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Highlights
- Debt Elimination and Financial Recovery: Mammoth has received $168.4 million from the Puerto Rico Electric Power Authority (PREPA) settlement, fully eliminating its debt and setting the stage for strategic investments.
- Revenue and Profitability Challenges: The company reported total revenue of $40 million, down from $65 million in Q3 2023, and a net loss of $24 million compared to a $1.1 million loss in the same quarter last year.
- Strategic Investments Planned: Mammoth plans to enhance its Infrastructure Services and Well Completion Services divisions, including expanding crews and upgrading equipment to capitalize on anticipated market improvements.
Mammoth Energy Services, Inc. (NASDAQ:TUSK) released its financial and operational results for the third quarter of 2024, highlighting ongoing challenges and strategic investment plans for the future. Despite a net loss and significant revenue declines, the company remains optimistic about a rebound in market conditions and future growth opportunities.
Detailed Report
Mammoth Energy Services faced a difficult third quarter, reporting a total revenue of $40 million, a sharp decrease from $65 million in the same quarter of 2023. The company recorded a net loss of $24 million, or $0.50 per diluted share, a substantial decline from the $1.1 million net loss, or $0.02 per diluted share, during the same period last year. Adjusted EBITDA also took a hit, coming in at negative $6.4 million compared to a positive $13.4 million in Q3 2023.
CEO Comments on Market Conditions and Strategy
Arty Straehla, CEO of Mammoth, expressed optimism despite the financial setbacks. "Softness across our Well Completion Services markets appeared to have bottomed in the third quarter, and we expect a rebound in the fourth quarter," Straehla noted. He emphasized the company’s strategic financial positioning, especially after resolving its debt situation. The $168.4 million settlement received from PREPA played a key role in achieving a debt-free status, empowering Mammoth to invest aggressively in future growth.
Division-Specific Performance
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Well Completion Services: Revenue for this division dropped significantly to $2.2 million, down from $20.3 million in Q3 2023. The decline was attributed to the absence of active pressure pumping fleets in Q3 2024 compared to an average utilization of 1.2 fleets last year. The revenue this quarter came primarily from a single active pump-down crew.
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Infrastructure Services: Revenue from infrastructure services saw a slight dip to $26 million from $26.7 million in the same quarter of 2023. The division maintained an average of 77 active crews, slightly fewer than the 81 crews in the previous year.
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Natural Sand Proppant Services: This division recorded $4.9 million in revenue, down from $10.6 million in Q3 2023. Sales volume dropped to 163,000 tons of sand at an average price of $22.89 per ton, compared to 352,000 tons sold at $30.18 per ton the previous year.
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Drilling Services: Revenue for drilling services decreased to $1.6 million from $2.3 million in Q3 2023, reflecting ongoing market difficulties.
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Other Services: The segment, which includes aviation, equipment rentals, and remote accommodations, reported revenue of $7 million, an improvement from $6 million in Q3 2023.
Investment and Growth Strategy
With debt no longer a burden, Mammoth plans to invest in expanding its infrastructure crews and upgrading pressure pumping equipment in its Well Completion Services division. The adoption of dual fuel Tier 4 technology is expected to improve operational efficiency and position the company to capitalize on rising demand as markets recover.
