Q2 2025 Source Energy Services Ltd Earnings Call Transcript
Key Points
- Source Energy Services Ltd (SCEYF) achieved record sales volumes of 1.1 million metric tonnes in Q2 2025, surpassing the previous record set in Q1 2025.
- The company reported a significant increase in sand revenue, reaching $161.5 million, contributing to a total revenue of $201.9 million, a $25.5 million increase from the same period last year.
- Adjusted EBITDA improved by $4.4 million from the second quarter of 2024, reaching $35.2 million.
- The expansion of the Peace River facility and the development of the Taylor terminal are on track, enhancing the company's production and logistics capabilities.
- The Canadian government issued a remission order reversing tariffs on frac sand imported from the US, benefiting Source Energy Services Ltd (SCEYF) and its customers.
- The company anticipates a slight slowdown in completion activity in the Western Canadian Sedimentary Basin for the second half of the year, with potential impacts from budget exhaustion in Q4.
- A weaker Canadian dollar negatively impacted adjusted gross margin by $0.31 per metric ton for the quarter.
- Operating and G&A expenses increased by $1 million compared to Q2 2024, driven by higher people costs and increased selling and administrative expenses.
- Higher terminal costs were incurred due to the commencement of operations at Taylor and expanded operations at Chetwynd.
- The company is now cash taxable in the US and expects to be cash taxable in Canada next year, potentially impacting future cash flows.
Thank you for standing by. This is the conference operator. Welcome to the Source Energy Services second-quarter 2025 results conference call. (Operator Instructions) The conference is being recorded. (Operator Instructions)
I would now like to turn the conference over to Scott Melbourn, CEO.
Mr. Melbourn, please proceed.
Thank you, operator. Good morning, and welcome to Source Energy Services Second Quarter 2025 Conference Call. My name is Scott Melbourn. I'm the CEO of Source. I'm joined today by Derren Newell, our CFO.
This morning, we will provide a brief overview of the quarter, which will be immediately followed by a question-and-answer period.
Before I get started, I would like to refer everyone to the financial statements and the MD&A that were posted to SEDAR and the company's website last night and remind you of the advisory on forward-looking information found in our MD&A and press release. On this call, Source's
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