Image source: Shutterstock

Highlights

  • PHX’s revenue was CAD 154.2 million in Q2 2024, slightly down from CAD 155.6 million in pcp
  • Gross profit fell to CAD 27.7 million due to increased direct costs
  • The company raised dividends by 24% to CAD 9.5 million.

PHX Energy Services Corp (TSX: PHX) is a Canadian firm providing services to oil and natural gas exploration and development companies. It has a market capitalization of CAD 429.03mn.

In the second quarter of 2024, (Q2 2024), the company reported stable revenue of CAD 154.2 million, slightly down from CAD 155.6 million in the previous corresponding period (pcp). This stability was primarily attributed to a decrease in revenue from the motor rental and sale of motor equipment and parts segments. However, the company's gross profit fell to CAD 27.7 million due to increased direct costs, impacting overall profitability. Earnings before income taxes also declined to CAD 16.7 million from CAD 22.9 million in the pcp, reflecting reduced gross profit.

As a result of these factors, the company’s net earnings for Q2 2024 were CAD 12.9 million, down from CAD 18.1 million in the pcp. The decline in net earnings was driven by lower gross profit and reduced earnings before income taxes.

However, in Q2 2024, the company maintained stable revenue compared to the previous corresponding period and reduced loans and borrowings. It also reported increased cash flows from operating activities, highlighting its strength and adaptability.

Recent Business Update

According to a press release dated August 6, 2024, the company distributed CAD 9.5 million in dividends during the first three months of 2024, marking a 24% increase compared to the dividends paid in the same period of 2023.

Company Outlook

In the third quarter, the US rig count continued to decline, leading the company to adopt a more cautious outlook for its US division compared to earlier in the year.

Top 10 Shareholders

Approximately 29.05% of PHX Energy's total shares are owned by the top 10 shareholders. John Michael Hooks and GMT Capital Corp. are the largest stakeholders, holding around 10.16% and 9.67% of the company's shares, respectively.

Stock Information

The stock has experienced a decline of approximately 9.56% over the past month but has risen about 5.40% over the last three months. Additionally, it is currently trading above the average of its 52-week high of CAD 10.70 and 52-week low of CAD 7.00.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 15, 2024. The reference data in this report has been partly sourced from EODHD/Others.