Q3 2024 Source Energy Services Ltd Earnings Call Transcript
Key Points
- Source Energy Services Ltd (SCEYF) reported a record third consecutive quarter in sand volumes, total revenues, and EBITDA.
- The company achieved an 83% utilization rate on its Sahara fleet, indicating strong operational efficiency.
- Source Energy Services Ltd (SCEYF) successfully acquired sand trucking assets from the PVT Group, enhancing its last-mile logistics capabilities.
- The company reported a significant increase in sand revenue, up by $40 million from the third quarter of 2023.
- Free cash flow for the third quarter was $20.1 million, marking a $12.7 million increase compared to the previous year.
- The weakening Canadian dollar negatively impacted gross margins due to higher U.S. denominated costs.
- Cost of sales increased by $45.9 million compared to the third quarter of 2023, driven by higher sales volumes and rail costs.
- Operating general and administrative expenses rose by $1.6 million, primarily due to increased compensation and royalty costs.
- The company is facing upcoming maturities of both its notes and ABL facility, necessitating refinancing efforts.
- Adjusted gross margin per metric tonne slightly decreased compared to the same period last year, impacted by extreme heat affecting rail transportation.
Good day, and welcome to the Source Energy Services third-quarter 2024 results conference call. (Operator Instructions) Please note, today's event is being recorded.
I would now like to turn the conference over to Scott Melbourn, Chief Executive Officer. Please go ahead.
Thank you. Good morning, and welcome to Source Energy Services' third-quarter 2024 conference call. My name is Scott Melbourn, I'm the CEO of Source. I'm joined today by Derren Newell, our CFO. This morning, we will provide a brief overview of the quarter, which will immediately be followed by a question-and-answer period.
Before I get started, I would like to refer everyone to the financial statements and the MD&A that were posted to SEDAR and the company's website last night and remind you of the advisory on forward-looking information found in our MD&A and press release. On this call, Source's numbers are in Canadian dollars, metric tonnes and we will refer to adjusted gross
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