Total Energy Services Inc. press release
Total Energy Services Inc. Announces Q4 2024 Results
TSX - Toronto Stock Exchange · Oil · Natural Gas · Canada
CALGARY, Alberta, March 06, 2025 (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, 2024.
Financial Highlights ($000’s except per share data)
| | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | | | 2024 | | 2023 | | Change | | | 2024 | | 2023 | Change | | | | Revenue | $ | 246,816 | $ | 213,758 | | 15 | % | | $ | 906,776 | $ | 892,396 | 2 | % | | Operating income | | 15,892 | | 23,510 | | (32 | %) | | | 79,842 | | 84,622 | (6 | %) | | EBITDA (1) | | 40,565 | | 45,276 | | (10 | %) | | | 171,845 | | 168,961 | 2 | % | | Cashflow | | 43,413 | | 44,457 | | (2 | %) | | | 162,435 | | 163,321 | (1 | %) | | Net income (loss) | | 10,102 | | (7,861 | ) | nm | | | 60,725 | | 41,594 | 46 | % | | | Attributable to shareholders | | 10,116 | | (7,847 | ) | nm | | | 60,801 | | 41,625 | 46 | % | | | | | | | | | | | | | | | | | | | Per Share Data (Diluted) | | | | | | | | | | | | | | | | EBITDA (1) | $ | 1.04 | $ | 1.11 | | (6 | %) | | $ | 4.33 | $ | 4.11 | 5 | % | | Cashflow | $ | 1.12 | $ | 1.09 | | 3 | % | | $ | 4.10 | $ | 3.97 | 3 | % | | | | | | | | | | | | | | | | | | Attributable to shareholders: | | | | | | | | | | | | | | | | Net income (loss) | $ | 0.26 | $ | (0.19 | ) | nm | | $ | 1.53 | $ | 1.01 | 51 | % | | | | | | | | | | | | | | | | | | | Common shares (000’s) ( 4) | | | | | | | | | | | | | | | | Basic | | 38,171 | | 39,975 | | (5 | %) | | | 39,080 | | 40,409 | (3 | %) | | Diluted | | 38,828 | | 40,623 | | (4 | %) | | | 39,662 | | 41,147 | (4 | %) | | | | | | | | | | | | | | | | | | | | | | | | | | December 31 | | December 31 | | | | | | Financial Position at | | | | | | | | 2024 | | 2023 | Change | | | | | Total Assets | | | | | | | $ | 937,708 | $ | 861,658 | 9 | % | | | | Long-Term Debt and Lease Liabilities (excluding current portion) | 79,171 | | 100,834 | (21 | %) | | | | | | | | | | | Working Capital (2) | | | | | | | | 78,737 | | 123,439 | (36 | %) | | | | Net Debt (3) | | | | | | | | 434 | | - | nm | | | | | Shareholders’ Equity | | | | | | | | 571,043 | | 530,758 | 8 | % | | | | | | | | | | | | | | | | | | |
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 December 31, 2024 reflect relatively stable industry conditions in Canada and Australia and lower drilling and completion activity levels in the United States (the “U.S.”). Included in the 2024 financial results is the contribution from Saxon Energy Services Australia Pty Ltd. (“Saxon”) from March 7, 2024 when Saxon was acquired. 2024 fourth quarter results were negatively impacted by $4.1 million compared to the fourth quarter of 2023 as a result of foreign exchange translation differences.
