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Enerflex is an ethical and safety-oriented company guided by commitments to provide value to customers and shareholders, a safe and interesting work environment for its employees, and a positive impact on the communities in which it operates.
It has been well over three decades since our beginnings as a small shop supplying compression equipment in western Canada. But our customer focus and commitment to innovation, quality and safety has not changed.
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Enerflex’s people and projects are at work around the world, 24/7.
Extensive reciprocating and rotary screw experience. Wide horsepower range, with gas-fuelled and electric drives.
Thoroughly designed, well-built and efficiently delivered modules from our state-of-the-art facilities in Calgary, Alberta and Houston, Texas.
Electric-drive generators up to 50 Mw, for independent and alternative power producers and anywhere stand-alone generation is needed.
Enerflex offers complete global customer service. 24/7. Year-round.
Focus your capital outlays on drilling and completing wells by choosing from our broad lineup of rental packages.
We will help extend your equipment’s service life, upgrade system capacities or optimize the load on your compression horsepower.
We have the big-picture vision, talented people and industry-leading capabilities to fulfil requirements from design through long-term maintenance.
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Our extensive capabilities have been assembled and are being continually fine-tuned and strengthened specifically to meet our customer promise: being your single source supplier of innovative solutions.
Ongoing innovations serving the industry's focus on liquids extraction and LNG exports.
Enerflex's Houston manufacturing facility feeds global and domestic markets, with large-scale assembly capacity and comprehensive capabilities including high-capacity refrigeration, liquids fractionation and deep-cut processing.
Compression and processing rental equipment, after-market services, electric power opportunities and new equipment offerings serve a wide customer base.
Serving an array of customer requirements, from coal seam gas to LNG and high-pressure storage compression.
Our locally based design and engineering team serves this large region with specialized offshore and onshore compression, processing, refrigeration, rental equipment and FPSO topsides.
Integrated delivery of large turnkey facilities, including the 90 MMSCF per day processing facility with 6,000 barrels per day of condensate extraction for Oman Oil Company Exploration and Production.
Industry-leading capability and experience serving specialized needs across a culturally diverse and geographically broad region.
When you join Enerflex, you're on a team of exceptional people and you're in a place of opportunity to do exceptional things.
Enerflex people are problem-solvers, risk-takers and team players, passionate about translating skills into solutions that meet or exceed the needs and expectations of our customers.
Virtually everything we do involves collaboration. That is a key feature of our culture, and it strengthens the Company.
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August 08, 2019 05:22:55 pm
Enerflex Announces Second Quarter 2019 Financial Results and Quarterly Dividend
CALGARY, Alberta, Aug. 08, 2019 (GLOBE NEWSWIRE) -- Enerflex Ltd. (TSX:EFX) (“Enerflex” or “the Company” or “we” or “our”), a leading supplier of products and services to the global energy industry, today reported its financial and operating results for the three and six months ended June 30, 2019.
Summary Table of Second Quarter and First Half of 2019 Financial and Operating Results
“Enerflex’s focus entering 2019 was on execution excellence with respect to our Engineered Systems backlog and on growing recurring revenue lines of business through long-term service agreements and asset ownership opportunities. Our second quarter results demonstrate the success of this approach, as reflected in the highest revenue, gross margin, and EBIT in the Company’s history,” said Marc Rossiter, Enerflex's President and Chief Executive Officer. “Although industry participants were disciplined with capital spending in the first half of the year, customer inquiries remain strong. Additionally, we continue to benefit from the earnings stability derived from our asset ownership platform, which now consists of over 681,000 horsepower in an encouraging rental market. The long-term global outlook for natural gas remains positive. Enerflex is well positioned to take advantage of future opportunities through the successful execution of our Engineered Systems business and continued growth in our Service and Rental product lines.”
OutlookDemand for the Company’s products and services remains dependent on strength and stability in oil and natural gas prices. Our customers typically require strong, stable prices in order to generate the reliable free cash flow needed to fund expenditures that can be directed to the Company’s products and services. Enerflex’s financial performance continues to benefit from strategic decisions to diversify product offerings for Engineered Systems, to focus on increasing the recurring revenue streams derived from new and existing long-term build-own-operate-maintain (“BOOM”), rental, and service contracts, and to develop a geographically diversified business. The Company has experienced continued strength in after-market service and contract compression in key basins in the USA and has a solid pipeline of opportunities for growth in those businesses. Additionally, Enerflex has made significant progress on previously awarded BOOM projects in Latin America and MEA, with these projects expected to commence operations and begin generating revenue in the first half of 2020.
