CALGARY, Alberta, March 09, 2023 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months and year ended December 31, 2022.
Financial Highlights
($000’s except per share data)
| Three months ended December 31 |
Year ended December 31 |
||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||
| Revenue | $ | 211,479 | $ | 134,629 | 57% | $ | 759,813 | $ | 431,576 | 76% | |||
| Operating income (loss) | 15,605 | 1,680 | 829% | 49,343 | (1,413) | nm | |||||||
| EBITDA (1) | 35,872 | 22,567 | 59% | 131,320 | 86,015 | 53% | |||||||
| Cashflow | 38,590 | 22,144 | 74% | 130,795 | 80,191 | 63% | |||||||
| Net income (loss) | 12,264 | 1,036 | 1084% | 37,999 | (428) | nm | |||||||
| Attributable to shareholders | 12,244 | 1,049 | 1067% | 38,008 | (360) | nm | |||||||
| Per Share Data (Diluted) | |||||||||||||
| EBITDA (1) | $ | 0.84 | $ | 0.52 | 62% | $ | 3.06 | $ | 1.93 | 59% | |||
| Cashflow | $ | 0.91 | $ | 0.51 | 78% | $ | 3.04 | $ | 1.80 | 69% | |||
| Attributable to shareholders: | |||||||||||||
| Net income (loss) | $ | 0.29 | $ | 0.02 | 1350% | $ | 0.88 | $ | (0.01) | nm | |||
| Common shares (000’s)(4) | |||||||||||||
| Basic | 41,652 | 43,341 | (4%) | 42,216 | 44,384 | (5%) | |||||||
| Diluted | 42,524 | 43,818 | (3%) | 42,980 | 44,673 | (4%) | |||||||
| December 31 | December 31 | ||||||||||||
| Financial Position at | 2022 | 2021 | Change | ||||||||||
| Total Assets | $ | 878,615 | $ | 813,522 | 8% | ||||||||
| Long-Term Debt and Lease Liabilities (excluding current portion) | 127,628 | 196,007 | (35%) | ||||||||||
| Working Capital (2) | 112,154 | 137,304 | (18%) | ||||||||||
| Net Debt (3) | 15,474 | 58,703 | (74%) | ||||||||||
| Shareholders’ Equity | 522,023 | 493,437 | 6% | ||||||||||
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
“nm” – calculation not meaningful
Total Energy’s results for the fourth quarter and year ended December 31, 2022 reflect improved industry conditions compared to the prior year, particularly in North America as wet weather conditions in Australia continued to restrict field operations during the fourth quarter of 2022. Negatively impacting EBITDA and net income for the fourth quarter of 2022 was a $2.1 million unrealized foreign exchange loss arising from the translation of intercompany working capital balances. The Company did not receive any COVID-19 assistance during the quarter as compared to $1.4 million received in the fourth quarter of 2021.
Contract Drilling Services (“CDS”)
| Three months ended December 31 |
Year ended December 31 |
|||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||
| Revenue | $ | 69,185 | $ | 48,766 | 42% | $ | 252,663 | $ | 146,411 | 73% | ||||
| EBITDA (1) | $ | 17,976 | $ | 12,700 | 42% | $ | 60,002 | $ | 35,068 | 71% | ||||
| EBITDA (1) as a % of revenue | 26% | 26% | – | 24% | 24% | – | ||||||||
| Operating days(2) | 2,600 | 2,340 | 11% | 10,485 | 7,334 | 43% | ||||||||
| Canada | 1,588 | 1,342 | 18% | 6,263 | 4,307 | 45% | ||||||||
| United States | 689 | 663 | 4% | 2,734 | 2,041 | 34% | ||||||||
| Australia | 323 | 335 | (4%) | 1,488 | 986 | 51% | ||||||||
| Revenue per operating day(2), dollars | $ | 26,610 | $ | 20,840 | 28% | $ | 24,098 | $ | 19,963 | 21% | ||||
| Canada | 24,751 | 18,632 | 33% | 22,369 | 16,944 | 32% | ||||||||
| United States | 28,270 | 20,979 | 35% | 25,126 | 19,740 | 27% | ||||||||
| Australia | 32,207 | 29,412 | 10% | 29,484 | 33,613 | (12%) | ||||||||
| Utilization | 30% | 27% | 11% | 30% | 21% | 43% | ||||||||
| Canada | 22% | 19% | 16% | 22% | 15% | 47% | ||||||||
| United States | 58% | 55% | 5% | 58% | 43% | 35% | ||||||||
| Australia | 70% | 73% | (4%) | 82% | 54% | 52% | ||||||||
| Rigs, average for period | 94 | 95 | (1%) | 94 | 97 | (3%) | ||||||||
| Canada | 76 | 77 | (1%) | 76 | 79 | (4%) | ||||||||
| United States | 13 | 13 | – | 13 | 13 | – | ||||||||
| Australia | 5 | 5 | – | 5 | 5 | – | ||||||||
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Operating days includes drilling and paid stand-by days.
