The following is a summary of the STEP Energy Services Ltd. (SNVVF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• STEP Energy reported Q2 2024 consolidated revenues of $231 million, consistent with the prior year but a decrease from Q1 2024's revenue of $320 million.

• Adjusted EBITDA for Q2 was $42 million, representing a 20% margin, a decrease from $80 million or a 25% margin in Q1.

• Net income for Q2 was $11 million, or $0.14 per diluted share, down from $41 million or $0.55 per diluted share in Q1.

• Free cash flow for Q2 was $20 million, down from $54 million in Q1.

Business Progress:

• Continued focus on long-term agreements with large clients for predictable utilization.

• Reinvestment into technological upgrades and the reactivation of additional coiled tubing unit.

• Debt reduction remains a key objective with a significant decrease in net debt to $76 million from $108 million at the end of Q1.

Opportunities:

• Positive impact expected from increased oil flow in 2025 due to TMX and LNG Canada completions, with anticipation of strong performance in Q1 2025.

• Geographic diversity allows flexibility to shift assets to the most profitable regions with the potential reactivation of more coiled tubing equipment as market conditions permit.

Risks:

• Lower U.S. fracturing revenues due to competitive market dynamics and fewer operating days. Fracturing equipment might be idled or repositioned if not producing profitably.

• Possible continued economic impact on U.S. oil markets with a challenging outlook for U.S. fracturing contributions through the remainder of the year.

More details: STEP ENERGY SERVICES LTD IR

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