Calfrac Reports Fourth Quarter 2024 Results

4 days ago 2

Scroll Up

CALGARY, Alberta, March 13, 2025 (GLOBE NEWSWIRE) -- Calfrac Well Services Ltd. ("Calfrac” or "the Company”) (TSX: CFW) announces its financial and operating results for the three months and year ended December 31, 2024. The following press release should be read in conjunction with the management's discussion and analysis and annual consolidated financial statements and notes thereto as at December 31, 2024. Readers should also refer to the "Forward-looking statements” legal advisory and the section regarding "Non-GAAP Measures” at the end of this press release. All financial amounts and measures are expressed in Canadian dollars unless otherwise indicated. Additional information about Calfrac is available on the SEDAR+ website at www.sedarplus.ca, including the Company's Annual Information Form for the year ended December 31, 2024.

CEO'S MESSAGE

Calfrac achieved revenue of $381.2 million during the fourth quarter, an 11 percent decline from the third quarter, primarily due to a normal seasonal slowdown in activity. During 2024, Calfrac improved upon its year-over-year safety record as it finished the year with a Total Recordable Injury Frequency ("TRIF”) of 0.92, as compared to 1.05 in 2023. Calfrac's North American customer landscape continues to be impacted by consolidation and asset divestitures within the E&P industry. The Company expects to navigate these evolving market conditions through 2025 by prudently deploying capital and maximizing net income to generate sustainable returns for its shareholders.

Calfrac's Chief Executive Officer, Pat Powell commented: "I am happy with how the Calfrac team rebounded in 2024 after a very challenging first quarter in North America, and I am confident that we can successfully navigate the current headwinds while capitalizing on the growth opportunities in Argentina with the deployment of another large fracturing fleet in early 2025.”

SELECT FINANCIAL HIGHLIGHTS - CONTINUING OPERATIONS

 Three Months Ended Dec. 31, Years Ended Dec. 31,  
 2024 2023Change 20242023Change 
(C$000s, except per share amounts)($) ($)(%) ($)($)(%) 
(unaudited)      
Revenue381,230 421,402(10)1,567,4821,864,281(16)
Adjusted EBITDA(1)34,512 62,591(45)190,994325,456(41)
Consolidated cash flows provided by operating activities84,471 121,284(30)127,184281,634(55)
Capital expenditures32,955 49,397(33)170,289165,4143 
Net (loss) income(6,424)13,202NM 8,535197,569(96)
Per share - basic(0.07)0.16NM 0.102.43(96)
Per share - diluted(0.07)0.15NM 0.102.24(96)
As atDec. 31,Dec. 31,Change
 20242023 
(C$000s)($)($)(%)
(unaudited)   
Cash and cash equivalents44,04534,14029
Working capital, end of year(2)273,901236,39216
Total assets, end of period1,234,8401,126,19710
Long-term debt, end of period320,908250,77728
Net debt(1)(3)300,347241,06525
Total consolidated equity, end of period653,330615,9036

(1) Refer to "Non-GAAP Measures” on page 7 for further information.

(2) Working capital excludes the current portion of long-term debt of $150.0 million.

(3) Refer to note 14 of the consolidated annual financial statements for further information.

FOURTH QUARTER OVERVIEW

In the fourth quarter of 2024, the Company:

  • generated revenue of $381.2 million, a decrease of 10 percent from the comparative quarter in 2023 primarily due to lower activity and pricing in North America, offset partially by activity with its new offshore coiled tubing unit in Argentina;
  • reported Adjusted EBITDA of $34.5 million versus $62.6 million in the fourth quarter of 2023 primarily due to the lower revenue base in North America;
  • recorded a $12.7 million write-off of property, plant and equipment related to specifically identified U.S. fracturing assets;
  • revised its salvage value estimate for certain of its fracturing equipment components to align with current operational experience, which resulted in a one-time depreciation charge of $12.2 million related to fully depreciated components;
  • recorded an income tax recovery of $15.6 million, which was mainly related to the conversion of non-repayable intercompany debt into equity in Argentina and lower profitability in the United States;
  • reported a net loss of $6.4 million or $0.07 per share diluted compared to a net income of $13.2 million or $0.15 per share diluted in the comparable quarter in 2023;
  • reported period-end working capital of $273.9 million, which includes a cash balance of $44.0 million versus $236.4 million at December 31, 2023; and
  • incurred capital expenditures of $33.0 million which included approximately $21.0 million to grow the fracturing fleet in Argentina and continue its Tier IV fleet modernization program in North America.