North American drilling activity continued to recover during the fourth quarter of 2022 as compared to 2021. Increased activity and pricing drove a significant year over year improvement in Canadian fourth quarter financial performance. Increased day rates and modestly higher year over year fourth quarter utilization contributed to improved financial performance in the United States of America (the “United States” or the “U.S.”). In Australia, increased revenue was offset by reactivation costs incurred as rigs previously on standby due to wet weather conditions resumed field operations. The substantial year over year increase in the CDS segment’s fourth quarter EBITDA was driven by increased pricing that offset the absence of COVID-19 assistance and operating cost inflation.
Rentals and Transportation Services (“RTS”)
| Three months ended December 31 |
Year ended December 31 |
|||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||
| Revenue | $ | 20,043 | $ | 10,873 | 84% | $ | 66,954 | $ | 36,974 | 81% | ||||
| EBITDA (1) | $ | 6,171 | $ | 2,712 | 128% | $ | 23,361 | $ | 12,640 | 85% | ||||
| EBITDA (1) as a % of revenue | 31% | 25% | 24% | 35% | 34% | 3% | ||||||||
| Revenue per utilized piece of equipment, dollars | $ | 12,483 | $ | 8,249 | 51% | $ | 44,376 | $ | 33,500 | 32% | ||||
| Pieces of rental equipment | 9,440 | 9,420 | – | 9,440 | 9,420 | – | ||||||||
| Canada | 8,540 | 8,540 | – | 8,540 | 8,540 | – | ||||||||
| United States | 900 | 880 | 2% | 900 | 880 | 2% | ||||||||
| Rental equipment utilization | 17% | 14% | 21% | 16% | 11% | 45% | ||||||||
| Canada | 16% | 12% | 33% | 15% | 10% | 50% | ||||||||
| United States | 33% | 30% | 10% | 29% | 19% | 53% | ||||||||
| Heavy trucks | 71 | 79 | (10%) | 71 | 79 | (10%) | ||||||||
| Canada | 48 | 56 | (14%) | 48 | 56 | (14%) | ||||||||
| United States | 23 | 23 | – | 23 | 23 | – | ||||||||
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Fourth quarter revenue in the RTS segment increased as compared to the same period in 2021 due to higher equipment utilization and improved pricing. Increased equipment utilization, improved pricing and this segment’s significant leverage to higher equipment utilization given its relatively high fixed cost structure contributed to a substantial year over year increase in fourth quarter EBITDA and EBITDA margin despite the absence of COVID-19 assistance and operating cost inflation in 2022.
