*Disclosure: I own shares in XX. I am not a professional. Please do your own due diligence.
Price: $11.58 CAD
MC: 920 million CAD
EV: 835 million CAD
Yield: 4.5%
1 year performance: -27.5%
PSI reported Thursday night and held a call Friday morning. Results were ahead of my expectations and the stock was up 4.3 %.
*all numbers in CAD unless stated otherwise
Quarter Recap
Revenue came in at 113.2 million vs 104.8 million last year
This was ahead of the 106 million analyst expectations
EBITDA came in at 45.2 million vs 42.4 million last year
North American drilling
Revenue of 75.7 million vs 73.6 or up 3%
EBITDA of 54.4 million vs 50.7
Revenue per industry day ticked up to 1,067 vs 1,000
They noted higher adoption in the press release
International Drilling
Revenue of 14 mil vs 14.6 mil or down 4%
EBITDA of 6.7 mil vs 8.7 mil
A large customer in Argentina is pivoting from conventional wells to unconventional
Completions
Revenue of 16 mil vs 12.8 mil or up 25%
EBITDA of 7.3 mil vs 5.6 mil
Active jobs up to 32 from 28
Revenue per IWS day at 5,486 vs 5,026
Q1 2024 was the first quarter with IWS under the Pason umbrella
Solar and Energy Storage
Revenue at 7.4 mil vs 3.7 mil or up 98%
EBITDA at 1.9 mil vs 2.6 mil
16.7 million spent on capex in the quarter
Down from 19.3 last year
They expect to spend about 65 million this year on capex
This is pretty much in line with last year
They mentioned uncertainty in the short term with tariffs and trade, OPEC+ production plans and recession fears
Call Notes
They noted the uncertainty in the market due to the tariff situation
They manufacture and repair on both sides of the border and have some flexibility.
The overall impact is not “overly significant”
On the completions side of the business
They noted that M&A has settled down and we are seeing a bit of normalizing
Both new customers and existing customers are driving revenue higher
Longer term on Argentina the potential is larger as the country transitions from conventional to unconventional wells
This will nudge them into adopting more technology and should increase the revenue per day for PSI there
M&A doesn’t seem like it’s on their radar here as there is lots of opportunity inside the business
Valuation
I have them about 5.5x EV/ttm EBITDA. I am not sure what to make of the next couple of quarters for any OFS cos. The value is really a couple years down the road.
Closing Thoughts
I think PSI is a very high quality company inside the O&G industry. Their technology is in high demand as producers look to gain efficiency in their operations. I like the focus on growing the business organically from here.
I think this is a decent place to build a position. I own PSI in a basket of OFS cos.
Thanks for reading.
Dean
* long PSI.to