CALGARY, Alberta, Nov. 04, 2021 (GLOBE NEWSWIRE) — Enerflex Ltd. (TSX:EFX) (“Enerflex” or “the Firm” or “we” or “our”), a number one provider of services to the worldwide vitality business, at the moment reported its monetary and working outcomes for the three and 9 months ended September 30, 2021.
Abstract Desk of Third Quarter and First 9 Months of 2021 Monetary and Working Outcomes
($ Canadian tens of millions, besides per share quantities, horsepower, and percentages)
|Three months ended
|9 months ended
|Adjusted EBITDA (2)||32.8||38.2||(5.4||)||98.6||138.4||(39.8||)|
|Earnings per share – primary||0.08||0.12||(0.04||)||0.16||0.62||(0.46||)|
|Recurring income progress (3)||14.1||%||(6.1||)%||2.7||%||(6.0||)%|
(1) Earnings Earlier than Curiosity (Finance Prices), Earnings Taxes, Depreciation, and Amortization (“EBITDA”) is taken into account a non-IFRS measure, which might not be comparable with comparable non-IFRS measures utilized by different entities.
(2) Adjusted EBITDA is a non-IFRS measure. Please seek advice from the complete reconciliation of these things within the Adjusted EBITDA part.
(3) Recurring income is comprised of income from the Service and Leases product strains, that are usually contracted and prolong into the long run. Whereas the contracts are topic to cancellation or have various lengths, the Firm doesn’t imagine these traits preclude them from being thought-about recurring in nature. Progress in recurring income is calculated over the comparative interval.
(4) Engineered Methods bookings and backlog are thought-about non-IFRS measures that don’t have standardized meanings as prescribed by IFRS and are subsequently unlikely to be similar to comparable measures utilized by different entities.
“Enerflex benefitted from a robust rebound in commodity costs and business exercise by recording our largest quarter for brand spanking new Engineered Methods orders since 2018. We proceed to see a construct in demand for each new Engineered Methods and After-Market Companies in all areas and our Leases section delivered excessive ranges of utilization within the USA and progress alternatives within the ROW area. Subsequent to the tip of the quarter, we had been awarded a number of new pure gasoline infrastructure tasks in our ROW area, essentially the most vital of which is a brand new 10-year, roughly $200 million challenge. All of those optimistic indicators give us the boldness to modestly enhance our dividend,” mentioned Marc Rossiter, Enerflex’s President and Chief Govt Officer.
“In the course of the quarter we superior our efforts to guide the de-carbonization of vitality by including electrical compression to our USA Rental fleet, receiving orders for non-fossil gas based mostly Engineered Methods, and finishing our first flare-to-power challenge in Latin America. This challenge was managed by workers within the ROW area utilizing Engineered Methods and After-Market Companies contributions from the USA and Canadian Areas. A worldwide success story for Enerflex, our consumer and the native financial system.”
“We’re cautiously optimistic that the present tendencies ought to proceed offered the basics underpinning the worldwide vitality advanced stay constructive. Nonetheless, the long run will not be with out challenges. The manufacturing enterprise is in its early levels of restoration in what stays a really aggressive surroundings that may stress margins within the near-term and rising provide chain constraints will affect the worth and availability of spare components wanted for our after-market providers and leases companies.”
“General, we imagine the downturn is getting behind us. Within the coming quarters, we’ll use our core competency of “Technical Excellence in Modularized Gear” to help the worldwide restoration. As promised.”
- Working earnings was decrease than the prior 12 months, primarily because of decreased contribution from sure massive, excessive margin Engineered Methods tasks that had been largely accomplished by the third quarter of 2020, aggressive margin pressures on lately booked Engineered Methods tasks, barely increased SG&A in comparison with the prior 12 months, in addition to adversarial international change impacts because of a weaker U.S. greenback. Engineered Methods revenues had been decrease in comparison with third quarter of 2020 because of those self same sure massive, excessive margin tasks that didn’t repeat within the present quarter.
- Bookings totaled $191 million, up from $23 million in the identical interval final 12 months and display an bettering backdrop for our Engineered Methods enterprise.