Compression and Process Services (“CPS”)
| Three months ended December 31 |
Year ended December 31 |
|||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||
| Revenue | $ | 93,668 | $ | 49,314 | 90% | $ | 331,669 | $ | 155,315 | 114% | ||||
| EBITDA (1) | $ | 10,771 | $ | 3,513 | 207% | $ | 36,933 | $ | 20,613 | 79% | ||||
| EBITDA (1) as a % of revenue | 11% | 7% | 57% | 11% | 13% | (15%) | ||||||||
| Horsepower of equipment on rent at period end | 41,243 | 25,755 | 60% | 41,243 | 25,755 | 60% | ||||||||
| Canada | 18,768 | 10,930 | 72% | 18,768 | 10,930 | 72% | ||||||||
| United States | 22,475 | 14,825 | 52% | 22,475 | 14,825 | 52% | ||||||||
| Rental equipment utilization during the period (HP)(2) | 75% | 50% | 50% | 61% | 48% | 27% | ||||||||
| Canada | 66% | 33% | 100% | 47% | 33% | 42% | ||||||||
| United States | 84% | 75% | 12% | 79% | 72% | 10% | ||||||||
| Sales backlog at period end, $ million | $ | 219.5 | $ | 147.5 | 49% | $ | 219.5 | $ | 147.5 | 49% | ||||
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Rental equipment utilization is measured on a horsepower basis.
The year over year increase in the CPS segment’s fourth quarter revenue was due primarily to higher fabrication sales, increased equipment overhaul activity and the continued recovery in utilization of the compression rental fleet. Increased overhead absorption due to higher production levels combined with improved pricing on fabrication sales and higher rental fleet utilization contributed to a significant year over year improvement in fourth quarter EBITDA margin despite operating cost inflation and the absence of COVID-19 assistance in 2022. The fabrication sales backlog continued to grow during the fourth quarter of 2022, increasing by $72.0 million to $219.5 million compared to the $147.5 million backlog at December 31, 2021 and by $21.7 million, or 11%, from the $197.8 million backlog at September 30, 2022.
Well Servicing (“WS”)
| Three months ended December 31 |
Year ended December 31 |
|||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||
| Revenue | $ | 28,583 | $ | 25,676 | 11% | $ | 108,527 | $ | 92,876 | 17% | ||||
| EBITDA (1) | $ | 6,222 | $ | 6,651 | (6%) | $ | 23,395 | $ | 22,964 | 2% | ||||
| EBITDA (1) as a % of revenue | 22% | 26% | (15%) | 22% | 25% | (12%) | ||||||||
| Service hours(2) | 29,566 | 30,526 | (3%) | 117,306 | 111,585 | 5% | ||||||||
| Canada | 14,460 | 16,061 | (10%) | 57,123 | 56,562 | 1% | ||||||||
| United States | 5,374 | 3,559 | 51% | 19,157 | 13,765 | 39% | ||||||||
| Australia | 9,732 | 10,906 | (11%) | 41,026 | 41,259 | (1%) | ||||||||
| Revenue per service hour(2), dollars | $ | 967 | $ | 841 | 15% | $ | 925 | $ | 832 | 11% | ||||
| Canada | 960 | 774 | 24% | 918 | 708 | 30% | ||||||||
| United States | 955 | 709 | 35% | 899 | 696 | 29% | ||||||||
| Australia | 983 | 983 | – | 948 | 1,049 | (10%) | ||||||||
| Utilization(3) | 33% | 33% | – | 32% | 29% | 10% | ||||||||
| Canada | 28% | 31% | (10%) | 27% | 27% | – | ||||||||
| United States | 53% | 32% | 66% | 48% | 27% | 78% | ||||||||
| Australia | 37% | 41% | (10%) | 39% | 39% | – | ||||||||
| Rigs, average for period | 79 | 83 | (5%) | 79 | 83 | (5%) | ||||||||
| Canada | 56 | 57 | (2%) | 56 | 57 | (2%) | ||||||||
| United States | 11 | 12 | (8%) | 11 | 14 | (21%) | ||||||||
| Australia | 12 | 12 | – | 12 | 12 | – | ||||||||
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby.
(3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.
Fourth quarter WS segment revenue increased in 2022 as compared to 2021 due primarily to improved North American activity and pricing as well as the mix of equipment operating. Fourth quarter EBITDA was lower compared to 2021 due to lower Canadian activity as a result of extreme cold weather conditions and an extended holiday shutdown combined with weakness in Australia where field activity was limited due to prolonged wet weather conditions that resulted in a substantial year over year increase in lower rate paid stand-by. Improved year over year North American pricing was not sufficient to offset the absence of COVID-19 assistance, operating cost inflation and the negative impact of the year over year depreciation of the Australian dollar relative to the Canadian dollar on Australian results, which in turn resulted in lower segment EBITDA margins on a year over year basis.
