
The Board of Directors of Total Energy has declared a dividend of $0.09 per common share for the quarter ended March 31, 2024, a 13% increase from the fourth quarter 2023 dividend. The dividend is payable on April 15, 2024 to shareholders of record at the close of business on March 29, 2024. The ex-dividend date is March 28, 2024. Unless otherwise indicated, all dividends declared by the Company are "eligible dividends" within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Conference Call
At 9:00 a.m. (Mountain Time) on March 8, 2024 Total Energy will conduct a conference call and webcast to discuss its fourth quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy's website at www.totalenergy.ca by selecting "Webcasts". Persons wishing to participate in the conference call may do so by calling (800) 319-4610 or (416) 915-3239. Those who are unable to listen to the call live may listen to a recording of it on Total Energy's website. A recording of the conference call will also be available until April 8, 2024 by dialing (855) 669-9658 (passcode 0705).
Selected Financial Information
Selected financial information relating to the three months and year ended December 31, 2023 and 2022 is included in this news release. This information should be read in conjunction with the 2023 Consolidated Financial Statements of Total Energy and the notes thereto as well as management's discussion and analysis to be issued in due course and in the Company's 2023 Annual Report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
(audited)
| December 31 | December 31 | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 47,935 | $ | 34,061 | ||||
| Accounts receivable | 137,604 | 154,581 | ||||||
| Inventory | 98,179 | 91,614 | ||||||
| Prepaid expenses and deposits | 16,735 | 18,847 | ||||||
| Income taxes receivable | - | 496 | ||||||
| Current portion of lease asset | - | 378 | ||||||
| 300,453 | 299,977 | |||||||
| Property, plant and equipment | 557,152 | 567,515 | ||||||
| Income taxes receivable | - | 7,070 | ||||||
| Goodwill | 4,053 | 4,053 | ||||||
| $ | 861,658 | $ | 878,615 | |||||
| Liabilities & Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 116,794 | $ | 114,274 | ||||
| Deferred revenue | 39,321 | 63,895 | ||||||
| Income taxes payable | 9,771 | - | ||||||
| Dividends payable | 3,198 | 2,490 | ||||||
| Current portion of lease liabilities | 5,880 | 5,173 | ||||||
| Current portion of long-term debt | 2,050 | 1,991 | ||||||
| 177,014 | 187,823 | |||||||
| Long-term debt | 90,947 | 117,997 | ||||||
| Lease liabilities | 9,887 | 9,631 | ||||||
| Deferred income tax liability | 53,052 | 41,141 | ||||||
| Shareholders' equity: | ||||||||
| Share capital | 251,283 | 261,109 | ||||||
| Contributed surplus | 4,805 | 3,590 | ||||||
| Accumulated other comprehensive loss | (25,506 | ) | (17,032 | ) | ||||
| Non-controlling interest | 521 | 552 | ||||||
| Retained earnings | 299,655 | 273,804 | ||||||
| 530,758 | 522,023 | |||||||
| $ | 861,658 | $ | 878,615 | |||||
Consolidated Statements of Comprehensive Income
(in thousands of Canadian dollars except per share amounts)
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | |||||||||||||
| Revenue | $ | 213,758 | $ | 211,479 | $ | 892,396 | $ | 759,813 | ||||||||
| Cost of services | 155,976 | 162,291 | 678,246 | 589,809 | ||||||||||||
| Selling, general and administration | 13,242 | 11,082 | 46,828 | 39,671 | ||||||||||||
