Ensign Energy Services (ESI) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was CAD 436.5 million (or $436.5M), up 1% year-over-year, with Canadian growth offsetting declines in the US and international segments.

• Adjusted EBITDA declined 13% to CAD 102.4 million ($102.4M), impacted by lower activity and one-time U.S. rig costs; net income improved to $3.7 million from a $1.2 million loss in Q1 2024.

• Debt reduction accelerated, with CAD 23 million ($23.2M) paid down in Q1 2025, progressing toward a CAD 200 million ($200M) annual target and a three-year CAD 600 million ($600M) goal.

• Funds flow from operations decreased 11% to $96.6 million, and cash provided by operating activities dropped 42% year-over-year.

• Working capital deficit improved slightly to $98.0 million at March 31, 2025.

Financial highlights

• Canadian revenue rose 10% to $152.0 million, US revenue declined 1% to $205.8 million, and international revenue fell 7% to $78.7 million.

• Adjusted EBITDA per share was $0.56 (basic), down from $0.64; net income per share was $0.02 (basic), up from $(0.01).

• Depreciation expense fell 7% to $81.9 million, reflecting fully depreciated assets and currency effects.

• Interest expense dropped 23% to $20.5 million, aided by lower debt and effective rates.

• Cash provided by operating activities was $54.3 million, down from $93.9 million.

Outlook and guidance

• Targeting CAD 200 million ($200M) debt reduction in 2025, reaffirming a CAD 600 million ($600M) reduction goal from 2023–2025.

• Maintenance capital expenditures for 2025 are budgeted at CAD 164 million ($164M), with $8 million for selective growth.

• Canadian activity expected to remain strong, supported by pipeline expansions; US and international activity steady but faces risks from tariffs, sanctions, and policy changes.

• Interest expense for 2025 projected at CAD 60-65 million, down from CAD 100 million in 2024.

• Forward revenue under contract is about CAD 750 million, supporting 100-110 drilling rigs and 50-60 well-servicing rigs daily.