FINANCIAL OVERVIEW - CONTINUING OPERATIONS

THREE MONTHS AND YEARS ENDED DECEMBER 31, 2024 VERSUS 2023

NORTH AMERICA

 Three Months Ended Dec. 31, Years Ended Dec. 31,  
 20242023Change 20242023Change 
(C$000s, except operational and exchange rate information)($)($)(%) ($)($)(%) 
(unaudited)      
Revenue289,883331,688(13)1,161,5881,522,348(24)
Adjusted EBITDA(1)23,12148,070(52)123,764282,863(56)
Adjusted EBITDA (%)(1)8.014.5(45)10.718.6(42)
Fracturing revenue per job ($)35,23838,678(9)35,48142,329(16)
Number of fracturing jobs7,9758,343(4)31,76634,815(9)
Active pumping horsepower, end of year (000s)1,0181,034(2)1,0181,034(2)
US$/C$ average exchange rate(2)1.39821.36223 1.36981.34971 

(1) Refer to "Non-GAAP Measures” on page 7 for further information.

(2) Source: Bank of Canada.

OUTLOOK

The Company's North American outlook for the upcoming year remains stable despite the current uncertainty surrounding the tariff regimes in Canada and the United States as well as the significant E&P industry consolidation that has occurred over the past few years. With the completion of the Coastal GasLink Pipeline, the new LNG Canada project that is expected to start exporting by the second half of 2025, and the expanded Trans Mountain Pipeline now in commercial service, the market fundamentals for completion services in Canada remains constructive. With these projects, Canada now has additional capacity to export natural gas and oil, which should have a positive impact on the cash flows within the energy industry. Calfrac continues to have a strong core customer base in Canada and expects that fracturing and coiled tubing activity in 2025 will increase slightly over the prior year despite the uncertain macro-economic backdrop. In particular, the Company imports certain products, such as sand and chemicals and component parts from the United States, to support its Canadian operations which could be impacted by the recently implemented tariffs. As a result, Calfrac is evaluating alternatives and the availability of applicable tariffs exemptions for products and parts that are imported from the United States.

As experienced over the last couple of years, activity in the Rockies region of the United States continues to be very challenging during the first quarter due to limited customer activity, resulting from the higher costs of operating in extreme cold weather. To address these seasonal challenges, the Company reduced its operating footprint to six active fracturing fleets to begin the first quarter. Financial results in the United States are expected to improve throughout the year as utilization is anticipated to increase from the first quarter. The outlook for natural gas prices has improved from recent years and consequently, the Company recommenced operations in the Appalachian basin in January with a project that is expected to continue into the third quarter. The Company is also exploring further opportunities to expand its operating scale in this region.

The Company made further progress on its equipment modernization program in North America and exited the quarter with 66 Tier IV Dynamic Gas Blending ("DGB”) pumps operating in the field, which was the equivalent of four Tier IV DGB fleets. By the end of the first quarter of 2025, Calfrac expects to operate the equivalent of five Tier IV DGB fleets in North America with the completion of its 2024 capital program. Inclusive of the Company's recent capital investments in next generation pumping technology, a significant portion of its North American crewed fleets were dual-fuel capable at the end of 2024.

THREE MONTHS ENDED DECEMBER 31, 2024 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2023

REVENUE

Revenue from Calfrac's North American operations decreased to $289.9 million during the fourth quarter of 2024 from $331.7 million in the comparable quarter of 2023. The Company's operations in North America had a strong start to the quarter, but witnessed a slow-down in activity as the quarter progressed due to a combination of customer budget exhaustion and a normal seasonal slowdown in December. The Company operated an average of 13 fleets during the fourth quarter in 2024 compared to 15 fleets in the comparable quarter of 2023 resulting in a 4 percent reduction in fracturing jobs completed. Pricing in the United states was lower relative to the comparable quarter in 2023, which contributed to the 13 percent reduction in revenue. Coiled tubing revenue was consistent with the fourth quarter in 2023 as slightly lower activity was offset by the completion of larger jobs.

ADJUSTED EBITDA

The Company's operations in North America generated Adjusted EBITDA of $23.1 million or 8 percent of revenue during the fourth quarter of 2024 compared to $48.1 million or 14 percent of revenue in the same period in 2023. This decrease was primarily due to the decline in fracturing fleet utilization and lower pricing in the United States.

YEAR ENDED DECEMBER 31, 2024 COMPARED TO YEAR ENDED DECEMBER 31, 2023

REVENUE

Revenue from Calfrac's North American operations decreased to $1.2 billion in 2024 from $1.5 billion in 2023. The 24 percent decrease in revenue was primarily due to lower activity in the United States, especially during the first quarter in the Rockies region, combined with lower pricing. In response to these market conditions, Calfrac idled two fracturing fleets in February and operated an average of 13 fleets in North America during 2024 as compared to 15 fleets in 2023. The third quarter of 2024 began slower than the prior year in North America, but gained momentum as the year progressed with the Company operating at near full utilization in September through to the end of November. After which, activity slowed due to a combination of customer budget exhaustion and a normal seasonal slowdown in December. In addition, activity for the Company's coiled tubing operations decreased by 29 percent from 2023 due to lower demand for its six crewed units.

