CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Total Energy Services Inc. ("Total Energy" or the "Company") (TSX:TOT) announces its consolidated financial results for the three and nine months ended September 30, 2024.
Financial Highlights
($000's except per share data)
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||
| Revenue | $ | 241,940 | $ | 232,016 | 4 | % | $ | 659,960 | $ | 678,638 | (3 | %) | |
| Operating income | 27,308 | 23,691 | 15 | % | 63,950 | 61,112 | 5 | % | |||||
| EBITDA (1) | 50,543 | 44,955 | 12 | % | 131,280 | 123,685 | 6 | % | |||||
| Cashflow | 48,091 | 40,784 | 18 | % | 119,022 | 118,864 | - | ||||||
| Net income | 19,706 | 19,237 | 2 | % | 50,623 | 49,455 | 2 | % | |||||
| Attributable to shareholders | 19,731 | 19,231 | 3 | % | 50,685 | 49,472 | 2 | % | |||||
| Per Share Data (Diluted) | |||||||||||||
| EBITDA (1) | $ | 1.28 | $ | 1.10 | 16 | % | $ | 3.27 | $ | 3.00 | 9 | % | |
| Cashflow | $ | 1.22 | $ | 1.00 | 22 | % | $ | 2.97 | $ | 2.88 | 3 | % | |
| Attributable to shareholders: | |||||||||||||
| Net income | $ | 0.50 | $ | 0.47 | 6 | % | $ | 1.26 | $ | 1.20 | 5 | % | |
| Common shares (000's)(4) | |||||||||||||
| Basic | 38,802 | 40,149 | (3 | %) | 39,385 | 40,555 | (3 | %) | |||||
| Diluted | 39,489 | 40,961 | (4 | %) | 40,086 | 41,291 | (3 | %) | |||||
| September 30 | December 31 | ||||||||||||
| Financial Position at | 2024 | 2023 | Change | ||||||||||
| Total Assets | $ | 963,743 | $ | 861,658 | 12 | % | |||||||
| Long-Term Debt and Lease Liabilities (excluding current portion) | 104,997 | 100,834 | 4 | % | |||||||||
| Working Capital (2) | 97,274 | 123,439 | (21 | %) | |||||||||
| Net Debt (3) | 7,723 | - | nm | ||||||||||
| Shareholders' Equity | 561,211 | 530,758 | 6 | % | |||||||||
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 three months ended September 30, 2024 represent record quarterly financial results. Substantial share repurchases over the past year amplified the results on a fully diluted per share basis. Underpinning these record results were stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. ("Saxon") on March 7, 2024 and continued strong North American demand for compression and process equipment that more than offset a year over year decline in drilling and completion activity in the United States.
Contract Drilling Services ("CDS")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Revenue | $ | 86,634 | $ | 75,815 | 14 | % | $ | 235,734 | $ | 212,633 | 11 | % | ||||
| EBITDA (1) | $ | 20,563 | $ | 21,670 | (5 | %) | $ | 57,414 | $ | 51,830 | 11 | % | ||||
| EBITDA (1) as a % of revenue | 24 | % | 29 | % | (17 | %) | 24 | % | 24 | % | - | |||||
| Operating days(2) | 2,836 | 2,880 | (2 | %) | 7,687 | 7,723 | - | |||||||||
| Canada | 1,861 | 2,009 | (7 | %) | 4,954 | 5,023 | (1 | %) | ||||||||
| United States | 328 | 535 | (39 | %) | 1,033 | 1,696 | (39 | %) | ||||||||
| Australia | 647 | 336 | 93 | % | 1,700 | 1,004 | 69 | % | ||||||||
| Revenue per operating day(2), dollars | $ | 30,548 | $ | 26,325 | 16 | % | $ | 30,667 | $ | 27,532 | 11 | % | ||||
| Canada | 25,026 | 24,522 | 2 | % | 26,137 | 25,668 | 2 | % | ||||||||
| United States | 27,829 | 28,540 | (2 | %) | 28,566 | 28,326 | 1 | % | ||||||||
| Australia | 47,808 | 33,577 | 42 | % | 45,144 | 35,522 | 27 | % | ||||||||
| Utilization | 29 | % | 33 | % | (12 | %) | 27 | % | 30 | % | (10 | %) | ||||
| Canada | 27 | % | 28 | % | (4 | %) | 24 | % | 24 | % | - | |||||
| United States | 30 | % | 48 | % | (38 | %) | 31 | % | 53 | % | (42 | %) | ||||
| Australia | 41 | % | 73 | % | (44 | %) | 46 | % | 74 | % | (38 | %) | ||||
| Rigs, average for period | 105 | 94 | 12 | % | 103 | 94 | 10 | % | ||||||||
| Canada | 76 | 77 | (1 | %) | 77 | 77 | - | |||||||||
| United States | 12 | 12 | - | 12 | 12 | - | ||||||||||
| Australia | 17 | 5 | 240 | % | 14 | 5 | 180 | % | ||||||||
(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.