Corporate
During the fourth quarter of 2022, Total Energy was focused on the safe and efficient operation of its business and the completion of its 2022 capital expenditure program. After funding capital expenditures, working capital requirements and lease and interest obligations, Total Energy generated $35.3 million of free cash flow during the quarter that was directed towards $28.6 million of debt reduction, $4.5 million of share repurchases under the Company’s normal course issuer bid and $2.5 million of dividends.
For the year ended December 31, 2022, after changes in non-cash working capital items and funding $56.7 million of capital expenditures, $7.4 million of interest payments and $5.0 million of lease payments, Total Energy generated $88.7 million of free cash flow that was directed towards $70.5 million of debt repayment, $12.6 million of share repurchases and $5.0 million of paid dividends.
Total Energy exited the fourth quarter of 2022 with $112.2 million of positive working capital, including $34.1 million of cash, and $150 million of available credit under its $225 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at December 31, 2022 was 4.94%.
Outlook
While global economic uncertainty and a relatively warm winter in the northern hemisphere have contributed to oil price volatility and lower natural gas prices, industry conditions remain positive and stable. Current indications are that industry activity levels will continue to modestly improve on a year over year basis, with the CPS segment’s significant year end fabrication backlog providing visibility into the second half of 2023. In this environment, Total Energy remains focused on the safe and efficient operation of its business and the disciplined deployment of capital.
Total Energy’s previously announced 2023 preliminary capital expenditure budget of $51.7 million includes $26.1 million for the recertification and maintenance of equipment and $25.6 million of expansion capital, including the substantial upgrade of idle equipment in the CDS and WS segments in direct response to customer demand. The Company intends to fund its 2023 capital expenditure program with cash on hand and cash flow.
Dividend Increase
When Total Energy completed the acquisition of Savanna Energy Services Inc. in June of 2017, it assumed $281.3 million of debt. Since that time, despite some very challenging industry conditions, to December 31, 2022 the Company has repaid $206.4 million, or 73%, of such debt. Subsequent to year end, an additional $5.0 million owing under the Company’s revolving credit facility was repaid such that $70.0 million is currently drawn on $225.0 million of available credit.
Given this significant reduction in debt and Total Energy’s commitment to providing its owners with industry leading returns, the Board of Directors has declared a dividend of $0.08 per common share for the quarter ended March 31, 2023, a 33% increase from the fourth quarter 2022 dividend. The dividend is payable on April 17, 2023 to shareholders of record at the close of business on March 31, 2023. The ex-dividend date is March 30, 2023. Unless otherwise indicated, all dividends declared by the Company are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Conference Call
At 9:00 a.m. (Mountain Time) on March 10, 2023 Total Energy will conduct a conference call and webcast to discuss its fourth quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (800) 319-4610 or (416) 915-3239. Those who are unable to listen to the call live may listen to a recording of it on Total Energy’s website. A recording of the conference call will also be available until April 10, 2023 by dialing (855) 669-9658 (passcode 9878).