ADJUSTED EBITDA

The Company's operations in North America generated Adjusted EBITDA of $123.8 million during 2024 compared to $282.9 million in 2023. This decrease in Adjusted EBITDA was largely driven by lower fracturing and coiled tubing utilization in 2024 as well as lower overall pricing levels in the United States. However, utilization was particularly strong for Calfrac's fracturing fleets operating in Canada during May and June, as the completion programs of its core clients significantly increased.

ARGENTINA

 Three Months Ended Dec. 31, Years Ended Dec. 31, 
 20242023Change 20242023Change 
(C$000s, except operational and exchange rate information)($)($)(%) ($)($)(%) 
(unaudited)      
Revenue91,34789,7142 405,894341,93319 
Adjusted EBITDA(1)15,63619,946(22)83,85863,56932 
Adjusted EBITDA (%)(1)17.122.2(23)20.718.611 
Fracturing revenue per job ($)101,62675,22535 87,30980,9898 
Number of fracturing jobs471697(32)2,5612,4813 
Active pumping horsepower, end of period (000s)137139(1)137139(1)
US$/C$ average exchange rate(2)1.39821.36223 1.36981.34971 

(1) Refer to "Non-GAAP Measures” on page 7 for further information.

(2) Source: Bank of Canada.

OUTLOOK

Argentina continued to demonstrate operational and financial strength by achieving revenue and Adjusted EBITDA growth from 2023 of 19 percent and 32 percent, respectively. During the past year, Calfrac invested approximately $30.0 million of capital expenditures to expand its fracturing fleet capacity in the Vaca Muerta shale play and began operating another large fracturing fleet during the first quarter of 2025. As a result, activity and financial performance during the first quarter of 2025 is expected to be very strong, building on the significant momentum generated in 2024.

THREE MONTHS ENDED DECEMBER 31, 2024 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2023

REVENUE

Calfrac's Argentinean operations generated revenue of $91.3 million during the fourth quarter of 2024 versus $89.7 million in the comparable quarter in 2023. Activity from the Company's new offshore coiled tubing unit contributed to the increased revenue during the fourth quarter. However, fracturing revenue and activity were hampered by unplanned downtime in the quarter due to customer well issues.  

ADJUSTED EBITDA

The Company's operations in Argentina generated Adjusted EBITDA of $15.6 million during the fourth quarter of 2024 compared to $19.9 million in the same quarter of 2023, while the Company's Adjusted EBITDA margins decreased to 17 percent from 22 percent. This decrease was primarily due to the unplanned downtime experienced during October.

YEAR ENDED DECEMBER 31, 2024 COMPARED TO YEAR ENDED DECEMBER 31, 2023

REVENUE

Calfrac's Argentinean operations generated revenue of $405.9 million during 2024 compared to $341.9 million in 2023 as the Company demonstrated strong activity growth across all service lines. The primary driver for the increase in revenue was higher fracturing activity in the Vaca Muerta shale play combined with the commencement of its offshore coiled tubing operations that began during the third quarter. Cementing revenue also increased due to the bundled nature of the Company's contracted services in the Vaca Muerta shale play.

ADJUSTED EBITDA

The Company's operations in Argentina generated Adjusted EBITDA of $83.9 million or 21 percent of revenue during 2024 versus $63.6 million or 19 percent of revenue in 2023 mainly due to a larger operating presence in the Vaca Muerta shale play during the third quarter and, to a lesser degree, the commencement of offshore coiled tubing operations during the third quarter.  

SUMMARY OF QUARTERLY RESULTS - CONTINUING OPERATIONS

Three Months EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31, Jun. 30,Sep. 30, Dec. 31, 
 20232023202320232024 20242024 2024 
(C$000s, except per share and operating data)($)($)($)($)($) ($)($) ($) 
(unaudited)        
Financial        
Revenue493,323466,463483,093421,402330,096 426,047430,109 381,230 
Adjusted EBITDA(1)83,79487,78591,28662,59126,057 65,38665,039 34,512 
Net income (loss)36,31350,53197,52313,202(2,903)24,549(6,687)(6,424)
Per share - basic0.450.621.200.16(0.03)0.29(0.08)(0.07)
Per share - diluted0.410.581.090.15(0.03)0.29(0.08)(0.07)
Capital expenditures34,47430,71850,82549,39748,072 66,75322,509 32,955 

(1) Refer to "Non-GAAP Measures” on page 7 for further information.

CAPITAL EXPENDITURES - CONTINUING OPERATIONS

 Three Months Ended Dec. 31, Years Ended Dec. 31, 
 20242023Change 20242023

This website uses cookies. By continuing to browse the website, you are agreeing to our use of cookies. Read More.

Read Entire Article