Canadian drilling activity during the third quarter of 2024 was relatively consistent with 2023 while United States activity continued to lag the prior year. Canadian operating days were negatively impacted when an AC double drilling rig was damaged in July during transit. The rig returned to service in mid-October following completion of repairs. In Australia, Saxon contributed $20.2 million of revenue during the third quarter of 2024. Included in 2023 third quarter segment EBITDA was a $4.1 million realized foreign exchange gain on settlement of intercompany notes. Excluding the effect of this foreign exchange gain, third quarter segment EBITDA increased 17% as compared to 2023 and the segment EBITDA margin increased from 23% to 24%. The substantial year over year increase in third quarter Australian revenue per operating day reflects the addition of Saxon's deeper drilling rig fleet which receives higher day rates.
Rentals and Transportation Services ("RTS")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Revenue | $ | 19,437 | $ | 21,137 | (8 | %) | $ | 59,614 | $ | 65,362 | (9 | %) | ||||
| EBITDA (1) | $ | 8,179 | $ | 7,263 | 13 | % | $ | 23,958 | $ | 23,977 | - | |||||
| EBITDA (1) as a % of revenue | 42 | % | 34 | % | 24 | % | 40 | % | 37 | % | 8 | % | ||||
| Revenue per utilized piece of equipment, dollars | $ | 12,868 | $ | 12,825 | - | $ | 42,297 | $ | 42,473 | - | ||||||
| Pieces of rental equipment | 7,960 | 7,659 | 4 | % | 7,960 | 7,659 | 4 | % | ||||||||
| Canada | 7,040 | 6,767 | 4 | % | 7,040 | 6,767 | 4 | % | ||||||||
| United States | 920 | 892 | 3 | % | 920 | 892 | 3 | % | ||||||||
| Rental equipment utilization | 19 | % | 19 | % | - | 18 | % | 18 | % | - | ||||||
| Canada | 18 | % | 18 | % | - | 16 | % | 16 | % | - | ||||||
| United States | 29 | % | 27 | % | 7 | % | 33 | % | 36 | % | (8 | %) | ||||
| Heavy trucks | 67 | 69 | (3 | %) | 67 | 69 | (3 | %) | ||||||||
| Canada | 46 | 48 | (4 | %) | 46 | 48 | (4 | %) | ||||||||
| United States | 21 | 21 | - | 21 | 21 | - | ||||||||||
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Third quarter revenue in the RTS segment decreased as compared to 2023 due to lower United States revenue. While United States equipment utilization increased slightly, lower pricing due to competitive market conditions and the mix of equipment operating contributed to a year over year decline in third quarter revenue. Despite the decline in segment revenue, effective cost management resulted in higher third quarter EBITDA and EBITDA margins as compared to 2023.
