Ensign Energy Services (ESI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $391.8 million, down 9% year-over-year; six-month revenue was $823.1 million, down 10% year-over-year.

• Adjusted EBITDA for Q2 2024 was $100.2 million, a 14% decrease year-over-year; six-month Adjusted EBITDA was $217.7 million, down 11%.

• Net loss attributable to common shareholders was $4.5 million in Q2 2024, compared to net income of $10.3 million in Q2 2023.

• Canadian high-spec rig utilization reached decade highs, with nearly 90% of the active fleet contracted through Q1 2025 and rate increases expected into the winter season.

• U.S. operations saw a 32% year-over-year decline in operating days, offset by increased well servicing and ancillary revenues.

Financial highlights

• Q2 2024 revenue: $391.8 million (down 9%); six months: $823.1 million (down 10%).

• Adjusted EBITDA Q2: $100.2 million (down 14%); six months: $217.7 million (down 11%).

• Net loss Q2: $4.5 million; six months: $5.8 million.

• Cash from operations Q2: $126.4 million (down 24%); six months: $220.3 million (down 19%).

• Interest expense fell 19% to $25.5 million, reflecting lower debt and reduced rates.

Outlook and guidance

• Canadian drilling activity expected to remain strong, supported by expanded pipeline capacity, favorable currency, and high rig utilization.

• U.S. market activity anticipated to remain muted until early-to-mid 2025 as M&A integration continues.

• International activity expected to remain stable, with some rig changes in Oman, Argentina, and Venezuela.

• Gross capital expenditures for 2024 targeted at $147 million, focused on maintenance and selective growth.

• Debt reduction plan on track, with a target of $600 million by end of 2025.