- SG&A within the third quarter was barely increased as a result of increased share-based compensation on the rise of the Firm’s share value in the course of the third quarter and better general compensation prices. These will increase had been partially offset by the dangerous debt provisions acknowledged in third quarter of 2020.
- The Firm invested $9 million in rental property; the bulk used to fund the natural enlargement of the USA contract compression fleet. Enerflex continues to train capital self-discipline and to prioritize capital spending associated to executed contracts with prospects. At September 30, 2021, the USA contract compression fleet totaled roughly 385,000 horsepower with a mean fleet utilization of 88 % for the quarter. The Firm has additionally invested $9 million in direction of development of a pure gasoline infrastructure asset, which can be accounted for as a finance lease.
- The Firm maintained stability sheet energy by managing working capital, decreasing debt, and persevering with to train capital self-discipline. We exited the quarter financially robust, with a bank-adjusted web debt to EBITDA ratio of 1.38:1, in comparison with a most ratio of three:1. This leverage ratio excludes the non-recourse debt. Enerflex has substantial undrawn credit score capability and money available.
- The Firm’s long-term debt is comprised of each recourse debt totaling $304 million, and non-recourse debt totaling $42 million.
- Subsequent to September 30, 2021, the Firm’s Board of Administrators permitted a rise to its quarterly dividend to $0.025 per share, payable on January 6, 2022, to shareholders of report on November 25, 2021. This new dividend quantity represents a 25 % enhance and reiterates the Firm’s dedication to responsibly return capital to shareholders. The rise in dividend is per Enerflex’s long-term technique of sustaining a robust stability sheet and delivering a sustainable dividend to shareholders. The Board will proceed to guage dividend funds on a quarterly foundation, based mostly on the provision of money circulation and anticipated market circumstances.
- Subsequent to September 30, 2021, the Firm was awarded a brand new 10-year $165 million USD pure gasoline infrastructure contract, which is able to add to our profitable fleet of property in our Center East operations.
The outlook for Exploration & Manufacturing (“E&P”) capital spending has been steadily bettering since mid-2020 when budgets had been reset in the course of the COVID-19 pandemic. Commodity costs have recovered, and E&P and Midstream stability sheets and free-cash-flow positions have been bettering. Oil and gasoline demand has been recovering, regardless of some continued results of the COVID-19 pandemic and evolving regulatory dangers related to the curtailment of hydrocarbons on the regional, nationwide, and worldwide ranges. Because of this, Enerflex expects buyer capex to extend as fundamentals enhance within the the rest of 2021 and 2022. This pattern will be seen in Enerflex’s bookings which have been trending upward because the second quarter of 2020. Though prospects proceed to indicate self-discipline in spending inside their money circulation and return cash to shareholders, we’re cautiously optimistic that this pattern ought to proceed given present fundamentals outlook.
As well as, an “Power Transition” in direction of much less carbon-intensive vitality sources is presenting new alternatives for the Firm in a number of areas, leveraging the energy of Enerflex in offering modularized engineer-to-order options for the vitality business. The Firm is working with present and new prospects to advance tasks that: 1) decarbonize core operations; 2) seize carbon; 3) construct infrastructure for renewable fuels; and 4) discover new hydrogen alternatives.
The Firm will proceed to protect the energy of its stability sheet and maximize money circulation by disciplined capital spending, with investments prioritizing higher-margin, less-cyclical companies with enticing returns. Enerflex’s Board of Administrators will proceed to guage dividend funds on a quarterly foundation, based mostly on the provision of money circulation and anticipated market circumstances.
Within the quick time period, Enerflex stays centered on offering a protected working surroundings for all workers, whereas positioning the Firm to capitalize on elevated business spending. We’re sustaining our deal with stability sheet energy in response to uncertainty brought on by the COVID-19 pandemic and up to date market volatility. Given the present surroundings, the Firm is rigorously assessing challenge spending, with a deal with making certain future tasks present most returns on invested capital. In the long term, the Firm continues to stability the anticipated impacts of broader market components, corresponding to volatility in realized commodity costs, political and financial uncertainty, and constant entry to market, towards the projected will increase in international demand for pure gasoline, significantly as an vitality transition gas to help decarbonization. Enerflex continues to evaluate the results of those contributing components and the corresponding affect on buyer exercise ranges, which is able to drive the demand for the Firm’s services in future intervals.
