Total Energy Services Inc. Reports Record Q2 Results

Total Energy Services Inc. (TESI) has reported a remarkable performance for its second quarter of 2024, reflecting a slight revenue increase of 2% compared to the same quarter last year. This growth is attributed to steady industry conditions in Canada and Australia, heightened demand for compression and process equipment in North America, and the successful integration of Saxon Energy Services.

The company’s financial standing remains robust, with CAD71.8 million in working capital and CAD24.8 million in cash. Total Energy is well-positioned to generate considerable free cash flow throughout the remainder of the year and has strategically lowered its outstanding share count by 2.8% through share buybacks.

### Key Highlights
– Total Energy’s consolidated revenue increased by 2% year-over-year, driven by stable industry conditions and strong demand for specific equipment.
– Revenue distribution showed 46% from the United States, 36% from Canada, and 18% from Australia.
– The Compression Process Services (CPS) segment was the leading revenue contributor, accounting for 51% of total revenue.
– There was a significant increase in revenue and EBITDA within the Contract Drilling Services (CDS) segment.
– Safety standards are emphasized, as evidenced by a rolling 12-month total recordable incident frequency of less than 1.
– CEO Daniel Halyk acknowledged employees’ contributions to the company’s achievements.

### Company Outlook
– The second half of the year appears promising, with anticipated growth in the Australian market and sustained demand in North America.
– Significant free cash flow generation is expected.

### Challenges
– Some capital expenditures may carry over from 2024 to 2025.
– Fewer upcoming opportunities for upgrading equipment expenditures are anticipated.

### Opportunities
– The acquisition of Saxon Energy Services has outperformed expectations, enabling the reuse of previously idle equipment.
– The backlog for fabrication sales in the CPS segment continues to increase.

### Areas of Concern
– Specific details regarding the anticipated carryover of capital expenditures into 2025 were not provided.

### Q&A Highlights
– Daniel Halyk discussed the capital budgeting process, noting that the preliminary maintenance capital budget will be announced in early January 2024 and that the majority of major projects are on track to be funded by year-end with approximately CAD30 million remaining.

Total Energy Services Inc. remains focused on expanding its growth strategy and improving operational efficiency. Daniel Halyk’s discussion during the earnings call emphasized the company’s sound financial health and strategic initiatives, positioning it for future success. With a strong second quarter performance and a favorable outlook for the rest of the year, Total Energy Services appears ready to tackle challenges ahead.

In concluding remarks, Halyk expressed gratitude to all employees for their hard work and anticipated continued success in the upcoming quarters.