Compression and Process Services ("CPS")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Revenue | $ | 110,567 | $ | 110,959 | - | $ | 297,547 | $ | 322,207 | (8 | %) | |||||
| EBITDA (1) | $ | 19,336 | $ | 14,404 | 34 | % | $ | 47,795 | $ | 39,402 | 21 | % | ||||
| EBITDA (1) as a % of revenue | 17 | % | 13 | % | 31 | % | 16 | % | 12 | % | 33 | % | ||||
| Horsepower of equipment on rent at period end | 52,881 | 36,616 | 44 | % | 52,881 | 36,616 | 44 | % | ||||||||
| Canada | 16,661 | 15,226 | 9 | % | 16,661 | 15,226 | 9 | % | ||||||||
| United States | 36,220 | 21,390 | 69 | % | 36,220 | 21,390 | 69 | % | ||||||||
| Rental equipment utilization during the period (HP)(2) | 77 | % | 69 | % | 12 | % | 77 | % | 75 | % | 3 | % | ||||
| Canada | 72 | % | 73 | % | (1 | %) | 70 | % | 77 | % | (9 | %) | ||||
| United States | 79 | % | 67 | % | 18 | % | 80 | % | 74 | % | 8 | % | ||||
| Sales backlog at period end, $ million | $ | 189.0 | $ | 152.9 | 24 | % | $ | 189.0 | $ | 152.9 | 24 | % | ||||
(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.
CPS segment revenue for the third quarter of 2024 was consistent with 2023 and decreased during the first nine months of 2024 as compared to the same period in 2023. Improved fabrication efficiencies and a significant increase in compression horsepower on rent contributed to the year over year increase in segment EBITDA and EBITDA margin. The quarter end fabrication sales backlog increased by $36.1 million compared to the $152.9 million backlog at September 30, 2023 and decreased sequentially by $15.6 million from the $204.6 million sales backlog at June 30, 2024.
Well Servicing ("WS")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Revenue | $ | 25,302 | $ | 24,105 | 5 | % | $ | 67,065 | $ | 78,436 | (14 | %) | ||||
| EBITDA (1) | $ | 4,943 | $ | 5,044 | (2 | %) | $ | 11,344 | $ | 16,177 | (30 | %) | ||||
| EBITDA (1) as a % of revenue | 20 | % | 21 | % | (5 | %) | 17 | % | 21 | % | (19 | %) | ||||
| Service hours(2) | 24,680 | 26,044 | (5 | %) | 67,307 | 81,920 | (18 | %) | ||||||||
| Canada | 13,412 | 12,140 | 10 | % | 37,229 | 38,988 | (5 | %) | ||||||||
| United States | 2,613 | 6,370 | (59 | %) | 9,243 | 18,781 | (51 | %) | ||||||||
| Australia | 8,655 | 7,534 | 15 | % | 20,835 | 24,151 | (14 | %) | ||||||||
| Revenue per service hour(2), dollars | $ | 1,025 | $ | 926 | 11 | % | $ | 996 | $ | 957 | 4 | % | ||||
| Canada | 958 | 923 | 4 | % | 962 | 955 | 1 | % | ||||||||
| United States | 861 | 944 | (9 | %) | 883 | 980 | (10 | %) | ||||||||
| Australia | 1,179 | 913 | 29 | % | 1,109 | 944 | 17 | % | ||||||||
| Utilization(3) | 27 | % | 30 | % | (8 | %) | 25 | % | 32 | % | (20 | %) | ||||
| Canada | 27 | % | 24 | % | 13 | % | 24 | % | 26 | % | (8 | %) | ||||
| United States | 24 | % | 63 | % | (62 | %) | 31 | % | 63 | % | (51 | %) | ||||
| Australia | 33 | % | 28 | % | 18 | % | 26 | % | 31 | % | (16 | %) | ||||
| Rigs, average for period | 79 | 79 | - | 79 | 79 | - | ||||||||||
| Canada | 55 | 56 | (2 | %) | 56 | 56 | - | |||||||||
| United States | 12 | 11 | 9 | % | 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.
