Expro Group Holdings has posted a net income of $15 million in the second quarter (Q2), as compared to net loss of $3 million for the first quarter of 2024 and net income of $9 million for the second quarter of 2023. Net income margin was 3% for the second quarter of 2024, compared to (1)% for the first quarter of 2024.

 

Adjusted EBITDA of $95 million was up 40% sequentially and up 32% year-over-year. Adjusted EBITDA margin was 20%, compared to 18% for the first quarter of 2024.

 

The company boosted its full-year 2024 revenue guidance range to $1.70 to $1.75 billion, and refining full-year 2024 Adjusted EBITDA range to $350 to $375 million, supported by strong first half of the year performance, positive market outlook, and the successful early closing of the previously announced Coretrax acquisition.

 

Q2 revenue

For Q2, revenue was $470 million compared to a revenue of $383 million in the first quarter of 2024, an increase of $86 million, or 22%. Revenue sequentially increased across all operating segments, with the largest contributions from North and Latin America (NLA) and Europe and Sub-Saharan Africa (ESSA) segments. Second quarter operating results include $21 million of revenue attributable to Coretrax.

           

Adjusted EBITDA for the second quarter was $95 million, a sequential increase of $27 million, or 40%, primarily attributable to higher revenue, better activity mix across all operating segments and contributions from the Coretrax acquisition. Adjusted EBITDA margin for the second quarter of 2024 and the first quarter of 2024 was 20% and 18%, respectively.

           

Net cash used in operating activities for the second quarter of 2024 was $13 million, a decrease compared to net cash provided by operating activities of $30 million for the first quarter of 2024, primarily driven by an increase in net working capital, cash paid for merger and integration expense, and cash paid for severance and other expense compared to the prior quarter, partially offset by the increase in Adjusted EBITDA. Consistent with historical seasonal patterns, the increase in net working capital is expected to reverse in the second half of 2024, resulting in an improvement in net cash provided by operating activities.

 

Increased activity

Michael Jardon, Chief Executive Officer, noted: “We are pleased to report another quarter of strong financial performance, with revenue and Adjusted EBITDA exceeding guidance, including the impact of the early closing of the Coretrax acquisition. Our results reflect our commitment to deliver excellence and innovation across our operations, and positions us for sustained, through-cycle growth.

 

“Our strategic position in the international and offshore markets continues to anchor the business, with increased activity in mission critical, high value adding services. We continue to maintain a positive outlook based on the fundamental backdrop and increased global demand for services and solutions that support lower-cost, carbon-advantaged incremental production. We believe activity will continue to increase across geo-markets, with long-cycle development providing good business momentum, particularly for our drilling and completions-levered businesses. In the second quarter, we captured $196 million of contract wins and our backlog, while modestly down quarter-over-quarter, remains strong at approximately $2 billion.

 

A non-GAAP measure 

In the second quarter, Expro completed the previously announced acquisition of Coretrax, a technology leader in performance drilling tools and wellbore cleanup, well integrity, and production optimisation solutions. Coretrax has a complementary offering to Expro with little overlap and broadens the services and solutions the firm offers through its Well Construction and Well Intervention & Integrity product lines, adding significant value to its clients from innovative technologies that reduce risk and cost, improve drilling efficiency, extend the life of existing well stock, and optimise production.

 

Expro is continuing to leverage existing capabilities to grow its Sustainable Energy Solutions business. Expro’s team in Australia successfully executed well intervention services for recompletion of a CO2 injector well for a leading carbon capture, utilisation and storage (CCUS) research organisation. This is but one example of where it is advancing clean energy solutions.

 

Middle East and North Africa (Mena) 

In the Mena region, Expro commenced operations for a major well test contract onshore Middle East. The five-year contract requires the mobilisation of four trailer mounted conventional testing units and four trailer mounted multi-phase meters, along with 150 incremental personnel.

 

Revenue for the Mena segment was $81 million for the three months ended June 30, 2024, an increase of $10 million, or 14%, compared to $71 million for the three months ended March 31, 2024. The increase in revenue was driven by $10 million of Coretrax revenue, partially offset by a slight decline in revenue across other product lines. 

 

Segment EBITDA for the Mena segment was $29 million, or 35% of revenues, for the three months ended June 30, 2024, an increase of $4 million, or 17%, compared to $25 million, or 34% of revenues, for the three months ended March 31, 2024. The increase in Segment EBITDA and Segment EBITDA margin was primarily due to increased activity on higher-margin projects and more favorable activity mix during the three months ended June 30, 2024, including impacts of the Coretrax acquisition.--TradeArabia News Service