Shale oil and gas producers in North America have made a general shift to funding growth capital expenditures from free cash flow, rather than debt. Additionally, key basins within which the Company’s customers operate, namely the Permian and Montney, are experiencing temporary egress issues for gas and liquids. Enerflex expects the effects of these dynamics to ease at different speeds for the different basins, with material Permian egress relief expected by early 2020.
Strength in the backlog from 2018 provides visibility for Engineered Systems revenue through 2019 and early 2020. Any increases in capital spending by the natural gas industry in the second half of 2019 will result in more Engineered Systems opportunities. The Company expects quarterly bookings for the remainder of 2019 to trend closer to historical activity, and we continue to see interest for Rental and BOOM solutions in the USA and ROW segments. While the approval of certain liquefied natural gas (“LNG”) projects and improved sentiment surrounding the Canadian LNG industry has offered some future relief to the Canadian gas industry, management still expects activity in Canada to be largely subdued through 2019.
In the near term, Enerflex has a positive outlook supported by continued strength in our Engineered Systems backlog, solid execution on project work seen in recent quarters, and notable growth in the Service and Rental product lines. In the longer term, the Company continues to balance the expected impacts of broader market factors, such as volatility in realized commodity prices, political uncertainty, and consistent access to market, against the projected increases in global demand for natural gas. Enerflex continues to assess the effects of these contributing factors and the corresponding impact on our customers’ activity levels, which will drive the demand for the Company’s products and services in future periods. Second Quarter Segmented Results
USAUSA segment revenue was $327 million, an increase of $108 million from the same period in 2018. Engineered Systems revenue improved as a result of the continued progress made on certain large projects, while Service revenues increased on higher activity across the region and Rental revenues improved due to the organic growth of the contract compression fleet. An increase of $31 million in EBIT was driven by higher revenues across all product lines and improved gross margin performance on strong project execution, partially offset by higher compensation costs on a larger workforce and increased profit share on improved operational results.
Rest of WorldRevenue in the Rest of World segment decreased by $25 million, the result of lower Engineered Systems revenue, partially offset by higher Service revenue, primarily in Australia, and improved Rental revenue in Latin America. EBIT decreased by $8 million due to lower gross margin, which was negatively impacted by lower revenue and higher estimated costs to complete certain projects. SG&A costs were consistent with the comparative quarter.
CanadaCanadian revenue increased by $54 million on higher revenues for all product lines. Engineered Systems revenue improved due to continued progress on projects from opening Engineered Systems backlog, while Service and Rental revenues were higher due to increased parts and equipment sales. EBIT increased by $13 million as a result of improved gross margin on higher revenue and gross margin percentage on strong project execution, while SG&A costs were consistent with the comparable period in 2018. Aligning with our diversification strategy, the Company sold a distributed power generation solution to a customer outside the oil and gas industry, and was awarded a long-term service maintenance agreement for the project. In total, Enerflex secured over $10 million of long-term service agreements in the quarter.
Adjusted EBITDAThe Company’s results include items that are unique and items that management and users of the financial statements add back when evaluating the Company’s results. The presentation of Adjusted EBITDA should not be considered in isolation from EBIT or EBITDA as determined under IFRS. Adjusted EBITDA may not be comparable to similar measures presented by other companies and should not be considered in isolation or as a replacement for measures prepared as determined under IFRS.
The items that have been adjusted for presentation purposes relate generally to four categories: 1) impairment or gains on idle facilities; 2) restructuring activities; 3) transaction costs related to M&A activity; and, 4) share-based compensation. Identification of these items allows for an understanding of the underlying operations of the Company based on the current assets and structure. Enerflex has presented the impact of share-based compensation as it is an item that can fluctuate significantly with share price changes during a period based on factors that are not specific to the long-term performance of the Company. The disposal of idle facilities is isolated within Adjusted EBITDA as they are not reflective of the ongoing operations of the Company and are idled as a result of restructuring activities.
Effective January 1, 2019, the Company applied IFRS 16 Leases (“IFRS 16”) for the first time. The effect of the new standard is to increase EBIT by $0.7 million, as a portion of lease expenses are included as interest. In addition, depreciation and amortization increased by $3.2 million, resulting in a total increase in EBITDA of $3.9 million. The standard was adopted prospectively from January 1, 2019, and accordingly the 2018 results have not been affected. Refer to the Adjusted EBITDA section of the Management’s Discussion and Analysis for further detail on the new standard.
DividendSubsequent to the end of the quarter, Enerflex declared a quarterly dividend of $0.105 per share, payable on October 3, 2019, to shareholders of record on August 22, 2019.