Third quarter WS segment revenue increased in 2024 as compared to 2023 due to increased activity in Canada and Australia that offset a substantial decline in United States activity. Segment EBITDA was modestly lower as higher operating income in Canada and Australia was more than offset by the decline in United States operating income. Activity levels in the United States were significantly lower due in part to significant customer consolidation. Increased pricing and utilization in Australia was due to the deployment of upgraded rigs.
Corporate
During the third quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. Including the acquisition of Saxon, $112.4 million of capital expenditures have been funded to September 30, 2024.
Total Energy exited the third quarter of 2024 with $97.3 million of positive working capital, including $61.9 million of cash, and $80 million of available credit under its $175 million of revolving bank credit facilities. Included in current liabilities is a $41.5 million mortgage loan that matures in April of 2025. Total Energy expects to repay this debt at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company's outstanding debt at September 30, 2024 was 5.26%.
Outlook
Despite continued global economic uncertainty and commodity price volatility, industry conditions remain relatively stable. Contributing to this stability is continued investment to increase North American LNG export capacity, a strong Asian LNG market and the recent completion of the Trans Mountain pipeline expansion in Canada. Total Energy's efforts to grow its Australian business continued in the third quarter when two drilling rigs and a service rig commenced operations under long term contracts.
Total Energy continues to see opportunities to upgrade and reactivate equipment as well as targeted opportunities to build new equipment. In that regard, the Board of Directors has approved a $19.8 million increase to the Company's 2024 capital expenditure budget to $86.1 million. $13.1 million of this increase is directed towards growth opportunities, including the upgrade of two Saxon drilling rigs and one service rig in Australia that will be deployed in the first quarter of 2025 under long term contracts. Also included in growth capital is $1.0 million of new rental equipment for the RTS segment that will be deployed during the fourth quarter of 2024. The remaining $6.7 million includes the purchase of new drill pipe and an operating facility currently leased by the RTS segment in the United States as well as drilling rig recertifications. Including this increase, $14.2 million of capital commitments carried forward from 2023 and the acquisition of Saxon, projected 2024 capital expenditures total $147.7 million, of which $112.4 million has been funded to September 30, 2024. The Company expects to fund the remaining $35.3 million of capital commitments with cash on hand and cashflow, with approximately $10.0 million expected to be funded in 2025.
Conference Call
At 9:00 a.m. (Mountain Time) on November 7, 2024 Total Energy will conduct a conference call and webcast to discuss its third 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 (844) 763-8274 or (647) 484-8814. 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 December 7, 2024 by dialing (855) 669-9658 (passcode 1362549).
Selected Financial Information