Selected Financial Information
Selected financial information relating to the three months and year ended December 31, 2022 and 2021 is included in this news release. This information should be read in conjunction with the 2022 Consolidated Financial Statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2022 Annual report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
(audited)
| December 31 | December 31 | ||||||||
| 2022 | 2021 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 34,061 | $ | 33,365 | |||||
| Accounts receivable | 154,581 | 90,543 | |||||||
| Inventory | 91,614 | 89,921 | |||||||
| Prepaid expenses and deposits | 18,847 | 9,208 | |||||||
| Income taxes receivable | 496 | 2,208 | |||||||
| Current portion of finance lease asset | 378 | 487 | |||||||
| 299,977 | 225,732 | ||||||||
| Property, plant and equipment | 567,515 | 575,913 | |||||||
| Income taxes receivable | 7,070 | 7,070 | |||||||
| Deferred income tax asset | – | 393 | |||||||
| Lease asset | – | 361 | |||||||
| Goodwill | 4,053 | 4,053 | |||||||
| $ | 878,615 | $ | 813,522 | ||||||
| Liabilities & Shareholders’ Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and accrued liabilities | $ | 114,274 | $ | 65,513 | |||||
| Deferred revenue | 63,895 | 16,274 | |||||||
| Dividends payable | 2,490 | – | |||||||
| Current portion of lease liabilities | 5,173 | 4,030 | |||||||
| Current portion of long-term debt | 1,991 | 2,611 | |||||||
| 187,823 | 88,428 | ||||||||
| Long-term debt | 117,997 | 187,906 | |||||||
| Lease liabilities | 9,631 | 8,101 | |||||||
| Deferred income tax liability | 41,141 | 35,650 | |||||||
| Shareholders’ equity: | |||||||||
| Share capital | 261,109 | 270,905 | |||||||
| Contributed surplus | 3,590 | 5,757 | |||||||
| Accumulated other comprehensive loss | (17,032 | ) | (26,704 | ) | |||||
| Non-controlling interest | 552 | 561 | |||||||
| Retained earnings | 273,804 | 242,918 | |||||||
| 522,023 | 493,437 | ||||||||
| $ | 878,615 | $ | 813,522 | ||||||
Consolidated Statements of Comprehensive Income (Loss)
(in thousands of Canadian dollars except per share amounts)
| Three months ended December 31 |
Year ended December 31 |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | ||||||||||
| Revenue | $ | 211,479 | $ | 134,629 | $ | 759,813 | $ | 431,576 | |||||
| Cost of services | 162,291 | 103,657 | 589,809 | 323,092 | |||||||||
| Selling, general and administration | 11,082 | 8,372 | 39,671 | 28,234 | |||||||||
| Other expense (income) | 2,115 | 448 | 1,035 | (2,206) | |||||||||
| Share-based compensation | 351 | 228 | 1,142 | 804 | |||||||||
| Depreciation | 20,035 | 20,244 | 78,813 | 83,065 | |||||||||
| Operating income (loss) | 15,605 | 1,680 | 49,343 | (1,413) | |||||||||
| Gain on sale of property, plant and equipment | 232 | 643 | 3,164 | 4,363 | |||||||||
| Finance costs, net | (2,094) | (1,583) | (7,374) | (6,837) | |||||||||
| Net income (loss) before income taxes | 13,743 | 740 | 45,133 | (3,887) | |||||||||
| Current income tax expense (recovery) | 1,289 | (285) | 1,250 | (862) | |||||||||
| Deferred income tax expense (recovery) | 190 | (11) | 5,884 | (2,597) | |||||||||
| Total income tax expense (recovery) | 1,479 | (296) | 7,134 | (3,459) | |||||||||
| Net income (loss) for the period | $ | 12,264 | $ | 1,036 | $ | 37,999 | $ | (428) | |||||
| Net income (loss) attributable to: | |||||||||||||
| Shareholders of the Company | $ | 12,244 | $ | 1,049 | $ | 38,008 | $ | (360) | |||||
| Non-controlling interest | $ | 20 | $ | (13) | $ | (9 ) | $ | (68) | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic earnings per share | $ | 0.29 | $ | 0.02 | $ | 0.90 | $ | (0.01) | |||||
| Diluted earnings per share | $ | 0.29 | $ | 0.02 | $ | 0.88 | $ | (0.01) | |||||
Consolidated Statements of Comprehensive Income (Loss)
| Three months ended December 31 |