Quarterly Results MaterialThis press release should be read in conjunction with Enerflex’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2019 and 2018, and the accompanying Management’s Discussion and Analysis, both of which will be available on the Enerflex website at www.enerflex.com under the Investors section and on SEDAR at www.sedar.com.
Conference Call and Webcast DetailsEnerflex will host a conference call for analysts, investors, members of the media, and other interested parties on Friday, August 9, 2019 at 8:00 a.m. MDT to discuss the second quarter 2019 financial results and operating highlights. The call will be hosted by Mr. Marc Rossiter, President and Chief Executive Officer and Mr. Ben Park, Interim Chief Financial Officer.
If you wish to participate in this conference call, please call 1.844.231.9067 or 1.703.639.1277. Please dial in 10 minutes prior to the start of the call. No passcode is required. The live audio webcast of the conference call will be available on the Enerflex website at www.enerflex.com under the Investors section on August 9, 2019 at 8:00 a.m. MDT. A replay of the teleconference will be available on August 9, 2019 at 11:00 a.m. MDT until August 16, 2019 at 11:00 a.m. MDT. Please call 1.855.859.2056 or 1.404.537.3406 and enter conference ID 3786679.
About Enerflex Enerflex Ltd. is a single source supplier of natural gas compression, oil and gas processing, refrigeration systems, and electric power generation equipment – plus related engineering and mechanical service expertise. The Company’s broad in-house resources provide the capability to engineer, design, manufacture, construct, commission, and service hydrocarbon handling systems. Enerflex’s expertise encompasses field production facilities, compression and natural gas processing plants, gas lift compression, refrigeration systems, and electric power equipment servicing the natural gas production industry.
Headquartered in Calgary, Canada, Enerflex has approximately 2,600 employees worldwide. Enerflex, its subsidiaries, interests in associates and joint-ventures operate in Canada, the United States, Argentina, Bolivia, Brazil, Colombia, Mexico, Australia, the United Kingdom, the United Arab Emirates, Oman, Bahrain, Kuwait, Indonesia, Malaysia, and Thailand. Enerflex’s shares trade on the Toronto Stock Exchange under the symbol “EFX”. For more information about Enerflex, go to www.enerflex.com.
Advisory Regarding Forward-Looking InformationThis press release contains forward-looking information within the meaning of applicable Canadian securities laws. These statements relate to management’s expectations about future events, results of operations and the Company’s future performance (both operational and financial) and business prospects. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”, “contemplate”, “continue”, “estimate”, “expect”, “intend”, “propose”, “might”, “may”, “will”, “shall”, “project”, “should”, “could”, “would”, “believe”, “predict”, “forecast”, “pursue”, “potential”, “objective” and “capable” and similar expressions are intended to identify forward-looking information. In particular, this press release includes (without limitation) forward-looking information pertaining to: the anticipated duration of weak natural gas prices and the effect thereof in Canada and USA markets; anticipated revenue; expected bookings; and the nature and scope of challenges and opportunities in the Rest of World segment. In developing the forward-looking information in this news release, the Company has made certain assumptions with respect to general economic and industry growth rates, commodity prices, currency exchange and interest rates, competitive intensity and regulatory approvals. Forward-looking information involves known and unknown risks and uncertainties and other factors, which are difficult to predict and may affect the Company’s operations, including, among other things: the impact of general economic conditions; industry conditions, including the adoption of new environmental, taxation and other laws and regulations and changes in how they are interpreted and enforced; volatility of oil and gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations, including future dividends to shareholders of the Company; increased competition; the lack of availability of qualified personnel or management; labour unrest; political unrest; fluctuations in foreign exchange or interest rates; stock market volatility; opportunities available to, or pursued by, the Company; obtaining financing; and other factors, many of which are beyond its control. The foregoing list of factors and risks is not exhaustive. For an augmented discussion of the risk factors and uncertainties that affect or may affect Enerflex, the reader is directed to the section entitled “Risk Factors” in Enerflex’s most recently filed Annual Information Form, as well as Enerflex’s other publicly filed disclosure documents, available on www.sedar.com. While the Company believes that there is a reasonable basis for the forward-looking information and statements included in this press release, as a result of such known and unknown risks, uncertainties and other factors, actual results, performance, or achievements could differ materially from those expressed in, or implied by, these statements. The forward-looking information included in this press release should not be unduly relied upon. The forward-looking information contained herein is expressly qualified in its entirety by the above cautionary statement. The forward-looking information included in this press release is made as of the date hereof and, other than as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For investor and media inquiries, please contact:
Oil and Gas Solutions
Suite 904, 1331 Macleod Trail SE
Calgary, AB, T2G 0K3, Canada
Main Phone: +1.403.387.6377