PHX Energy Services Q2 2024 Update

Quick update after Q2 2024

*Disclosure: I own shares in PHX.to. I am not a professional. Please do your own due diligence.

Price: $10.14

MC: 481.9 million

EV: 481.1 million

Yield: 7.9%

1 year performance: +28.9% (not including dividends)

Just about all caught up on earnings from last week.

PHX reported last week. Results were in line of my expectations and the stock was essentially flat. They do not host conference calls, so all information is from the filings.

*all numbers in CAD unless stated otherwise

Quarter Recap

• Revenue was 154.2 million vs 155.6 million last year.

• EBITDA was 30 million vs 34.8 million last year.

• Canada showed strong activity.

• US showed weakness due to lower activity.

• Capex was 26.8 million gross and 19.4 net of equipment sales.

  • YTD was 56.4 million gross and 36.7 net of equipment sales.

  • Budget for 2024 net of equipment sales was 75 million.

  • They mentioned they expect to require less capex in 2025.

• The outlook seemed reasonable.

  • Expecting growth in MENA region without requiring material capex.

• ROCS update - given the lower activity and higher capex, they have outspent the budget this quarter and YTD.

• Subsequent to quarter end they announced the renewal of their NCIB. It’s limited to 18,403 shares per day and 1 block per week.

Valuation

I have them at 3.6x EV/ttm EBITDA and pretty much the same using 2024 estimates.

Closing Thoughts

I continue to hold my shares in my OFS basket. I think the rest of the year will be muted with ROCS strategy. 2025 could be interesting if we get renewed interest in energy names.

Thanks for reading.

Dean

* long PHX.to