Year ended December 31 |
|||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | |||||||||
| Net income (loss) for the period | $ | 12,264 | $ | 1,036 | $ | 37,999 | $ | (428) | ||||
| Unrealized foreign currency translation | 965 | 33 | 9,672 | (7,968) | ||||||||
| Total other comprehensive income (loss) for the period | 965 | 33 | 9,672 | (7,968) | ||||||||
| Total comprehensive income (loss) | $ | 13,229 | $ | 1,069 | $ | 47,671 | $ | (8,396) | ||||
| Total comprehensive income (loss) attributable to: | ||||||||||||
| Shareholders of the Company | $ | 13,209 | $ | 1,082 | $ | 47,680 | $ | (8,328) | ||||
| Non-controlling interest | 20 | (13) | (9) | (68) | ||||||||
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
| Three months ended December 31 |
Year ended December 31 |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| (unaudited) | (unaudited) | (audited) | (audited) | ||||||||||
| Cash provided by (used in): | |||||||||||||
| Operations: | |||||||||||||
| Net income (loss) for the period | $ | 12,264 | $ | 1,036 | $ | 37,999 | $ | (428) | |||||
| Add (deduct) items not affecting cash: | |||||||||||||
| Depreciation | 20,035 | 20,244 | 78,813 | 83,065 | |||||||||
| Share-based compensation | 351 | 228 | 1,142 | 804 | |||||||||
| Gain on sale of property, plant and equipment | (232) | (643) | (3,164) | (4,363) | |||||||||
| Finance costs, net | 2,094 | 1,583 | 7,374 | 6,837 | |||||||||
| Unrealized loss (gain) on foreign currencies translation | 2,115 | 448 | 1,035 | (2,206) | |||||||||
| Current income tax expense (recovery) | 1,289 | (285) | 1,250 | (862) | |||||||||
| Deferred income tax expense (recovery) | 190 | (11) | 5,884 | (2,597) | |||||||||
| Income taxes (paid) recovered | 484 | (456) | 462 | (59) | |||||||||
| Cashflow | 38,590 | 22,144 | 130,795 | 80,191 | |||||||||
| Changes in non-cash working capital items: | |||||||||||||
| Accounts receivable | 9,564 | (346) | (64,103) | (17,637) | |||||||||
| Inventory | 1,777 | 9,409 | (1,690) | 5,107 | |||||||||
| Prepaid expenses and deposits | 466 | (462) | (9,639) | (2,332) | |||||||||
| Accounts payable and accrued liabilities | (4,543) | (1,638) | 40,417 | 14,337 | |||||||||
| Deferred revenue | 8,755 | (1,314) | 47,621 | 9,909 | |||||||||
| Cash provided by operating activities | 54,609 | 27,793 | 143,401 | 89,575 | |||||||||
| Investing: | |||||||||||||
| Purchase of property, plant and equipment | (14,713) | (11,753) | (56,735) | (28,983) | |||||||||
| Proceeds on disposal of property, plant and equipment | 332 | 1,351 | 6,292 | 10,507 | |||||||||
| Changes in non-cash working capital items | (1,373) | 3,881 | 8,181 | 4,223 | |||||||||
| Cash used in investing activities | (15,754) | (6,521) | (42,262) | (14,253) | |||||||||
| Financing: | |||||||||||||
| Repayment of long-term debt | (28,574) | (5,641) | (70,529) | (42,552) | |||||||||
| Repayment of lease liabilities | (1,359) | (1,093) | (4,966) | (5,803) | |||||||||
| Dividends to shareholders | (2,517) | – | (4,999) | – | |||||||||
| Repurchase of common shares | (4,491) | (5,258) | (12,638) | (10,000) | |||||||||
| Shares issued on exercise of share options | 42 | 42 | 158 | 42 | |||||||||
| Interest paid | (2,198) | (1,526) | (7,469) | (6,640) | |||||||||
| Cash used in financing activities | (39,097) | (13,476) | (100,443) | (64,953) | |||||||||
| Change in cash and cash equivalents | (242) | 7,796 | 696 | 10,369 | |||||||||
| Cash and cash equivalents, beginning of period | 34,303 | 25,569 | 33,365 | 22,996 | |||||||||
| Cash and cash equivalents, end of period | $ | 34,061 | $ | 33,365 | $ | 34,061 | $ | 33,365 | |||||
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labour required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labour required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.
