Trican Well Service (TCW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 26% year-over-year to CAD 211.8 million, with profit of CAD 16.2 million (CAD 0.08 per share), and improvements across all major financial categories.

• Adjusted EBITDAS reached CAD 45.2 million (21% margin), and adjusted EBITDA was CAD 40.7 million (19% margin), both up from the prior year.

• Free cash flow for Q2 2024 was CAD 20.9 million, with working capital of CAD 148.4 million and CAD 36 million in cash at quarter end.

• Frac division revenue rose 30% year-over-year, with EBITDA up over 50%; cement division maintained high utilization and strong results.

• Coiled tubing revenue grew 18% year-over-year, though profitability remains challenged due to scale; strategic partnership with ACOS aims to expand market share.

Financial highlights

• Revenue for Q2 2024 was CAD 211.8 million, with adjusted EBITDA of CAD 40.7 million (19% margin), both up ~20% year-over-year.

• Adjusted EBITDAS margin for Q2 2024 was 21%, up from 20% in Q2 2023.

• Free cash flow generated was CAD 20.9 million; CapEx totaled CAD 25.9 million (maintenance: CAD 14 million, upgrades: CAD 11.9 million).

• Dividends paid in Q2 2024 totaled CAD 9.0 million (CAD 0.045 per share), up from CAD 8.6 million in Q2 2023.

• Gross profit margin improved to 16% in Q2 2024 from 13% in Q2 2023.

Outlook and guidance

• Canadian oilfield activity expected to grow modestly through 2024 and beyond, supported by new export capacity and LNG projects.

• Q2 2024 activity was stronger than anticipated as customers accelerated capital programs to address water constraints.

• LNG export growth and TMX expansion support long-term demand; first LNG cargos expected late 2024 or early 2025.

• Demand for Tier 4 DGB fracturing fleets and electrified ancillary equipment remains robust; continued investment planned.

• Potential for additional frac fleet activation in 2025 if activity increases.