Dexterra Group Inc. Announces Results for Q2 2024
Rhea-AI Summary
Dexterra Group Inc. reported strong Q2 2024 results with consolidated revenue of $253.6 million, an 18.1% increase from Q2 2023. Adjusted EBITDA was $29.3 million, up from $25.2 million in Q2 2023. Net earnings from continuing operations were $12.2 million, with earnings per share of $0.19. The IFM and WAFES business units drove growth, with IFM revenue up 31% and WAFES revenue up 11.4% year-over-year. Free Cash Flow improved to $10.1 million year-to-date. The company declared a Q3 2024 dividend of $0.0875 per share. The sale of the Modular business is expected to close in August 2024.
Positive
- Consolidated revenue increased by 18.1% to $253.6 million in Q2 2024
- Adjusted EBITDA rose to $29.3 million, up from $25.2 million in Q2 2023
- Net earnings from continuing operations increased to $12.2 million from $8.9 million in Q2 2023
- IFM revenue grew by 31% year-over-year
- WAFES revenue increased by 11.4% compared to Q2 2023
- Free Cash Flow improved to $10.1 million year-to-date
Negative
- Net loss from discontinued operations (Modular Solutions) was $3.1 million in Q2 2024
- Total debt increased to $139.8 million at June 30, 2024, from $132.7 million in Q1 2024
- Year-to-date net earnings decreased to $5.5 million from $13.2 million in the same period of 2023
News Market Reaction 1 Alert
On the day this news was published, HZNOF declined NaN%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Toronto, Ontario--(Newsfile Corp. - August 6, 2024) - Dexterra Group Inc. (TSX: DXT)
Highlights
The IFM and WAFES business units generated strong results for Q2 2024 with consolidated revenue of
$253.6 million , an increase of18.1% compared to Q2 2023 and an increase of9.5% compared to Q1 2024. The increase in Q2 2024 was primarily driven by strong natural resource market activity levels in WAFES and the full quarter inclusion of the CMI Management LLC ("CMI") acquisition which closed at the end of February 2024;Q2 2024 Adjusted EBITDA, which excludes the impact of discontinued operations, was
$29.3 million compared to$25.2 million and$19.6 million for Q2 2023 and Q1 2024, respectively. The increase from the same period last year and last quarter was due primarily to improved IFM margins, strong workforce accommodations occupancy, and high camp equipment and access matting asset utilization.For the three months ended June 30, 2024, Free Cash Flow ("FCF") improved compared to the same quarter in 2023. FCF on a year to date basis in 2024 is in line with expectations at
$10.1 million and reflects the normal seasonal fluctuations from higher working capital requirements in the first half of the year. Adjusted EBITDA conversion to FCF is expected to approximate50% on an annualized basis;Consolidated net earnings was
$9.1 million and$5.5 million for the three and six months ended June 30, 2024, respectively, compared to net earnings of$8.5 million and$13.2 million for the three and six months ended June 30, 2023, respectively. For the three months ended June 30, 2024, net earnings from continuing operations were$12.2 million compared to$8.9 million for the Q2 2023. The lower net earnings year-to-date was due to the loss from discontinued operations. The sale of the Modular business is expected to close in August 2024.Earnings per share from continuing operations was
$0.19 in Q2 2024 and increased from$0.14 compared to the same quarter last year. Earnings per share from continuing operations for the six months ended June 30, 2024 and 2023 was$0.26 and$0.21 , respectively; andDexterra declared a dividend for Q3 2024 of
$0.08 75 per share for shareholders of record at September 30, 2024, to be paid on October 15, 2024.
This news release contains certain measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, and Free Cash Flow, that do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. See "Non-GAAP measures" and "Reconciliation of Non-GAAP measures" of the Corporation's MD&A for the three and six months ended June 30, 2024 for details which is incorporated by reference herein.