As at and for the three months ended December 31, 2022 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate (1) | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | |||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 69,185 | $ | 20,043 | $ | 93,668 | $ | 28,583 | $ | – | $ | 211,479 | ||||||
| Cost of services | 49,225 | 12,152 | 79,703 | 21,211 | – | 162,291 | ||||||||||||
| Selling, general and administration | 2,007 | 1,912 | 3,208 | 1,153 | 2,802 | 11,082 | ||||||||||||
| Other income | – | – | – | – | 2,115 | 2,115 | ||||||||||||
| Share-based compensation | – | – | – | – | 351 | 351 | ||||||||||||
| Depreciation | 9,138 | 4,868 | 2,618 | 3,165 | 246 | 20,035 | ||||||||||||
| Operating income (loss) | 8,815 | 1,111 | 8,139 | 3,054 | (5,514) | 15,605 | ||||||||||||
| Gain (loss) on sale of property, plant and equipment | 23 | 192 | 14 | 3 | – | 232 | ||||||||||||
| Finance costs, net | (9) | (16) | (124) | (9) | (1,936) | (2,094) | ||||||||||||
| Net income (loss) before income taxes | 8,829 | 1,287 | 8,029 | 3,048 | (7,450) | 13,743 | ||||||||||||
| Goodwill | – | 2,514 | 1,539 | – | – | 4,053 | ||||||||||||
| Total assets | 346,870 | 182,095 | 260,019 | 83,628 | 6,003 | 878,615 | ||||||||||||
| Total liabilities | 62,545 | 20,292 | 122,320 | 6,003 | 145,432 | 356,592 | ||||||||||||
| Capital expenditures | 6,865 | 3,490 | 3,928 | 400 | 30 | 14,713 | ||||||||||||
| Canada | United States | Australia | Other | Total | ||||||
| Revenue | $ | 89,191 | $ | 97,228 | $ | 25,060 | $ | – | $ | 211,479 |
| Non-current assets (2) | 373,637 | 146,886 | 51,045 | – | 571,568 | |||||
As at and for the three months ended December 31, 2021 (unaudited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate (1) | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | |||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 48,766 | $ | 10,873 | $ | 49,314 | $ | 25,676 | $ | – | $ | 134,629 | ||||||
| Cost of services | 34,748 | 6,790 | 44,054 | 18,065 | – | 103,657 | ||||||||||||
| Selling, general and administration | 1,528 | 1,491 | 1,797 | 1,231 | 2,325 | 8,372 | ||||||||||||
| Other expense | – | – | – | – | 448 | 448 | ||||||||||||
| Share-based compensation | – | – | – | – | 228 | 228 | ||||||||||||
| Depreciation | 9,143 | 5,070 | 2,200 | 3,585 | 246 | 20,244 | ||||||||||||
| Operating income (loss) | 3,347 | (2,478) | 1,263 | 2,795 | (3,247) | 1,680 | ||||||||||||
| Gain (loss) on sale of property, plant and equipment | 210 | 120 | 50 | 271 | (8) | 643 | ||||||||||||
| Finance costs, net | (2) | (12) | (65) | (4) | (1,500) | (1,583) | ||||||||||||
| Net income (loss) before income taxes | 3,555 | (2,370) | 1,248 | 3,062 | (4,755) | 740 | ||||||||||||
| Goodwill | – | 2,514 | 1,539 | – | – | 4,053 | ||||||||||||
| Total assets | 325,143 | 180,188 | 206,278 | 93,274 | 8,639 | 813,522 | ||||||||||||
| Total liabilities | 60,691 | 10,316 | 45,721 | 4,058 | 199,299 | 320,085 | ||||||||||||
| Capital expenditures | 7,934 | 883 | 2,714 | 213 | 9 | 11,753 | ||||||||||||
| Canada | United States | Australia | Other | Total | ||||||
| Revenue | $ | 69,488 | $ | 37,610 | $ | 27,531 | $ | – | $ | 134,629 |
| Non-current assets (2) | 378,519 | 141,552 | 60,256 | – | 580,327 | |||||
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the year ended December 31, 2022 (audited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | (1) | ||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 252,663 | $ | 66,954 | $ | 331,669 | $ | 108,527 | $ | – | $ | 759,813 | ||||||
| Cost of services | 185,579 | 37,713 | 286,259 | 80,258 | – | 589,809 | ||||||||||||
