The following is a summary of the CES Energy Solutions Corp. (CESDF) Q1 2024 Earnings Call Transcript:
Financial Performance:
CES Energy Solutions delivered record Q1 2024 revenue of $588.6 million, up nearly 5% from the previous record in Q4 2022.
The highest quarterly EBITDA of $102 million was reported, marking a 20% increase from the previous quarter.
Improvements were seen in the EBITDA margin, reaching 17.3%, higher than Q1 of the previous year and the last quarter.
Free cash flow during the quarter was $57.4 million.
The total debt to trailing 12 months EBITDA ratio decreased to a new low of 1.28 times from 1.49 times at the end of 2023.
Business Progress:
CES continues to support growth with planned necessary investments.
Opportunities in related business lines or new geographies are being explored to enhance value and returns.
A proposal to renew its normal course issuer bid (NCIB) plan in July 2024 is expected, aiming to repurchase the maximum number of shares available under the NCIB.
Leverage reductions are planned, with a goal of reaching approximately 1 times total debt to trailing 12 months EBITDAC.
Recorded growth in multiple divisions, namely the Canadian drilling fluids division, the US drilling fluids group, and Canadian production chemicals business.
CES anticipates further growth in revenue and free cash flow via market share expansion in each business segment.
Opportunities for strategic entry into international markets and potential tuck-in acquisitions in North America are being evaluated.
The company is considering expansion through new geographies based on opportunities or through acquisition of small businesses in these areas.
The marked increase in US Drilling Fluids business indicates potential growth. Further expansion into the Haynesville area is also planned with a focus on service, attention to detail and cost-efficiency for maintaining the growth trajectory.
More details: CES ENERGY SOLUTIONS CORP IR
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