Selected financial information relating to the three and nine months ended September 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim 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)
| September 30 | December 31 | |||||
| 2024 | 2023 | |||||
| (unaudited) | (audited) | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 61,879 | $ | 47,935 | ||
| Accounts receivable | 147,293 | 137,604 | ||||
| Inventory | 116,359 | 98,179 | ||||
| Prepaid expenses and deposits | 16,763 | 16,735 | ||||
| 342,294 | 300,453 | |||||
| Property, plant and equipment | 617,129 | 557,152 | ||||
| Deferred income tax asset | 267 | - | ||||
| Goodwill | 4,053 | 4,053 | ||||
| $ | 963,743 | $ | 861,658 | |||
| Liabilities & Shareholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 132,910 | $ | 116,794 | ||
| Deferred revenue | 53,477 | 39,321 | ||||
| Contingent consideration on business acquisition | 2,700 | - | ||||
| Income taxes payable | 4,489 | 9,771 | ||||
| Dividends payable | 3,453 | 3,198 | ||||
| Current portion of lease liabilities | 6,528 | 5,880 | ||||
| Current portion of long-term debt | 41,463 | 2,050 | ||||
| 245,020 | 177,014 | |||||
| Long-term debt | 95,000 | 90,947 | ||||
| Lease liabilities | 9,997 | 9,887 | ||||
| Deferred income tax liability | 52,515 | 53,052 | ||||
| Shareholders' equity: | ||||||
| Share capital | 240,563 | 251,283 | ||||
| Contributed surplus | 5,273 | 4,805 | ||||
| Accumulated other comprehensive loss | (18,235 | ) | (25,506 | ) | ||
| Non-controlling interest | 259 | 521 | ||||
| Retained earnings | 333,351 | 299,655 | ||||
| 561,211 | 530,758 | |||||
| $ | 963,743 | $ | 861,658 | |||
Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Revenue | $ | 241,940 | $ | 232,016 | $ | 659,960 | $ | 678,638 | ||||
| Cost of services | 178,530 | 175,235 | 491,092 | 522,270 | ||||||||
| Selling, general and administration | 13,337 | 12,027 | 37,512 | 33,586 | ||||||||
| Other expense (income) | (844 | ) | 238 | (720 | ) | (208 | ) | |||||
| Share-based compensation | 518 | 701 | 1,940 | 1,457 | ||||||||
| Depreciation | 23,091 | 20,124 | 66,186 | 60,421 | ||||||||
| Operating income | 27,308 | 23,691 | 63,950 | 61,112 | ||||||||
| Gain on sale of property, plant and equipment | 144 | 1,140 | 1,144 | 2,152 | ||||||||
| Finance costs, net | (2,330 | ) | (1,691 | ) | (6,318 | ) | (5,190 | ) | ||||
| Net income before income taxes | 25,122 | 23,140 | 58,776 | 58,074 | ||||||||
| Current income tax (recovery) expense | 2,072 | (231 | ) | 7,090 | 140 | |||||||
| Deferred income tax expense | 3,344 | 4,134 | 1,063 | 8,479 | ||||||||
| Total income tax expense | 5,416 | 3,903 | 8,153 | 8,619 | ||||||||
| Net income | $ | 19,706 | $ | 19,237 | $ | 50,623 | $ | 49,455 | ||||
| Net income (loss) attributable to: | ||||||||||||
| Shareholders of the Company | $ | 19,731 | $ | 19,231 | $ | 50,685 | $ | 49,472 | ||||
| Non-controlling interest | (25 | ) | 6 | (62 | ) | (17 | ) | |||||
| Income per share | ||||||||||||
| Basic | $ | 0.51 | $ | 0.48 | $ | 1.29 | $ | 1.22 | ||||
| Diluted | $ | 0.50 | $ | 0.47 | $ | 1.26 | $ | 1.20 | ||||
Consolidated Statements of Comprehensive Income
| Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income | $ | 19,706 | $ | 19,237 | $ | 50,623 | $ | 49,455 | ||||
| Foreign currency translation | (31 | ) | (1,734 | ) | 7,271 | (7,034 | ) | |||||
| Total other comprehensive income (loss) for the period | (31 | ) | (1,734 | ) | 7,271 | (7,034 | ) | |||||
