STEP Energy Services Ltd (TSX:STEP)
C$ 5.04 -0.04 (-0.79%) Market Cap: 361.26 Mil Enterprise Value: 462.33 Mil PE Ratio: 5.60 PB Ratio: 0.88 GF Score: 71/100
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Q2 2024 Step Energy Services Ltd Earnings Call Transcript

Aug 07, 2024 / 03:00PM GMT
Release Date Price: C$4.19 (+0.96%)

Key Points

Positve
  • STEP Energy Services Ltd (SNVVF) reported consolidated revenues of $231 million for Q2 2024, which is consistent with the prior year's Q2 revenue.
  • The Canadian segment showed a year-over-year increase in adjusted EBITDA, reaching $37 million compared to $33 million in Q2 2023.
  • The company successfully reduced its net debt from $108 million at the end of Q1 to $76 million by the end of Q2.
  • STEP Energy Services Ltd (SNVVF) has a strong market position in the US coiled tubing service line, with increasing activity levels both sequentially and year over year.
  • The company has invested in upgrading its asset base to Tier 4 dual fuel capable systems, demonstrating a commitment to leading-edge technology.
Negative
  • Q2 2024 revenues were down from the previous quarter's $320 million, reflecting challenging market conditions.
  • Adjusted EBITDA margin decreased to 18% in Q2 2024 from 25% in Q1 2024 and 20% in Q2 2023.
  • The US fracturing service line faced significant challenges due to competitive market dynamics, contributing less to revenue compared to previous years.
  • Free cash flow for Q2 2024 was $20 million, down from $35 million in Q2 2023 and $54 million in Q1 2024.
  • The company anticipates a slowdown in activity in both Canada and the US as clients reach the end of their capital budgets by the fourth quarter.
Operator

Good morning, and welcome, ladies and gentlemen, to STEP Energy Services second-quarter 2024 conference call and webcast. (Operator Instructions) This call is being recorded on Wednesday, August 7, 2024.

I would now like to turn the conference over to Mr. Steve Glanville, President and CEO. Please go ahead.

Steve Glanville
Step Energy Services Ltd - President, Chief Executive Officer, Executive Director

Thank you, operator, and good morning. Welcome to our Q2 2024 conference call. My name is Steve Glanville, and I'm the President and CEO of STEP Energy Services. I'd like to invite Klaas Deemter, our CFO, to provide an overview of our financial results for Q2, and then I'll provide some comments on operating conditions in the quarter and what we're seeing for the remainder of 2024. Then we'll open the call up for questions.

Over to you, Klaas.

Klaas Deemter
Step Energy Services Ltd - Chief Financial Officer

Thanks, Steve, and good morning, everyone. My comments today will include forward-looking

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