| Other expense (income) | (92 | ) | 2,115 | (300 | ) | 1,035 | ||||||||||
| Share-based compensation | 729 | 351 | 2,186 | 1,142 | ||||||||||||
| Depreciation | 20,393 | 20,035 | 80,814 | 78,813 | ||||||||||||
| Operating income | 23,510 | 15,605 | 84,622 | 49,343 | ||||||||||||
| Gain on sale of property, plant and equipment | 1,373 | 232 | 3,525 | 3,164 | ||||||||||||
| Finance costs, net | (12,235 | ) | (2,094 | ) | (17,425 | ) | (7,374 | ) | ||||||||
| Net income before income taxes | 12,648 | 13,743 | 70,722 | 45,133 | ||||||||||||
| Current income tax expense | 17,077 | 1,289 | 17,217 | 1,250 | ||||||||||||
| Deferred income tax expense | 3,432 | 190 | 11,911 | 5,884 | ||||||||||||
| Total income tax expense | 20,509 | 1,479 | 29,128 | 7,134 | ||||||||||||
| Net income (loss) | $ | (7,861 | ) | $ | 12,264 | $ | 41,594 | $ | 37,999 | |||||||
| Net income (loss) attributable to: | ||||||||||||||||
| Shareholders of the Company | $ | (7,847 | ) | $ | 12,244 | $ | 41,625 | $ | 30,008 | |||||||
| Non-controlling interest | (14 | ) | 20 | (31 | ) | (9 | ) | |||||||||
| Income (loss) per share | ||||||||||||||||
| Basic | $ | (0.20 | ) | $ | 0.29 | $ | 1.03 | $ | 0.90 | |||||||
| Diluted | $ | (0.19 | ) | $ | 0.29 | $ | 1.01 | $ | 0.88 | |||||||
Consolidated Statements of Comprehensive Income (Loss)
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | |||||||||||||
| Net income (loss) | $ | (7,861 | ) | $ | 12,264 | $ | 41,594 | $ | 37,999 | |||||||
| Foreign currency translation | (1,440 | ) | 965 | (8,474 | ) | 9,672 | ||||||||||
| Total other comprehensive income (loss) for the period | (1,440 | ) | 965 | (8,474 | ) | 9,672 | ||||||||||
| Total comprehensive income (loss) | $ | (9,301 | ) | $ | 13,229 | $ | 33,120 | $ | 47,671 | |||||||
| Total comprehensive income (loss) attributable to: | ||||||||||||||||
| Shareholders of the Company | $ | (9,287 | ) | $ | 13,209 | $ | 33,151 | $ | 47,680 | |||||||
| Non-controlling interest | (14 | ) | 20 | (31 | ) | (9 | ) | |||||||||
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | |||||||||||||
| Cash provided by (used in): | ||||||||||||||||
| Operations: | ||||||||||||||||
| Net income (loss) for the period | $ | (7,861 | ) | $ | 12,264 | $ | 41,594 | $ | 37,999 | |||||||
| Add (deduct) items not affecting cash: | ||||||||||||||||
| Depreciation | 20,393 | 20,035 | 80,814 | 78,813 | ||||||||||||
| Share-based compensation | 729 | 351 | 2,186 | 1,142 | ||||||||||||
| Gain on sale of property, plant and equipment | (1,373 | ) | (232 | ) | (3,525 | ) | (3,164 | ) | ||||||||
| Finance costs, net | 12,235 | 2,094 | 17,425 | 7,374 | ||||||||||||
| Foreign currency translation | (136 | ) | 2,115 | (4,420 | ) | 1,035 | ||||||||||
| Current income tax expense | 17,077 | 1,289 | 17,217 | 1,250 | ||||||||||||
| Deferred income tax expense | 3,432 | 190 | 11,911 | 5,884 | ||||||||||||
| Income taxes recovered (paid) | (39 | ) | 484 | 119 | 462 | |||||||||||
| Cashflow | 44,457 | 38,590 | 163,321 | 130,795 | ||||||||||||
| Changes in non-cash working capital items: | ||||||||||||||||
| Accounts receivable | 25,373 | 9,564 | 16,977 | (64,103 | ) | |||||||||||
| Inventory | 3,285 | 1,777 | (6,565 | ) | (1,690 | ) | ||||||||||
| Prepaid expenses and deposits | 7,319 | 466 | 2,112 | (9,639 | ) | |||||||||||