| Total comprehensive income | $ | 19,675 | $ | 17,503 | $ | 57,894 | $ | 42,421 | ||||
| Total comprehensive income (loss) attributable to: | ||||||||||||
| Shareholders of the Company | $ | 19,700 | $ | 17,497 | $ | 57,956 | $ | 42,438 | ||||
| Non-controlling interest | (25 | ) | 6 | (62 | ) | (17 | ) | |||||
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Cash provided by (used in): | ||||||||||||
| Operations: | ||||||||||||
| Net income for the period | $ | 19,706 | $ | 19,237 | $ | 50,623 | $ | 49,455 | ||||
| Add (deduct) items not affecting cash: | ||||||||||||
| Depreciation | 23,091 | 20,124 | 66,186 | 60,421 | ||||||||
| Share-based compensation | 518 | 701 | 1,940 | 1,457 | ||||||||
| Gain on sale of property, plant and equipment | (144 | ) | (1,140 | ) | (1,144 | ) | (2,152 | ) | ||||
| Finance costs, net | 2,330 | 1,691 | 6,318 | 5,190 | ||||||||
| Foreign currency translation | (999 | ) | (3,934 | ) | (336 | ) | (4,284 | ) | ||||
| Current income tax (recovery) expense | 2,072 | (231 | ) | 7,090 | 140 | |||||||
| Deferred income tax expense | 3,344 | 4,134 | 1,063 | 8,479 | ||||||||
| Income taxes paid | (1,827 | ) | 202 | (12,718 | ) | 158 | ||||||
| Cashflow | 48,091 | 40,784 | 119,022 | 118,864 | ||||||||
| Changes in non-cash working capital items: | ||||||||||||
| Accounts receivable | (1,109 | ) | (13,516 | ) | (9,689 | ) | (8,396 | ) | ||||
| Inventory | 3,527 | 10,194 | (18,180 | ) | (9,850 | ) | ||||||
| Prepaid expenses and deposits | (2,637 | ) | (5,353 | ) | (28 | ) | (5,207 | ) | ||||
| Accounts payable and accrued liabilities | 9,029 | (8,066 | ) | 21,896 | 10,480 | |||||||
| Deferred revenue | 3,452 | (2,104 | ) | 14,156 | (10,309 | ) | ||||||
| Cash provided by operating activities | 60,353 | 21,939 | 127,177 | 95,582 | ||||||||
| Investing: | ||||||||||||
| Purchase of property, plant and equipment | (14,700 | ) | (17,177 | ) | (65,038 | ) | (59,631 | ) | ||||
| Cash paid on acquisition | - | - | (47,350 | ) | - | |||||||
| Proceeds on disposal of property, plant and equipment | 156 | 4,906 | 1,705 | 6,410 | ||||||||
| Changes in non-cash working capital items | (441 | ) | (12 | ) | 3,260 | 2,492 | ||||||
| Cash used in investing activities | (14,985 | ) | (12,283 | ) | (107,423 | ) | (50,729 | ) | ||||
| Financing: | ||||||||||||
| Advances of long-term debt | 5,000 | - | 65,000 | - | ||||||||
| Repayment of long-term debt | (513 | ) | (498 | ) | (21,534 | ) | (16,491 | ) | ||||
| Repayment of lease liabilities | (1,742 | ) | (1,558 | ) | (5,134 | ) | (4,714 | ) | ||||
| Dividends to shareholders | (3,496 | ) | (3,212 | ) | (10,290 | ) | (8,944 | ) | ||||
| Repurchase of common shares | (5,183 | ) | (2,298 | ) | (17,853 | ) | (13,587 | ) | ||||
| Shares issued on exercise of stock options | - | 42 | 64 | 42 | ||||||||
| Partnership distributions | - | - | (200 | ) | - | |||||||
| Interest paid | (2,319 | ) | (2,113 | ) | (15,863 | ) | (5,335 | ) | ||||
| Cash used in financing activities | (8,253 | ) | (9,637 | ) | (5,810 | ) | (49,029 | ) | ||||
| Change in cash and cash equivalents | 37,115 | 19 | 13,944 | (4,176 | ) | |||||||
| Cash and cash equivalents, beginning of period | 24,764 | 29,866 | 47,935 | 34,061 | ||||||||
| Cash and cash equivalents, end of period | $ | 61,879 | $ | 29,885 | $ | 61,879 | $ | 29,885 | ||||
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 September 30, 2024 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | (1) | ||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 86,634 | $ | 19,437 | $ | 110,567 | $ | 25,302 | $ | - | $ | 241,940 | ||||||