Second Quarter Financial Summary
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's except per share amounts) | 2024 | 2023(1) | 2024 | 2023(1) | ||||||||
| Revenue | $ | 253,624 | $ | 214,709 | $ | 485,519 | $ | 430,738 | ||||
| Adjusted EBITDA(2) | 29,276 | 25,239 | $ | 48,854 | 45,003 | |||||||
| Adjusted EBITDA as a percentage of revenue(2) | 11.8 % | |||||||||||
| Net earnings from continuing operations(3) | 12,162 | 8,935 | 16,597 | 13,618 | ||||||||
| Net loss from discontinued operations, net of income taxes | (3,082 | ) | (441 | ) | (11,085 | ) | (441 | ) | ||||
| Net earnings for the period | $ | 9,080 | $ | 8,494 | $ | 5,512 | 13,177 | |||||
| Earnings per share: | | |||||||||||
| Net earnings from continuing operations per share, basic and diluted | $ | 0.19 | $ | 0.14 | $ | 0.26 | $ | 0.21 | ||||
| Total net earnings per share, basic and diluted | $ | 0.14 | $ | 0.13 | $ | 0.08 | $ | 0.20 | ||||
| Total assets | $ | 647,025 | $ | 626,863 | $ | 647,025 | $ | 626,863 | ||||
| Total loans and borrowings | 139,770 | 126,524 | 139,770 | 126,524 | ||||||||
| Free Cash Flow(2) | $ | (585 | ) | $ | (4,638 | ) | $ | 10,057 | $ | (9,584 | ) | |
(1) The comparative numbers have been restated as the Modular segment is classified as held for sale for the three and six months ended June 30, 2024 and its operations are included in net loss from discontinued operations, net of income taxes.
(2) Please refer to the "Non-GAAP measures" section of the MD&A for the definition of Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue and Free Cash Flow and to the "Reconciliation of non-GAAP measures" section for the related calculations.
(3) Non-recurring charges included in pre-tax earnings are described in the reconciliation of Non-GAAP measures and include $nil and
Second Quarter Operational Analysis
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Revenue: | ||||||||||||
| IFM | $ | 100,297 | $ | 76,538 | $ | 201,856 | $ | 162,945 | ||||
| WAFES | 153,327 | 137,671 | 283,663 | 267,292 | ||||||||
| Corporate and Inter-segment eliminations | - | 500 | - | 500 | ||||||||
| Total Revenue | $ | 253,624 | $ | 214,709 | $ | 485,519 | $ | 430,737 | ||||
| Adjusted EBITDA: | ||||||||||||
| IFM | $ | 5,797 | $ | 4,539 | $ | 11,113 | $ | 9,772 | ||||
| WAFES | 29,154 | 25,034 | 49,130 | 43,489 | ||||||||
| Corporate costs and Inter-segment eliminations | (5,675 | ) | (4,334 | ) | (11,389 | ) | (8,258 | ) | ||||
| Total Adjusted EBITDA | $ | 29,276 | $ | 25,239 | $ | 48,854 | $ | 45,003 | | |||
Integrated Facilities Management ("IFM")
For Q2 2024, IFM revenues were
IFM Adjusted EBITDA for Q2 2024 was
Workforce Accommodations, Forestry and Energy Services ("WAFES")
Revenue from the WAFES business for Q2 2024 was
For the six months ended June 30, 2024, revenue was
Discontinued Operations (Modular Solutions)
Net loss from discontinued operations for Q2 2024 was
Liquidity and Capital Resources
Debt was
In conjunction with the Gitxaala Horizon North Services Limited Partnership (owned
Additional Information
A copy of Dexterra's Condensed Consolidated Interim Financial Statements ("Financial Statements") for the three and six months ended June 30, 2024 and 2023 and related Management's Discussion and Analysis ("MD&A") have been filed with the Canadian securities regulatory authorities and are available on SEDAR at sedarplus.ca and Dexterra's website at dexterra.com. The Financial Statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.
Conference Call
Dexterra will host a conference call and webcast to begin promptly at 8:30 Eastern time on August 7, 2024 to discuss the second quarter results.
To access the conference call by telephone the conference call dial in number is 1-844-763-8274.
A live webcast of the conference call will be accessible on Dexterra Group's website at dexterra.com/investor-presentations-events/ by selecting the Q2 2024 Results webcast link. An archived recording of the conference call will be available approximately one hour after the completion of the call until September 7, 2024 by dialing 1-855-669-9658, passcode 2204940#.
