The following is a summary of the Enerflex Ltd. (EFXT) Q2 2024 Earnings Call Transcript:
Financial Performance:
Enerflex reported consolidated revenue of $614 million in Q2 2024, up from $579 million in Q2 2023 and $638 million in Q1 2024.
Gross margin before depreciation and amortization was $173 million or 28% of revenue in Q2 2024, compared to $145 million or 25% of revenue in Q2 2023.
Adjusted EBITDA reached $122 million, compared to $107 million in Q2 2023. Free cash flow in the first half of the year was recorded at $72 million, reflecting disciplined capital management.
Business Progress:
Enerflex's Engineered Systems line reported bookings of $331 million in the quarter with a strong backlog of $1.3 billion, promising revenue conversion over the next 12 months.
Energy Infrastructure business remains robust, with particularly strong contract compression operations in the US, benefiting from high demand in the Permian Basin.
Project suspensions in Kurdistan due to force majeure with ongoing evaluation in collaboration with client partners.
Opportunities:
The sustained high utilization of the U.S. Contract Compression fleet and contracted international product lines suggest stable future revenue streams.
Enerflex is focusing on optimizing capital spending and expects full year 2024 CapEx to be at the low end of the guidance range, aligning with targeted growth capital expenditure on customer-supported opportunities.
Risks:
Monitoring impacts of weak natural gas prices on customer demand, especially in North America, could influence operational adjustments or shifts in market strategies.
More details: Enerflex IR
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