Total Energy Services (TOT) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly financial results for Q3 2024, driven by stable Canadian and Australian markets, strong North American demand for compression/process equipment, and the Saxon Energy Services acquisition, offsetting weaker U.S. drilling activity.

• Saxon Energy Services Australia acquisition contributed $44.4 million in revenue and $2.1 million in net income since March 7, 2024.

• Substantial share repurchases and $8.7 million returned to shareholders in Q3 via dividends and buybacks; cumulative returns now $323 million.

Financial highlights

• Q3 2024 revenue: $241.9 million, up 4% year-over-year; nine-month revenue: $660.0 million, down 3%.

• Q3 EBITDA: $50.5 million, up 12% year-over-year; nine-month EBITDA: $131.3 million, up 6%.

• Q3 operating income: $27.3 million, up 15% year-over-year; nine-month operating income: $64.0 million, up 5%.

• Q3 net income: $19.7 million, up 2% year-over-year; nine-month net income: $50.6 million, up 2%.

• Gross margin for Q3: 26% (up from 24% last year); nine-month gross margin: 26% (up from 23%).

Outlook and guidance

• Business conditions expected to remain stable in core jurisdictions, supported by strong Asian LNG demand and North American LNG export investments.

• 2024 capital budget increased by $19.8 million, with $13.1 million for Australian rig upgrades; total 2024 capex projected at $147.7 million.

• Three upgraded rigs in Australia to commence operations in Q1 2025 under long-term contracts.

• Remaining 2024 capital commitments of $35.3 million to be funded from $61.9 million cash on hand as of September 30, 2024.

• 2025 capital program to be announced in January, with a disciplined, opportunity-driven approach.