About Dexterra
Dexterra employs more than 9,000 people, delivering a range of support services for the creation, management, and operation of infrastructure across Canada and the USA.
Powered by people, Dexterra brings best-in-class regional expertise to every challenge and delivers innovative solutions, giving clients confidence in their day-to-day operations. Activities include a comprehensive range of facilities management services, industry-leading workforce accommodation solutions and other support services for diverse clients in the public and private sectors.
For further information contact:
Denise Achonu, CFO
Head office: Airway Centre, 5915 Airport Rd., 4th Floor
Mississauga, Ontario L4V 1T1
Telephone: (905) 270-1964
You can also visit our website at dexterra.com
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented throughout the News Release.
Adjusted EBITDA
| (000's) | Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net earnings | $ | 9,080 | $ | 8,494 | $ | 5,512 | $ | 13,177 | ||||
| Add: | ||||||||||||
| Share based compensation | 762 | 735 | 1,476 | 1,338 | ||||||||
| Depreciation & amortization | 8,601 | 8,617 | 16,703 | 16,567 | ||||||||
| Loss (gain) on disposal of property, plant and equipment | (17 | ) | 42 | 3 | 60 | |||||||
| Equity investment depreciation | 325 | 434 | 763 | 736 | ||||||||
| Finance costs | 3,528 | 3,323 | 7,358 | 6,559 | ||||||||
| Income tax expense | 3,915 | 2,410 | 5,593 | 3,629 | ||||||||
| Net Loss from discontinued operations, net of income taxes | 3,082 | 441 | 11,085 | 441 | ||||||||
| Non-recurring: | ||||||||||||
| Contract loss provisions(1) | - | - | - | 255 | ||||||||
| Restructuring and other costs(2) | - | 743 | 361 | 2,241 | ||||||||
| Adjusted EBITDA | $ | 29,276 | $ | 25,239 | $ | 48,854 | $ | 45,003 | ||||
(1) Contract loss provisions for the three and six months ended June 30, 2024 were $nil (three and six months ended June 30, 2023 were $nil and
(2) Restructuring and other costs for the six months ended June 30, 2024 include
Free Cash Flow
| (000's) | Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | | ||||||||
| Net cash flows from (used in) continuing operating activities | $ | 5,695 | $ | 1,543 | $ | 22,465 | $ | 1,567 | ||||
| Sustaining capital expenditures, net of proceeds | (1,367 | ) | (1,160 | ) | (2,031 | ) | (1,299 | ) | ||||
| Finance costs paid | (3,278 | ) | (3,058 | ) | (7,210 | ) | (5,491 | ) | ||||
| Lease payments | (1,635 | ) | (1,963 | ) | (3,167 | ) | (4,361 | ) | ||||
| Free Cash Flow | $ | (585 | ) | $ | (4,638 | ) | $ | 10,057 | $ | (9,584 | ) | |
Forward-Looking Information
Certain statements contained in this news release may constitute forward-looking information under applicable securities law. Forward-looking information may relate to Dexterra's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "continue"; "forecast"; "may"; "will"; "project"; "could"; "should"; "expect"; "plan"; "anticipate"; "believe"; "outlook"; "target"; "intend"; "estimate"; "predict"; "might"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding Dexterra's future operating results and economic performance, including return on equity and Adjusted EBITDA margins; reorganization of the the existing business; its capital light model management, market and inflationary environment expectations, lodge occupancy levels, its leverage, Discontinued Operations, expected closing of the sale of the Modular business, Free Cash Flow, wildfire activity expectations and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, market recovery, results of operations, performance and business prospects and opportunities regarding Dexterra, the satisfaction of conditions for the sale of the Modular business which Dexterra believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to Dexterra, they may prove to be incorrect. Forward-looking information is also subject to certain known and unknown risks, uncertainties and other factors that could cause Dexterra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward- looking information, including, but not limited to: the ability to retain clients, renew existing contracts and obtain new business; an outbreak of contagious disease that could disrupt its business; the highly competitive nature of the industries in which Dexterra operates; reliance on suppliers and subcontractors; cost inflation; volatility of industry conditions could impact demand for its services; a reduction in the availability of credit could reduce demand for Dexterra's products and services; Dexterra's significant shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its significant shareholder's
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219079
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