PDS continues to offer high-spec rigs: Precision Drilling (PDS) scaled up its Super Triple rig fleet, leading to a 60% year-over-year rise in revenues from technological and environmental offerings. The Trans Mountain Expansion project (oil export) and the LNG Canada project (natural gas export) increased demand for high-spec rigs. It also plans to increase active rigs in the Middle East to eight in 2023. In Q2, the management is confident of delivering “High Performance, High Value service” to maximize free cash flow through margin expansion and scale up Alpha and EverGreen offerings. Read more about this in our previous article here.
Impressive year-over-year topline and operating income growth: PDS’s revenues increased by 59% in Q1. Its revenues in the Contract Drilling Services segment increased by 55%, while revenues in the Completion and Production Services segment nearly doubled. Adjusted EBITDA also improved remarkably in both segments. Higher operating rigs in the US and Canada with substantial increases in revenue per utilization day pipped the rise in operating cost per utilization day, leading to higher margins per day in both regions.
PDS’s cash flows and leverage: PDS’s cash flow from operations (or CFO) turned positive in Q1 2023 compared to a negative CFO year ago. Free cash flow remained negative but improved in Q1 2023, despite the increase in capex. The company’s debt-to-equity was 0.87x as of March 31.
Thanks for reading the PDS take three, designed to give you three critical takeaways from PDS’s earnings report. Soon we will present a second update on PDS earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