| Cost of services | 63,727 | 9,165 | 86,723 | 18,915 | - | 178,530 | ||||||||||||
| Selling, general and administration | 2,358 | 2,144 | 4,587 | 1,444 | 2,804 | 13,337 | ||||||||||||
| Other income | - | - | - | - | (844 | ) | (844 | ) | ||||||||||
| Share-based compensation | - | - | - | - | 518 | 518 | ||||||||||||
| Depreciation | 12,287 | 5,145 | 2,788 | 2,446 | 425 | 23,091 | ||||||||||||
| Operating income (loss) | 8,262 | 2,983 | 16,469 | 2,497 | (2,903 | ) | 27,308 | |||||||||||
| Gain (loss) on sale of property, plant and equipment | 14 | 51 | 79 | - | - | 144 | ||||||||||||
| Finance costs, net | (17 | ) | (43 | ) | (109 | ) | (19 | ) | (2,142 | ) | (2,330 | ) | ||||||
| Net income (loss) before income taxes | 8,259 | 2,991 | 16,439 | 2,478 | (5,045 | ) | 25,122 | |||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | ||||||||||||
| Total assets | 434,030 | 163,853 | 284,919 | 76,899 | 4,042 | 963,743 | ||||||||||||
| Total liabilities | 84,042 | 26,558 | 111,634 | 6,473 | 173,825 | 402,532 | ||||||||||||
| Capital expenditures | 9,184 | 2,269 | 1,076 | 2,171 | - | 14,700 | ||||||||||||
| Canada | United States | Australia | International | Total | ||||||
| Revenue | $ | 117,704 | $ | 82,514 | $ | 41,722 | $ | - | $ | 241,940 |
| Non-current assets (2) | 364,318 | 131,534 | 125,330 | - | 621,182 | |||||
As at and for the three months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | (1) | ||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 75,815 | $ | 21,137 | $ | 110,959 | $ | 24,105 | $ | - | $ | 232,016 | ||||||
| Cost of services | 51,265 | 11,828 | 94,122 | 18,020 | - | 175,235 | ||||||||||||
| Selling, general and administration | 2,581 | 2,240 | 3,327 | 1,208 | 2,671 | 12,027 | ||||||||||||
| Other (income) expense | 308 | 7 | (131 | ) | - | 54 | 238 | |||||||||||
| Share-based compensation | - | - | - | - | 701 | 701 | ||||||||||||
| Depreciation | 9,580 | 4,903 | 2,585 | 2,802 | 254 | 20,124 | ||||||||||||
| Operating income (loss) | 12,081 | 2,159 | 11,056 | 2,075 | (3,680 | ) | 23,691 | |||||||||||
| Gain on sale of property, plant and equipment | 9 | 201 | 763 | 167 | - | 1,140 | ||||||||||||
| Finance costs, net | (14 | ) | (28 | ) | (121 | ) | (18 | ) | (1,510 | ) | (1,691 | ) | ||||||
| Net income (loss) before income taxes | 12,076 | 2,332 | 11,698 | 2,224 | (5,190 | ) | 23,140 | |||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | ||||||||||||
| Total assets | 367,553 | 176,330 | 275,886 | 74,376 | 180 | 894,325 | ||||||||||||
| Total liabilities | 72,824 | 28,851 | 110,391 | 6,980 | 132,751 | 351,797 | ||||||||||||
| Capital expenditures | 9,094 | 1,643 | 4,268 | 1,937 | 235 | 17,177 | ||||||||||||
| Canada | United States | Australia | International | Total | ||||||
| Revenue | $ | 111,945 | $ | 99,790 | $ | 20,281 | $ | - | $ | 232,016 |
| Non-current assets (2) | 393,168 | 129,263 | 46,240 | - | 568,671 |
(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 nine months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)
| As at and for the nine months ended | Contract | Rentals and | Compression | Well | Corporate | Total | ||||||||||||
| September 30, 2024 | Drilling | Transportation | and Process | Servicing | (1) | |||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 235,734 | $ | 59,614 | $ | 297,547 | $ | 67,065 | $ | - | $ | 659,960 | ||||||