| Selling, general and administration | 7,374 | 6,902 | 10,071 | 5,130 | 10,194 | 39,671 | ||||||||||||
| Other income | – | – | – | – | 1,035 | 1,035 | ||||||||||||
| Share-based compensation | – | – | – | – | 1,142 | 1,142 | ||||||||||||
| Depreciation | 35,785 | 19,518 | 9,725 | 12,832 | 953 | 78,813 | ||||||||||||
| Operating income (loss) | 23,925 | 2,821 | 25,614 | 10,307 | (13,324) | 49,343 | ||||||||||||
| Gain on sale of property, plant and equipment | 292 | 1,022 | 1,594 | 256 | – | 3,164 | ||||||||||||
| Finance costs, net | (23) | (75) | (412) | (26) | (6,838) | (7,374) | ||||||||||||
| Net income (loss) before income taxes | 24,194 | 3,768 | 26,796 | 10,537 | (20,162) | 45,133 | ||||||||||||
| Goodwill | – | 2,514 | 1,539 | – | – | 4,053 | ||||||||||||
| Total assets | 346,870 | 182,095 | 260,019 | 83,628 | 6,003 | 878,615 | ||||||||||||
| Total liabilities | 62,545 | 20,292 | 122,320 | 6,003 | 145,432 | 356,592 | ||||||||||||
| Capital expenditures | 34,835 | 8,508 | 9,490 | 3,792 | 110 | 56,735 | ||||||||||||
| Canada | United States | Australia | Other | Total | ||||||
| Revenue | $ | 371,478 | $ | 263,751 | $ | 124,584 | $ | – | $ | 759,813 |
| Non-current assets (2) | 373,637 | 146,886 | 51,045 | – | 571,568 | |||||
As at and for the year ended December 31, 2021 (audited, in thousands of Canadian dollars)
| Contract | Rentals and | Compression | Well | Corporate (1) | Total | |||||||||||||
| Drilling | Transportation | and Process | Servicing | |||||||||||||||
| Services | Services | Services | ||||||||||||||||
| Revenue | $ | 146,411 | $ | 36,974 | $ | 155,315 | $ | 92,876 | $ | – | $ | 431,576 | ||||||
| Cost of services | 107,107 | 20,779 | 129,685 | 65,521 | – | 323,092 | ||||||||||||
| Selling, general and administration | 4,729 | 5,506 | 6,550 | 4,701 | 6,748 | 28,234 | ||||||||||||
| Other income | – | – | – | – | (2,206) | (2,206) | ||||||||||||
| Share-based compensation | – | – | – | – | 804 | 804 | ||||||||||||
| Depreciation | 37,507 | 20,547 | 9,225 | 14,844 | 942 | 83,065 | ||||||||||||
| Operating income (loss) | (2,932) | (9,858) | 9,855 | 7,810 | (6,288) | (1,413) | ||||||||||||
| Gain on sale of property, plant and equipment | 493 | 1,951 | 1,533 | 310 | 76 | 4,363 | ||||||||||||
| Finance costs | (12) | (71) | (286) | (20) | (6,448) | (6,837) | ||||||||||||
| Net income (loss) before income taxes | (2,451) | (7,978) | 11,102 | 8,100 | (12,660) | (3,887) | ||||||||||||
| Goodwill | – | 2,514 | 1,539 | – | – | 4,053 | ||||||||||||
| Total assets | 325,143 | 180,188 | 206,278 | 93,274 | 8,639 | 813,522 | ||||||||||||
| Total liabilities | 60,691 | 10,316 | 45,721 | 4,058 | 199,299 | 320,085 | ||||||||||||
| Capital expenditures | 20,491 | 1,224 | 6,205 | 1,054 | 9 | 28,983 | ||||||||||||
| Canada | United States | Australia | Other | Total | ||||||
| Revenue | $ | 242,613 | $ | 105,305 | $ | 83,656 | $ | 2 | $ | 431,576 |
| Non-current assets (2) | 378,519 | 141,552 | 60,256 | – | 580,327 | |||||
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca
Notes to the Financial Highlights
| (1) | EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations. | |
| (2) | Working capital equals current assets minus current liabilities. | |
| (3) | Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity. | |
| (4) | Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 16 to the Company’s 2022 Consolidated Financial Statements. | |
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at www.sedar.com) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
