PHX Energy Services Quick Update - $PHX.to

Quick update after Q4 2023

*Disclosure: I own shares in PHX

Price: $8.90

MC: 420 million CAD

EV: 415 million CAD

Yield: 9%

1 year performance:

PHX reported yesterday after the close. Results were pretty much in line with my expectations, the outlook was a bit weaker than I was expecting, and the stock is down 5% at the time of writing.

Quarter Recap

• Consolidated revenue up 5%.

  • US revenue down 3% to 122 million.

  • Canadian revenue up 38% to 42.4 million.

• EBITDA was up 4% yoy.

• This was the company’s highest revenue and EBITDA year in the company’s history.

• SG&A was lower by 7% to 18 million for Q4.

  • This was mainly due to SBC. Removing the impact of SBC, revenue would have been 1 million higher.

Closing Thoughts

Not much to say. I like this in my basket of OFS companies. I like the ROCS disclosure and restraint around growth capex.

2024 will have tougher comps relative to 2023, so I am not sure exactly what type of growth (if any) they will demonstrate. They expect Q1 to be lower in 2024 than 2023. How much lower, I’m not sure.

I don’t think the market will like the uncertainty in the short term. So until we get Q1 financials or a rip higher in oil prices, PHX shares will be under pressure. I’ve experienced a company’s shares trading higher as they show weaker yoy quarters as the market is forward looking. Maybe that’s just my inner bagholder talking, or maybe we see this for PHX in 2024.

Thanks for reading.

Dean

* long PHX.to