Precision Drilling reports Q4 EPS $10.42, consensus $1.61

Reports Q4 revenue $507M, consensus $362.36M. CEO Kevin Neveu, stated: “Precision continued to deliver strong results in Q4, generating revenue of $507M, Adjusted EBITDA of $151M and net earnings of $147M. This concluded one of our most profitable years in the past decade and allowed us to exceed our cash flow expectations. During the year, we not only met our debt reduction and shareholder capital return targets but also funded two accretive acquisitions…Precision’s Completion and Production Services segment generated $51M of Adjusted EBITDA during the year, representing a 34% increase over the prior year, driven by an 18% increase in activity from Precision well servicing…We successfully delivered on our three strategic priorities: generated significant free cash flow; strengthened our financial position by reducing our debt by $152M; and increased direct returns to shareholders by allocating 15% of our free cash flow to share repurchases. In 2024, we plan to increase our direct shareholder capital return program by allocating 25% to 35% of our free cash flow, before debt repayments, to share repurchases…in 2024, we plan to reduce debt by another $150M-$200M. This positions us to achieve our sustained Net Debt to Adjusted EBITDA ratio target of below 1.0 times by the end of 2025 and meet our long-term debt reduction target of $500 million between 2022 and 2025. As of December 31, 2023, we have repaid $258M of this $500M target…we plan to reduce debt another $100M by the end of 2026 and continue to move our direct shareholder capital returns towards 50% of free cash flow”.