Third Quarter Segmented Outcomes
USA section income was $116 million, a lower of $11 million from the identical interval in 2020. Engineered Methods income decreased because of a sure massive, excessive margin challenge that didn’t repeat within the present quarter, whereas Service revenues improved as delayed gross sales and repair orders had been fulfilled. Leases income was increased than the comparative interval, with a bigger rental fleet and better utilization. SG&A was increased than the comparative interval, as a result of mark-to-market impacts on share-based compensation and better compensation as a result of impact of the short-term price financial savings measures that had been eliminated within the present quarter. The Firm continues to watch prices in response to current commodity value volatility and the uncertainty brought on by the COVID-19 pandemic and stays centered on controlling prices the place potential. The online affect to EBIT was a lower of $7 million, pushed by decrease gross margins on decreased revenues, aggressive margins on lately booked Engineered Methods tasks, and better SG&A versus the comparative interval as mentioned above.
Remainder of World
Income within the Remainder of World (“ROW”) section was $75 million, a lower of $4 million from the identical interval in 2020, with decrease Engineered Methods revenues, offset by increased Service and Leases revenues. A good portion of ROW’s outcomes are based mostly within the U.S. greenback, and as such the weakening U.S. greenback has had an unfavourable affect to the general outcomes. Engineered Methods income declined based mostly on the timing of latest bookings, which occurred within the first half of 2021 and haven’t resulted in income recognition but, whereas Service revenues elevated on increased exercise ranges in Argentina and Colombia. Leases income elevated within the interval regardless of the weaker U.S. greenback, which had a detrimental affect of roughly $2 million. In the course of the fourth quarter of 2020 and the primary quarter of 2021, the Firm commenced operations on new BOOM tasks, resulting in the beneficial variance over the prior interval. EBIT elevated by $3 million because of improved gross margin proportion on elevated contributions from sure excessive margin rental contracts, and decrease SG&A. SG&A prices had been decrease than the comparable interval in 2020 as a result of decreased dangerous debt provisions, partially offset with increased share-based compensation on mark-to-market motion and better compensation as a result of impact of the short-term price financial savings measures that had been eliminated within the present quarter.
The Canadian section recorded revenues of $41 million, a lower of $19 million, primarily because of decrease Engineered Methods income on a decrease opening backlog. Leases income decreased because of sure rental items being returned somewhat than renewed, whereas Service income elevated on increased components gross sales. SG&A elevated because of decrease price recoveries associated to authorities subsidies and share-based compensation bills on mark-to-market motion, partially offset by decreased dangerous debt provisions. EBIT decreased because of decreased income versus the comparative interval as mentioned above, aggressive margins on lately booked Engineered Methods tasks, and better SG&A.
The Firm’s outcomes embody objects which are distinctive and objects that administration and customers of the monetary statements modify for when evaluating the Firm’s outcomes. The presentation of Adjusted EBITDA shouldn’t be thought-about in isolation from EBIT or EBITDA as decided beneath IFRS. Adjusted EBITDA might not be similar to comparable measures offered by different corporations and shouldn’t be thought-about in isolation or as a alternative for measures ready as decided beneath IFRS.
The objects which have traditionally been adjusted for presentation functions relate typically to 4 classes: 1) impairment or good points on idle services (not together with rental asset impairments); 2) severance prices related to restructuring actions and price discount actions undertaken in response to the COVID-19 pandemic; 3) transaction prices associated to M&A exercise; and, 4) share-based compensation. Enerflex has offered the affect of share-based compensation as it’s an merchandise that may fluctuate considerably with share value adjustments throughout a interval based mostly on components that aren’t particular to the long-term efficiency of the Firm. The disposal of idle services is remoted inside Adjusted EBITDA as they don’t seem to be reflective of the continuing operations of the Firm and are idled because of restructuring actions.