| Accounts payable and accrued liabilities | (15,805 | ) | (4,543 | ) | (5,325 | ) | 40,417 | |||||||||
| Deferred revenue | (14,265 | ) | 8,755 | (24,574 | ) | 47,621 | ||||||||||
| Cash provided by operating activities | 50,364 | 54,609 | 145,946 | 143,401 | ||||||||||||
| Investing: | ||||||||||||||||
| Purchase of property, plant and equipment | (15,611 | ) | (14,713 | ) | (75,242 | ) | (56,735 | ) | ||||||||
| Proceeds on disposal of property, plant and equipment | 5,106 | 332 | 11,516 | 6,292 | ||||||||||||
| Changes in non-cash working capital items | (5,599 | ) | (1,373 | ) | (3,107 | ) | 8,181 | |||||||||
| Cash used in investing activities | (16,104 | ) | (15,754 | ) | (66,833 | ) | (42,262 | ) | ||||||||
| Financing: | ||||||||||||||||
| Repayment of long-term debt | (10,500 | ) | (28,574 | ) | (26,991 | ) | (70,529 | ) | ||||||||
| Repayment of lease liabilities | (1,198 | ) | (1,359 | ) | (5,912 | ) | (4,966 | ) | ||||||||
| Dividends to shareholders | (3,198 | ) | (2,517 | ) | (12,142 | ) | (4,999 | ) | ||||||||
| Repurchase of common shares | - | (4,491 | ) | (13,587 | ) | (12,638 | ) | |||||||||
| Shares issued on exercise of share options | - | 42 | 42 | 158 | ||||||||||||
| Interest paid | (1,314 | ) | (2,198 | ) | (6,649 | ) | (7,469 | ) | ||||||||
| Cash used in financing activities | (16,210 | ) | (39,097 | ) | (65,239 | ) | (100,443 | ) | ||||||||
| Change in cash and cash equivalents | 18,050 | (242 | ) | 13,874 | 696 | |||||||||||
| Cash and cash equivalents, beginning of period | 29,885 | 34,303 | 34,061 | 33,365 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 47,935 | $ | 34,061 | $ | 47,935 | $ | 34,061 | ||||||||
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company's corporate and public issuer affairs.
As at and for the three months ended December 31, 2023 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate(1) | Total | ||||||||||||||||||
| Drilling | Transportation | and Process | Servicing | ||||||||||||||||||||
| Services | Services | Services | |||||||||||||||||||||
| Revenue | $ | 74,700 | $ | 19,544 | $ | 95,439 | $ | 24,075 | $ | - | $ | 213,758 | |||||||||||
| Cost of services | 47,897 | 10,485 | 78,813 | 18,781 | - | 155,976 | |||||||||||||||||
| Selling, general and administration | 3,436 | 2,260 | 3,294 | 1,324 | 2,928 | 13,242 | |||||||||||||||||
| Other (income) loss | (85 | ) | (35 | ) | 113 | - | (85 | ) | (92 | ) | |||||||||||||
| Share-based compensation | - | - | - | - | 729 | 729 | |||||||||||||||||
| Depreciation | 9,668 | 5,111 | 2,528 | 2,853 | 233 | 20,393 | |||||||||||||||||
| Operating income (loss) | 13,784 | 1,723 | 10,691 | 1,117 | (3,805 | ) | 23,510 | ||||||||||||||||
| Gain on sale of property, plant and equipment | 428 | 93 | 855 | 27 | (30 | ) | 1,373 | ||||||||||||||||
| Finance costs, net | (21 | ) | (50 | ) | (110 | ) | (23 | ) | (12,031 | ) | (12,235 | ) | |||||||||||
| Net income (loss) before income taxes | 14,191 | 1,766 | 11,436 | 1,121 | (15,866 | ) | 12,648 | ||||||||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | |||||||||||||||||
| Total assets | 364,968 | 169,847 | 255,055 | 69,398 | 2,390 | 861,658 | |||||||||||||||||
| Total liabilities | 64,810 | 29,502 | 93,980 | 6,383 | 136,225 | 330,900 | |||||||||||||||||
| Capital expenditures | 6,282 | 1,446 | 7,669 | 208 | 6 | 15,611 | |||||||||||||||||
| Canada | United States | Australia | Total | |||||
