The following is a summary of the STEP Energy Services Ltd. (SNVVF) Q3 2024 Earnings Call Transcript:
Financial Performance:
STEP Energy reported a consolidated revenue of CAD256 million in Q3, maintaining roughly the same level as the previous year's Q3 revenue of CAD255 million.
Adjusted EBITDA was CAD44 million with a 17% margin, compared to a higher CAD52 million with a 21% margin in the prior year's Q3.
The company reported a net loss of CAD5.5 million, or CAD0.08 per diluted share, after recognizing an impairment of CAD12.7 million on US assets.
Business Progress:
In the Canadian market, revenue increased and adjusted EBITDA improved significantly due to increased activity and operating efficiencies in fracturing operations.
Investment in upgrading fracturing fleets to Tier 4 dual fuel engine technology helps reduce environmental impact and align with clients' sustainability demands.
Significant operational achievements include pumping a record 570,000 metric tons of sand in Q3 and setting a new record in coiled tubing operations in the Williston Basin.
The company has adjusted the 2024 capital budget downwards in response to slowing market conditions.
Opportunities:
The rising proppant intensity in operations, such as those seen in the Montney wells, presents STEP with opportunities for increased service provision.
Expansion in LNG capacities and export capabilities, especially in North America, predicts a promising future demand for STEP's services.
Risks:
The impairment in the US segment indicates ongoing challenges and weak conditions in the US fracturing market.
Persistent pricing pressures are expected to continue affecting margins into the first half of 2025.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
