Enerflex Ltd. Announces Fourth Quarter 2024 Financial and Operational Results

Financial Performance - Enerflex reported revenue of $561 million for Q4/24, a decrease from$574 million in Q4/23 and $601 million in Q3/24 [5] - Adjusted EBITDA for Q4/24 was$121 million, up from $91 million in Q4/23 and consistent with$120 million in Q3/24 [5][11] - Free cash flow for Q4/24 was $76 million, down from$139 million in Q4/23 but slightly up from $78 million in Q3/24 [5][11] Operational Highlights - The company has a strong contract backlog of$1.5 billion for Energy Infrastructure (EI) and $1.3 billion for Engineered Systems (ES), providing solid operational visibility [1][8] - The USA contract compression business generated revenue of$36 million with a gross margin of 78% in Q4/24, reflecting strong performance driven by increased natural gas production in the Permian basin [5][10] - Enerflex's total backlog as of December 31, 2024, was $1.3 billion, indicating strong future revenue generation potential [5][10] Balance Sheet and Liquidity - Enerflex reduced its bank-adjusted net debt-to-EBITDA ratio to 1.5x at year-end, down from 2.3x at the end of Q4/23 [10] - The company exited Q4/24 with net debt of$616 million, a reduction of $208 million compared to Q4/23 [10] - Enerflex maintains strong liquidity with access to$614 million under its credit facility [10] Dividend Declaration - The Board of Directors declared a quarterly dividend of CAD$0.0375 per share, payable on March 24, 2025, to shareholders of record on March 10, 2025 [22][20] Management Commentary - Management expressed confidence in the company's operational execution and ability to deliver sustainable returns, emphasizing the importance of disciplined capital allocation [8] - The company aims to enhance profitability, maximize free cash flow, and further reduce debt in 2025 [15][8] Industry Outlook - Enerflex anticipates steady demand across its business lines and geographic regions in 2025, supported by a highly contracted EI product line and recurring revenue from After-Market Services (AMS) [16][15] - The company expects its North American contract compression fleet to grow to over 475,000 horsepower by the end of 2025 [42]