| Revenue | $ | 116,289 | $ | 77,779 | $ | 19,690 | $ | 213,758 |
| Non-current assets(2) | 384,448 | 129,817 | 46,940 | 561,205 | ||||
As at and for the three months ended December 31, 2022 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate(1) | Total | ||||||||||||||||||
| Drilling | Transportation | and Process | Servicing | ||||||||||||||||||||
| Services | Services | Services | |||||||||||||||||||||
| Revenue | $ | 69,185 | $ | 20,043 | $ | 93,668 | $ | 28,583 | $ | - | $ | 211,479 | |||||||||||
| Cost of services | 49,225 | 12,152 | 79,703 | 21,211 | - | 162,291 | |||||||||||||||||
| Selling, general and administration | 2,007 | 1,912 | 3,208 | 1,153 | 2,802 | 11,082 | |||||||||||||||||
| Other income | - | - | - | - | 2,115 | 2,115 | |||||||||||||||||
| Share-based compensation | - | - | - | - | 351 | 351 | |||||||||||||||||
| Depreciation | 9,138 | 4,868 | 2,618 | 3,165 | 246 | 20,035 | |||||||||||||||||
| Operating income (loss) | 8,815 | 1,111 | 8,139 | 3,054 | (5,514 | ) | 15,605 | ||||||||||||||||
| Gain on sale of property, plant and equipment | 23 | 192 | 14 | 3 | - | 232 | |||||||||||||||||
| Finance costs, net | (9 | ) | (16 | ) | (124 | ) | (9 | ) | (1,936 | ) | (2,094 | ) | |||||||||||
| Net income (loss) before income taxes | 8,829 | 1,287 | 8,029 | 3,048 | (7,450 | ) | 13,743 | ||||||||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | |||||||||||||||||
| Total assets | 346,870 | 182,095 | 260,019 | 83,628 | 6,003 | 878,615 | |||||||||||||||||
| Total liabilities | 62,545 | 20,292 | 122,320 | 6,003 | 145,432 | 356,592 | |||||||||||||||||
| Capital expenditures | 6,865 | 3,490 | 3,928 | 400 | 30 | 14,713 | |||||||||||||||||
| Canada | United States | Australia | Total | |||||
| Revenue | $ | 89,191 | $ | 97,228 | $ | 25,060 | $ | 211,479 |
| Non-current assets(2) | 373,637 | 146,886 | 51,045 | 571,568 | ||||
| (1) | Corporate includes the Company's corporate activities and obligations pursuant to long-term credit facilities. |
| (2) | Includes property, plant and equipment, lease asset (excluding current portion) and goodwill. |
As at and for the year ended December 31, 2023 (audited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate(1) | Total | ||||||||||||||||||
| Drilling | Transportation | and Process | Servicing | ||||||||||||||||||||
| Services | Services | Services | |||||||||||||||||||||
| Revenue | $ | 287,333 | $ | 84,906 | $ | 417,646 | $ | 102,511 | $ | - | $ | 892,396 | |||||||||||
| Cost of services | 201,363 | 46,210 | 352,079 | 78,594 | - | 678,246 | |||||||||||||||||
| Selling, general and administration | 10,988 | 8,634 | 13,416 | 4,448 | 9,342 | 46,828 | |||||||||||||||||
| Other income | (65 | ) | (35 | ) | 25 | - | (225 | ) | (300 | ) | |||||||||||||
| Share-based compensation | - | - | - | - | 2,186 | 2,186 | |||||||||||||||||
| Depreciation | 37,775 | 19,731 | 10,350 | 11,944 | 1,014 | 80,814 | |||||||||||||||||
| Operating income (loss) | 37,272 | 10,366 | 41,776 | 7,525 | (12,317 | ) | 84,622 | ||||||||||||||||
| Gain on sale of property, plant and equipment | 663 | 807 | 1,691 | 364 | - | 3,525 | |||||||||||||||||
| Finance costs, net | (65 | ) | (113 | ) | (463 | ) | (74 | ) | (16,710 | ) | (17,425 | ) | |||||||||||
| Net income (loss) before income taxes | 37,870 | 11,060 | 43,004 | 7,815 | (29,027 | ) | 70,722 | ||||||||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | |||||||||||||||||