Contract Drilling Services (“CDS”)
| | | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | | | | 2024 | | | 2023 | | Change | | 2024 | | | 2023 | | Change | | | | Revenue | $ | 83,878 | | $ | 74,700 | | 12% | | $ | 319,612 | | $ | 287,333 | | 11% | | | EBITDA (1) | $ | 18,556 | | $ | 23,880 | | (22% | ) | $ | 75,970 | | $ | 75,710 | | - | | | EBITDA (1) as a % of revenue | | 22 % | | | 32% | | (31% | ) | | 24 % | | | 26% | | (8% | ) | | Operating days ( 2) | | 2,490 | | | 2,588 | | (4% | ) | | 10,177 | | | 10,311 | | (1% | ) | | Canada | | 1,650 | | | 1,890 | | (13% | ) | | 6,604 | | | 6,913 | | (4% | ) | | United States | | 122 | | | 356 | | (66% | ) | | 1,155 | | | 2,052 | | (44% | ) | | Australia | | 718 | | | 342 | | 110% | | | 2,418 | | | 1,346 | | 80% | | | Revenue per operating day ( 2) , dollars | $ | 33,686 | | $ | 28,864 | | 17% | | $ | 31,405 | | $ | 27,867 | | 13% | | | Canada | | 27,515 | | | 27,162 | | 1% | | | 26,481 | | | 26,076 | | 2% | | | United States | | 35,787 | | | 30,483 | | 17% | | | 29,329 | | | 28,700 | | 2% | | | Australia | | 47,511 | | | 36,582 | | 30% | | | 45,847 | | | 35,791 | | 28% | | | Utilization | | 26 % | | | 30% | | (13% | ) | | 27 % | | | 30% | | (10% | ) | | Canada | | 24 % | | | 27% | | (11% | ) | | 23 % | | | 25% | | (8% | ) | | United States | | 11 % | | | 32% | | (66% | ) | | 26 % | | | 47% | | (45% | ) | | Australia | | 46 % | | | 74% | | (38% | ) | | 44 % | | | 74% | | (41% | ) | | Rigs, average for period | | 105 | | | 94 | | 12% | | | 104 | | | 94 | | 11% | | | Canada | | 76 | | | 77 | | (1% | ) | | 77 | | | 77 | | - | | | United States | | 12 | | | 12 | | - | | | 12 | | | 12 | | - | | | Australia | | 17 | | | 5 | | 240% | | | 15 | | | 5 | | 200% | |
(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 .
_
Fourth quarter CDS segment activity was lower in 2024 compared to 2023 due to a substantial decline in U.S. activity, an extended holiday shutdown in Canada and shutdowns in Australia due to extended wet weather conditions. Saxon contributed $21.4 million of CDS segment revenue during the fourth quarter of 2024. Negatively impacting segment EBITDA for the fourth quarter of 2024 were expenses incurred with the reactivation of several upgraded rigs in Australia and Canada. The substantial year over year increase in fourth quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates as well as increased rates received for recently upgraded drilling rigs.
Rentals and Transportation Services (“RTS”)
| | | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | | | | 2024 | | | 2023 | | Change | | 2024 | | | 2023 | | Change | | | | Revenue | $ | 18,973 | | $ | 19,544 | | (3% | ) | $ | 78,587 | | $ | 84,906 | | (7% | ) | | EBITDA (1) | $ | 7,794 | | $ | 6,927 | | 13% | | $ | 31,752 | | $ | 30,904 | | 3% | | | EBITDA (1) as a % of revenue | | 41 % | | | 35% | | 17% | | | 40 % | | | 36% | | 11% | | | Revenue per utilized piece of equipment, dollars | $ | 12,656 | | $ | 14,139 | | (10% | ) | $ | 56,262 | | $ | 55,041 | | 2% | | | Pieces of rental equipment | | 7,820 | | | 7,700 | | 2% | | | 7,820 | | | 7,700 | | 2% | | | Canada | | 6,880 | | | 6,790 | | 1% | | | 6,880 | | | 6,790 | | 1% | | | United States | | 940 | | | 910 | | 3% | | | 940 | | | 910 | | 3% | | | Rental equipment utilization | | 19 % | | | 18% | | 6% | | | 18 % | | | 18% | | - | | | Canada | | 16 % | | | 16% | | - | | | 16 % | | | 16% | | - | | | United States | | 38 % | | | 33% | | 15% | | | 34 % | | | 35% | | (3% | ) | | Heavy trucks | | 68 | | | 67 | | 1% | | | 68 | | | 67 | | 1% | | | Canada | | 47 | | | 46 | | 2% | | | 47 | | | 46 | | 2% | | | 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.
