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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