The Firm added one other adjustment associated to authorities grants, most notably the Canada Emergency Wage Subsidy within the third quarter of 2020 and the Canada Emergency Lease Subsidy within the first quarter of 2021. The subsidies acquired have been recorded as a discount in price of products offered and promoting and administrative expense throughout the consolidated statements of earnings in accordance with the place the related expense was acknowledged. Enerflex considers this to be a singular merchandise as these short-term grants relate to the current COVID-19 pandemic and are usually not anticipated to be a part of the continuing monetary outcomes of the Firm.
Administration believes that identification of these things permits for a greater understanding of the underlying operations of the Firm based mostly on the present property and construction.
|($ Canadian tens of millions)|
|Three months ended September 30, 2021||Complete||USA||ROW||Canada|
|Authorities grants in COGS and SG&A||(3.9||)||(0.3||)||–||(3.6||)|
|Depreciation and amortization||22.0||10.8||9.3||1.9|
|($ Canadian tens of millions)|
|Three months ended September 30, 2020||Complete||USA||ROW||Canada|
|Severance prices in COGS and SG&A||0.7||0.2||–||0.5|
|Authorities grants in COGS and SG&A||(6.4||)||–||(1.4||)||(5.0||)|
|Depreciation and amortization||21.1||10.4||8.5||2.2|
Subsequent to September 30, 2021, the Firm’s Board of Administrators permitted a rise to its quarterly dividend to $0.025 per share, payable on January 6, 2022, to shareholders of report on November 25, 2021. This new dividend quantity represents a 25 % enhance and reiterates the Firm’s dedication to responsibly return capital to shareholders. The rise in dividend is per Enerflex’s long-term technique of sustaining a robust stability sheet and delivering a sustainable dividend to shareholders. The Board will proceed to guage dividend funds on a quarterly foundation, based mostly on the provision of money circulation and anticipated market circumstances.
Quarterly Outcomes Materials
This press launch ought to be learn at the side of Enerflex’s unaudited interim condensed consolidated monetary statements for the three and 9 months ended September 30, 2021 and 2020, and the accompanying Administration’s Dialogue and Evaluation, each of which can be found on the Enerflex web site at www.enerflex.com beneath the Buyers part and on SEDAR at www.sedar.com.
Convention Name and Webcast Particulars
Enerflex will host a convention name for analysts, buyers, members of the media, and different events on Friday, November 5, 2021 at 8:00 a.m. MDT to debate the third quarter 2021 monetary outcomes and working highlights. The decision can be hosted by Mr. Marc Rossiter, President and Chief Govt Officer; Mr. Sanjay Bishnoi, Senior Vice President and Chief Monetary Officer; and Mr. Stefan Ali, Vice President, Technique and Investor Relations.
When you want to take part on this convention name, please name 1.844.231.9067 or 1.703.639.1277. Please dial in 10 minutes previous to the beginning of the decision. No passcode is required. The reside audio webcast of the convention name can be obtainable on the Enerflex web site at www.enerflex.com beneath the Buyers part on November 5, 2021 at 8:00 a.m. MDT. A replay of the teleconference can be obtainable on November 5, 2021 at 11:00 a.m. MDT till November 12, 2021 at 11:00 a.m. MDT. Please name 1.855.859.2056 or 1.404.537.3406 and enter convention ID 8787319.
Enerflex is a single-source provider of pure gasoline compression, oil and gasoline processing, refrigeration programs, and electrical energy era gear – plus associated in-house engineering and mechanical providers experience. The Firm’s broad in-house sources present the aptitude to engineer, design, manufacture, assemble, fee, service, and function hydrocarbon dealing with programs. Enerflex’s experience encompasses discipline manufacturing services, compression and pure gasoline processing vegetation, gasoline raise compression, refrigeration programs, and electrical energy options serving the pure gasoline manufacturing business.
