PDS - Precision Drilling Corporation (PDS) Q4 2023 Earnings Call Transcript

2024-02-06 18:37:09 ET

Precision Drilling Corporation (PDS)

Q4 2023 Earnings Conference Call

February 06, 2024 02:00 PM ET

Company Participants

Lavonne Zdunich - Director of Investor Relations

Carey Ford - Senior Vice President & Chief Financial Officer

Kevin Neveu - President & Chief Executive Officer

Conference Call Participants

Aaron MacNeil - TD Cowen

Kurt Hallead - Benchmark

Luke Lemoine - Piper Sandler

Waqar Syed - ATB Capital Markets

Keith MacKey - RBC Capital Markets

Presentation

Operator

Good day, and thank you for standing by. Welcome to the Precision Drilling Corporation 2023 Fourth Quarter and Year-End Results Conference Call. I would now like to hand the conference over to Lavonne Zdunich, Director of Investor Relations. Please go ahead.

Lavonne Zdunich

Thank you and welcome to Precision's Fourth Quarter Earnings Conference Call and Webcast. Participating on today's call with me will be Kevin Neveu, our President and CEO; and Carey Ford, our CFO. Earlier today we reported strong fourth quarter results which Carey will review with you, followed by an operational update and outlook commentary from Kevin. Once we have finished our prepared comments, we will open the call to questions.

Some of our comments today will refer to non-IFRS financial measures and will include forward-looking statements which are subject to a number of risks and uncertainties. Please see our news release and other regulatory filings for more information on financial measures, forward-looking statements and risk factors. As a reminder, we expressed our financial results in Canadian dollars unless otherwise indicated.

With that I'll pass it over to Carey.

Carey Ford

Thanks, Lavonne and good afternoon. Precision's annual financial results showed continued improvement from 2022 and reflect the focus on the 2023 strategic priorities that Kevin will address in his commentary. Annual highlights include revenue of CAD 1.9 billion a 20% annual increase, adjusted EBITDA of CAD 611 million a 96% increase, funds from operations of CAD 533 million and a 89% increase, cash from operations of CAD 501 million, a 111% increase, debt reduction of CAD 152 million and a CAD 30 million of share repurchases while funding two acquisitions with cash or assumption of debt totaling approximately CAD 100 million and positive earnings per share every quarter during 2023 and for the past six consecutive quarters.

In 2023, we closed the CWC acquisition on November 8 and the Precision team has aggressively worked with our new colleagues at CWC to integrate the business to begin realizing synergies including consolidating facilities, reducing administrative costs and utilizing Precision’s tech centers and supply stores to support the field. To date, we have achieved CAD 12 million of the projected CAD 20 million of annual synergies and expect to achieve most of the remainder in the first half of 2024.

Moving on to our fourth quarter results. Our fourth quarter adjusted EBITDA of CAD 151 million included a share-based compensation charge of CAD 13 million in transaction and severance charges of CAD 6 million. Asset lease charges, adjusted EBITDA would have been CAD 170 million....

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