RTS segment revenue for the fourth quarter of 2024 decreased compared to 2023 due to lower activity levels in the U.S. Despite lower U.S. revenues, fourth quarter segment EBITDA increased in 2024 compared to a 2023 due a 3% year over year increase in Canadian revenue and a 41% increase in segment operating margin resulting from a change in the mix of equipment operating and lower equipment reactivation costs in both Canada and the U.S.
Compression and Process Services (“CPS”)
| | | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | | | | 2024 | | | 2023 | | Change | | 2024 | | | 2023 | | Change | | | | Revenue | $ | 116,397 | | $ | 95,439 | | 22% | | $ | 413,944 | | $ | 417,646 | | (1% | ) | | EBITDA (1) | $ | 17,356 | | $ | 14,074 | | 23% | | $ | 65,151 | | $ | 53,817 | | 21% | | | EBITDA (1) as a % of revenue | | 15 % | | | 15% | | - | | | 16 % | | | 13% | | 23% | | | Horsepower of equipment on rent at period end | | 50,988 | | | 39,496 | | 29% | | | 50,988 | | | 39,496 | | 29% | | | Canada | | 17,298 | | | 13,856 | | 25% | | | 17,298 | | | 13,856 | | 25% | | | United States | | 33,690 | | | 25,640 | | 31% | | | 33,690 | | | 25,640 | | 31% | | | Rental equipment utilization during the period (HP) ( 2) | | 76 % | | | 67% | | 13% | | | 76 % | | | 73% | | 4% | | | Canada | | 72 % | | | 76% | | (5% | ) | | 70 % | | | 77% | | (9% | ) | | United States | | 78 % | | | 61% | | 28% | | | 79 % | | | 70% | | 13% | | | Sales backlog at period end, $ million | $ | 189.0 | | $ | 162.8 | | 16% | | $ | 189.0 | | $ | 162.8 | | 16% | |
(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 .
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2024 fourth quarter CPS segment revenue was higher compared to 2023 due to increased fabrication, parts and service and rental activity in both Canada and the U.S. Improved fabrication efficiencies and a significant increase in compression horsepower on rent contributed to the year over year increase in segment EBITDA for 2024. The quarter end fabrication sales backlog increased by $26.2 million compared to the $162.8 million backlog at December 31, 2023 and remained consistent with the $189.0 million backlog at September 30, 2024.
Well Servicing (“WS”)
| | | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | | | | 2024 | | | 2023 | | Change | | 2024 | | | 2023 | | Change | | | | Revenue | $ | 27,568 | | $ | 24,075 | | 15% | | $ | 94,633 | | $ | 102,511 | | (8% | ) | | EBITDA (1) | $ | 3,191 | | $ | 3,997 | | (20% | ) | $ | 14,535 | | $ | 19,833 | | (27% | ) | | EBITDA (1) as a % of revenue | | 12 % | | | 17% | | (29% | ) | | 15 % | | | 19% | | (21% | ) | | Service hours ( 2) | | 25,673 | | | 24,631 | | 4% | | | 92,980 | | | 106,551 | | (13% | ) | | Canada | | 14,028 | | | 13,293 | | 6% | | | 51,257 | | | 52,281 | | (2% | ) | | United States | | 2,058 | | | 4,707 | | (56% | ) | | 11,301 | | | 23,488 | | (52% | ) | | Australia | | 9,587 | | | 6,631 | | 45% | | | 30,422 | | | 30,782 | | (1% | ) | | Revenue per service hour ( 2) , dollars | $ | 1,074 | | $ | 977 | | 10% | | $ | 1,018 | | $ | 962 | | 6% | | | Canada | | 956 | | | 931 | | 3% | | | 960 | | | 949 | | 1% | | | United States | | 884 | | | 924 | | (4% | ) | | 883 | | | 969 | | (9% | ) | | Australia | | 1,287 | | | 1,109 | | 16% | | | 1,165 | | | 980 | | 19% | | | Utilization ( 3) | | 28 % | | | 29% | | (3% | ) | | 26 % | | | 31% | | (16% | ) | | Canada | | 28 % | | | 26% | | 8% | | | 26 % | | | 26% | | - | | | United States | | 19 % | | | 47% | | (60% | ) | | 26 % | | | 59% | | (56% | ) | | Australia | | 36 % | | | 25% | | 44% | | | 29 % | | | 29% | | - | | | Rigs, average for period | | 79 | | | 79 | | - | | | 79 | | | 79 | | - | | | Canada | | 55 | | | 56 | | (2% | ) | | 55 | | | 56 | | (2% | ) | | United States | | 12 | | | 11 | | 9% | | | 12 | | | 11 | | 9% | | | 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 ) T he 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 WS segment revenue increased in 2024 as compared to 2023 due to increased activity in Canada and Australia that offset a substantial decline in U.S. activity. Segment EBITDA was lower as higher operating income in Canada was more than offset by the decline in United States operating income due to lower activity and lower operating income in Australia due to activity shutdowns resulting from extended wet weather conditions. Also negatively impacting 2024 fourth quarter operating income and EBITDA in Australia and Canada were expenses incurred to reactivate upgraded rigs.
