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Mammoth Energy Services (TUSK) 1 Nov 24 2024 Q3 Earnings call transcript

AInvestFriday, Nov 1, 2024 7:48 pm ET
1min read

In Mammoth Energy Services' recent earnings call, the company provided insights into its financial performance and strategic plans for the future. Arty Straehla, the CEO, and Mark Layton, the executive, discussed the company's third-quarter results and outlined the company's outlook moving forward. Here are some key takeaways from the call.

Financial Performance

Mammoth Energy Services reported total revenue of $40 million for the third quarter of 2024, a decrease of 22% from the second quarter. The decline was primarily attributed to the underutilization of assets in natural gas basins, where the company operates. However, the company is optimistic about the future and expects demand for natural gas to increase in 2025.

The company's net loss for the third quarter was $23.4 million, and adjusted EBITDA was a negative $6.4 million. CapEx for the quarter was $1.9 million, down sequentially from the second quarter.

Investments and Strategic Initiatives

Mammoth Energy Services is planning to invest in its infrastructure business, focusing on T&D and engineering. The company intends to modernize its pressure pumping fleet by upgrading equipment and add scale to improve service offerings. The company also plans to invest in its sand division, expecting further improvements in the coming quarters.

The company's infrastructure service division has seen sustained demand due to weather-related events and storm-related work. Mammoth Energy Services plans to pursue opportunities within the sector, especially around T&D and fiber projects.

Debt and Capital Allocation

Following the receipt of settlement funds from Puerto Rican Electric Power Authority (PREPA), Mammoth Energy Services has terminated its term credit facility and is now debt-free. The company intends to use the remaining funds to invest back in its business and for general corporate purposes.

Outlook

Mammoth Energy Services expects relatively flat activity levels in the first half of 2025 but anticipates demand-driven improvements later in the year. The company is committed to efficient and effective cost management and strategic capital allocation to align with customer demand.

Strategic Opportunities

The company is open to potential strategic opportunities that would allow it to add accretive scale and high-quality assets while maintaining a strong balance sheet. This strategy is aimed at improving the company's positioning within the markets it operates in and creating value for stakeholders.

Conclusion

Mammoth Energy Services' earnings call highlighted the company's financial performance and strategic plans for the future. The company's focus on investing in its infrastructure business and modernizing its pressure pumping fleet positions it well for future growth. With a debt-free balance sheet and significant cash position, the company is well-positioned to capitalize on opportunities and improve shareholder value.

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