| Total assets | 364,968 | 169,847 | 255,055 | 69,398 | 2,390 | 861,658 | |||||||||||||||||
| Total liabilities | 64,810 | 29,502 | 93,980 | 6,383 | 136,225 | 330,900 | |||||||||||||||||
| Capital expenditures | 46,810 | 7,223 | 14,452 | 6,516 | 241 | 75,242 | |||||||||||||||||
| Canada | United States | Australia | Total | |||||
| Revenue | $ | 419,618 | $ | 381,396 | $ | 91,382 | $ | 892,396 |
| Non-current assets(2) | 384,448 | 129,817 | 46,940 | 561,205 | ||||
As at and for the year ended December 31, 2022 (audited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate | Total | ||||||||||||||||||
| Drilling | Transportation | and Process | Servicing | (1) | |||||||||||||||||||
| Services | Services | Services | |||||||||||||||||||||
| Revenue | $ | 252,663 | $ | 66,954 | $ | 331,669 | $ | 108,527 | $ | - | $ | 759,813 | |||||||||||
| Cost of services | 185,579 | 37,713 | 286,259 | 80,258 | - | 589,809 | |||||||||||||||||
| Selling, general and administration | 7,374 | 6,902 | 10,071 | 5,130 | 10,194 | 39,671 | |||||||||||||||||
| Other expense | - | - | - | - | 1,035 | 1,035 | |||||||||||||||||
| Share-based compensation | - | - | - | - | 1,142 | 1,142 | |||||||||||||||||
| Depreciation | 35,785 | 19,518 | 9,725 | 12,832 | 953 | 78,813 | |||||||||||||||||
| Operating income (loss) | 23,925 | 2,821 | 25,614 | 10,307 | (13,324 | ) | 49,343 | ||||||||||||||||
| Gain on sale of property, plant and equipment | 292 | 1,022 | 1,594 | 256 | - | 3,164 | |||||||||||||||||
| Finance costs, net | (23 | ) | (75 | ) | (412 | ) | (26 | ) | (6,838 | ) | (7,374 | ) | |||||||||||
| Net income (loss) before income taxes | 24,194 | 3,768 | 26,796 | 10,537 | (20,162 | ) | 45,133 | ||||||||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | |||||||||||||||||
| Total assets | 346,870 | 182,095 | 260,019 | 83,628 | 6,003 | 878,615 | |||||||||||||||||
| Total liabilities | 62,545 | 20,292 | 122,320 | 6,003 | 145,432 | 356,592 | |||||||||||||||||
| Capital expenditures | 34,835 | 8,508 | 9,490 | 3,792 | 110 | 56,735 | |||||||||||||||||
| Canada | United States | Australia | Total | |||||
| Revenue | $ | 371,478 | $ | 263,751 | $ | 124,584 | $ | 759,813 |
| Non-current assets(2) | 373,637 | 146,886 | 51,045 | 571,568 | ||||
| (1) | Corporate includes the Company's corporate activities and obligations pursuant to long-term credit facilities. |
| (2) | Includes property, plant and equipment, lease asset (excluding current portion) and goodwill. |
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca
Notes to the Financial Highlights
| (1) | EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company's primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy's performance. Total Energy's method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations. |
| (2) | Working capital equals current assets minus current liabilities. |
| (3) | Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company's liquidity. |
| (4) | Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 15 to the Company's 2023 Consolidated Financial Statements. |
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy's future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy's ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy's most recently filed Annual Information Form and other public disclosures (available at www.sedar.com) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