Corporate
During the fourth 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 and net of disposals, $136.1 million of capital expenditures were made in 2024.
Total Energy exited the fourth quarter of 2024 with $78.7 million of positive working capital, including $38.4 million of cash, and $105 million of available credit under its $175 million of revolving bank credit facilities. Included in current liabilities is a $40.9 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 bank debt at December 31, 2024 was 4.45%.
Outlook
Global political and economic uncertainty, including recent threats of tariffs, continues to impair visibility for the energy services industry. Despite this uncertainty, industry conditions remain relatively stable. Contributing to this stability are substantial ongoing 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. The expected completion of the LNG Canada liquified natural gas export facility in mid-2025, and the resultant 1.8 billion cubic feet per day of additional demand for Canadian natural gas, continues to provide a tailwind for Canadian natural gas drilling and completion activity despite relatively weak Canadian natural gas spot market prices.
Total Energy’s previously announced 2025 preliminary capital budget of $61.9 million includes $34.3 million of growth capital. Included in 2025 growth capital is $27.8 million for Canadian drilling and service rig upgrades and $6.5 million for continued growth of the North American natural gas compression rental fleet and parts and service business. In addition, $16.6 million of 2024 growth capital primarily related to Australian drilling and service rig upgrades carried into 2025. Upgrades to one Saxon drilling rig were completed and said rig commenced drilling in mid-February under a long term contract. Upgrades to another Saxon drilling rig and an Australian service rig are expected to be completed by the second quarter of 2025 after which they will commence operations under long term contracts. An additional $27.6 million has been budgeted for 2025 capital maintenance and includes equipment recertifications and maintenance in all business segments as well as the purchase of new drill pipe. Total Energy expects to fund its capital expenditure program with cash on hand and cash flow from operations.
Dividend Increase
The Board of Directors of Total Energy has declared a dividend of $0.10 per common share for the quarter ended March 31, 2025. This represents an 11% increase from the fourth quarter 2024 dividend. The dividend is payable on April 15, 2025 to shareholders of record on March 31, 2025. 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 7, 2025 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 (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 April 7, 2025 by dialing (855) 669-9658 (passcode 9001185).
Selected Financial Information
Selected financial information relating to the three months and year ended December 31, 2024 and 2023 is included in this news release. This information should be read in conjunction with the 2024 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 2024 Annual Report.