| Cost of services | 171,011 | 29,933 | 238,453 | 51,695 | - | 491,092 | ||||||||||||
| Selling, general and administration | 7,424 | 6,567 | 11,508 | 4,002 | 8,011 | 37,512 | ||||||||||||
| Other expense | - | - | - | - | (720 | ) | (720 | ) | ||||||||||
| Share-based compensation | - | - | - | - | 1,940 | 1,940 | ||||||||||||
| Depreciation | 34,669 | 15,228 | 7,999 | 7,269 | 1,021 | 66,186 | ||||||||||||
| Operating income (loss) | 22,630 | 7,886 | 39,587 | 4,099 | (10,252 | ) | 63,950 | |||||||||||
| Gain (loss) on sale of property, plant and equipment | 115 | 844 | 209 | (24 | ) | - | 1,144 | |||||||||||
| Finance costs, net | (55 | ) | (130 | ) | (321 | ) | (64 | ) | (5,748 | ) | (6,318 | ) | ||||||
| Net income (loss) before income taxes | 22,690 | 8,600 | 39,475 | 4,011 | (16,000 | ) | 58,776 | |||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | ||||||||||||
| Total assets | 434,030 | 163,853 | 284,919 | 76,899 | 4,042 | 963,743 | ||||||||||||
| Total liabilities | 84,042 | 26,558 | 111,634 | 6,473 | 173,825 | 402,532 | ||||||||||||
| Capital expenditures | 30,762 | 7,442 | 15,263 | 11,571 | - | 65,038 | ||||||||||||
| Canada | United States | Australia | International | Total | ||||||
| Revenue | $ | 294,720 | $ | 260,102 | $ | 102,184 | $ | 2,954 | $ | 659,960 |
| Non-current assets (2) | 364,318 | 131,534 | 125,330 | - | 621,182 | |||||
As at and for the nine months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)
| As at and for the nine months ended | Contract | Rentals and | Compression | Well | Corporate | Total | ||||||||||||
| September 30, 2023 | Drilling | Transportation | and Process | Servicing | (1) | |||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 212,633 | $ | 65,362 | $ | 322,207 | $ | 78,436 | $ | - | $ | 678,638 | ||||||
| Cost of services | 153,466 | 35,725 | 273,607 | 59,472 | - | 522,270 | ||||||||||||
| Selling, general and administration | 7,552 | 6,374 | 10,122 | 3,124 | 6,414 | 33,586 | ||||||||||||
| Other (income) expense | 20 | - | (88 | ) | - | (140 | ) | (208 | ) | |||||||||
| Share-based compensation | - | - | - | - | 1,457 | 1,457 | ||||||||||||
| Depreciation | 28,107 | 14,620 | 7,822 | 9,091 | 781 | 60,421 | ||||||||||||
| Operating income (loss) | 23,488 | 8,643 | 30,744 | 6,749 | (8,512 | ) | 61,112 | |||||||||||
| Gain on sale of property, plant and equipment | 235 | 714 | 836 | 337 | 30 | 2,152 | ||||||||||||
| Finance costs, net | (44 | ) | (63 | ) | (353 | ) | (51 | ) | (4,679 | ) | (5,190 | ) | ||||||
| Net income (loss) before income taxes | 23,679 | 9,294 | 31,227 | 7,035 | (13,161 | ) | 58,074 | |||||||||||
| Goodwill | - | 2,514 | 1,539 | - | - | 4,053 | ||||||||||||
| Total assets | 367,553 | 176,330 | 275,886 | 74,376 | 180 | 894,325 | ||||||||||||
| Total liabilities | 72,824 | 28,851 | 110,391 | 6,980 | 132,751 | 351,797 | ||||||||||||
| Capital expenditures | 40,528 | 5,777 | 6,783 | 6,308 | 235 | 59,631 | ||||||||||||
| Canada | United States | Australia | International | Total | ||||||
| Revenue | $ | 303,329 | $ | 303,617 | $ | 71,692 | $ | - | $ | 678,638 |
| Non-current assets (2) | 393,168 | 129,263 | 46,240 | - | 568,671 | |||||
(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 6 to the Company's Condensed Interim 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 http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