Headquartered in Calgary, Canada, Enerflex has roughly 2,000 workers worldwide. Enerflex, its subsidiaries, pursuits in associates, and joint operations function in Canada, the USA of America (“USA”), Argentina, Bolivia, Brazil, Colombia, Mexico, the UK (“UK”), Bahrain, Kuwait, Oman, the United Arab Emirates (“UAE”), Australia, New Zealand, Indonesia, Malaysia, and Thailand. Enerflex operates three enterprise segments: USA, Remainder of World, and Canada. Enerflex’s shares commerce on the Toronto Inventory Change beneath the image “EFX”. For extra details about Enerflex, go to www.enerflex.com.
Advisory Relating to Ahead-Trying Info
This press launch incorporates forward-looking info throughout the that means of relevant Canadian securities legal guidelines. All statements aside from statements of historic reality are forward-looking statements. The usage of any of the phrases “anticipate”, “plan”, “ponder”, “proceed”, “estimate”, “count on”, “intend”, “suggest”, “may”, “could”, “will”, “shall”, “challenge”, “ought to”, “might”, “would”, “imagine”, “predict”, “forecast”, “pursue”, “potential”, “goal” and “succesful” and comparable expressions are supposed to determine forward-looking info. Particularly, this press launch consists of (with out limitation) forward-looking info pertaining to: anticipated monetary efficiency; the Firm’s progress capital expenditure plans and upkeep capital spending; anticipated market circumstances and impacts on the Firm’s operations; improvement tendencies within the oil and gasoline business; enterprise prospects and technique; the flexibility to lift capital; the flexibility of present and anticipated money flows and different money sources to fund investments in working capital and capital property; the affect of financial circumstances on accounts receivable; expectations relating to future dividends; and implications of adjustments in authorities regulation, legal guidelines and earnings taxes. This forward-looking info relies on assumptions, estimates and evaluation made within the mild of the Firm’s expertise and its notion of tendencies, present circumstances and anticipated developments, in addition to different components which are believed by the Firm to be affordable and related within the circumstances. Ahead-looking info entails identified and unknown dangers and uncertainties and different components, that are tough to foretell, together with however not restricted to: the affect of financial circumstances together with volatility within the value of oil, gasoline, and gasoline liquids, rates of interest and international change charges; business circumstances together with provide and demand fundamentals for oil and gasoline, and the associated infrastructure together with new environmental, taxation and different legal guidelines and rules; disruptions to enterprise operations ensuing from the COVID-19 pandemic and the responses of presidency and the general public to the pandemic; adjustments in financial circumstances that limit Enerflex’s money circulation and affect its means to declare and pay dividends; the flexibility to proceed to construct and enhance on confirmed manufacturing capabilities and innovate into new product strains and markets; elevated competitors; inadequate funds to help capital investments required to develop the enterprise; the shortage of availability of certified personnel or administration; political unrest; and different components, lots of that are past the Firm’s management. For an augmented dialogue of the chance components and uncertainties that have an effect on or could have an effect on Enerflex, the reader is directed to the part entitled “Threat Elements” in Enerflex’s most lately filed Annual Info Kind, in addition to Enerflex’s different publicly filed disclosure paperwork, obtainable on www.sedar.com. Whereas the Firm believes that there’s a affordable foundation for the forward-looking info and statements included on this press launch, because of such identified and unknown dangers, uncertainties and different components, precise outcomes, efficiency, or achievements might differ materially from these expressed in, or implied by, these statements, and readers are cautioned to not unduly depend on forward-looking statements. The forward-looking info contained herein is expressly certified in its entirety by the above cautionary assertion. The forward-looking info included on this press launch is made as of the date hereof and, aside from as required by legislation, the Firm disclaims any intention or obligation to replace or revise any forward-looking info, whether or not because of new info, future occasions or in any other case.
For investor and media inquiries, please contact:
|Marc Rossiter||Sanjay Bishnoi||Stefan Ali|
|President & Chief Govt Officer||Senior Vice President & Chief Monetary Officer||Vice President, Technique & Investor Relations|
|Tel: 403.387.6325||Tel: 403.236.6857||Tel: 403.717.4953|