Consolidated Statements of Financial Position (in thousands of Canadian dollars) (audited)
| | | | December 31 | | December 31 | | | | | | | 2024 | | | 2023 | | | | | | | | | | | | Assets | | | | | | | | | Current assets: | | | | | | | | | Cash and cash equivalents | | $ | 38,419 | | $ | 47,935 | | | Accounts receivable | | | 149,048 | | | 137,604 | | | Inventory | | | 104,091 | | | 98,179 | | | Prepaid expenses and deposits | | | 17,640 | | | 16,735 | | | | | | 309,198 | | | 300,453 | | | | | | | | | | | | Property, plant and equipment | | | 622,499 | | | 557,152 | | | Deferred income tax asset | | | 1,958 | | | - | | | Goodwill | | | 4,053 | | | 4,053 | | | | | $ | 937,708 | | $ | 861,658 | | | | | | | | | | | | Liabilities & Shareholders' Equity | | | | | | | | | Current liabilities: | | | | | | | | | Accounts payable and accrued liabilities | | $ | 125,106 | | $ | 116,794 | | | Deferred revenue | | | 47,225 | | | 39,321 | | | Contingent consideration | | | 2,878 | | | - | | | Income taxes payable | | | 4,508 | | | 9,771 | | | Dividends payable | | | 3,429 | | | 3,198 | | | Current portion of lease liabilities | | | 6,368 | | | 5,880 | | | Current portion of long-term debt | | | 40,947 | | | 2,050 | | | | | | 230,461 | | | 177,014 | | | | | | | | | | | | Long-term debt | | | 70,000 | | | 90,947 | | | | | | | | | | | | Lease liabilities | | | 9,171 | | | 9,887 | | | | | | | | | | | | Deferred income tax liability | | | 57,033 | | | 53,052 | | | | | | | | | | | | Shareholders' equity: | | | | | | | | | Share capital | | | 239,269 | | | 251,283 | | | Contributed surplus | | | 5,279 | | | 4,805 | | | Accumulated other comprehensive loss | | | (11,219 | ) | | (25,506 | ) | | Non-controlling interest | | | 245 | | | 521 | | | Retained earnings | | | 337,469 | | | 299,655 | | | | | | 571,043 | | | 530,758 | | | | | | | | | | | | | | $ | 937,708 | | $ | 861,658 | |
Consolidated Statements of Income (in thousands of Canadian dollars except per share amounts)
| | | | Three months ended December 31 | | Year ended December 31 | | | | | | | | | | | | | 2024 | | | 2023 | | | 2024 | | | 2023 | | | | | | (unaudited) | | (unaudited) | | (audited) | | (audited) | | | | | | | | | | | | | | | | | | | | | Revenue | | $ | 246,816 | | $ | 213,758 | | $ | 906,776 | | $ | 892,396 | | | | | | | | | | | | | | | | | | Cost of services | | | 190,267 | | | 155,976 | | | 681,359 | | | 678,246 | | | Selling, general and administration | | | 13,729 | | | 13,242 | | | 51,241 | | | 46,828 | | | Other expense (income) | | | 2,185 | | | (92 | ) | | 1,465 | | | (300 | ) | | Share-based compensation | | | 599 | | | 729 | | | 2,539 | | | 2,186 | | | Depreciation | | | 24,144 | | | 20,393 | | | 90,330 | | | 80,814 | | | Operating income | | | 15,892 | | | 23,510 | | | 79,842 | | | 84,622 | | | | | | | | | | | | | | | | | | Gain on sale of property, plant and equipment | | | 529 | | | 1,373 | | | 1,673 | | | 3,525 | | | Finance costs, net | | | (1,838 | ) | | (12,235 | ) | | (8,156 | ) | | (17,425 | ) | | Net income before income taxes | | | 14,583 | | | 12,648 | | | 73,359 | | | 70,722 | | | | | | | | | | | | | | | | | | Current income tax (recovery) expense | | | 1,738 | | | 17,077 | | | 8,828 | | | 17,217 | | | Deferred income tax expense | | | 2,743 | | | 3,432 | | | 3,806 | | | 11,911 | | | Total income tax expense | | | 4,481 | | | 20,509 | | | 12,634 | | | 29,128 | | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 10,102 | | $ | (7,861 | ) | $ | 60,725 | | $ | 41,594 | | | | | | | | | | | | | | | | | | Net income (loss) attributable to: | | | | | | | | | | | | | | | Shareholders of the Company | | $ | 10,116 | | $ | (7,847 | ) | $ | 60,801 | | $ | 41,625 | | | Non-controlling interest | | | (14 | ) | | (14 | ) | | (76 | ) | | (31 | ) | | | | | | | | | | | | | | | | | Income (loss) per share | | | | | | | | | | | | | | | Basic | | $ | 0.27 | | $ | (0.20 | ) | $ | 1.56 | | $ | 1.03 | | | Diluted | | $ | 0.26 | | $ | (0.19 | ) | $ | 1.53 | | $ | 1.01 | | | | | | | | | | | | | | | | |