ProPetro Reports Q1 2020 Earnings

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ProPetro Reports Q1 2020 Earnings

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Propetro Holding Corp. (NYSE: PUMP) on 1st June 2020 has announced its first-quarter results of fiscal 2020 which ended on 31st March 2020. The COVID -19 pandemic has affected the business of the company, the Chief Executive Officer, Philip Gobe, has said that the business model of the company and its best operating team helped the company to achieve good financial results for the first ten weeks of Q1, but due to the unpredicted drop in crude oil prices in the 2nd week of March affected the business, as all activities in the U.S. basin declined, but the company has acted efficiently to reduce their cost and continued to provide safe service to their customers. The CEO of the company in the Quarterly report also mentioned that the company had to reduce its workforce due to market condition caused by the pandemic and has used some of its credit facilities available and will focus on the maintenance expenditures, capital expenditures and discretionary expense until the industry situation is back on track.

Earnings Highlights

  1. Revenue: The Revenue for the quarter ended on March 31, 2020, was  $395.1 million it has decreased by 27.66 % compared to $546.1 million in the quarter ended on March 3, 2019 (Y-o-Y), the company says this decrease was due to changes in its job mix and reduction in pricing of its services which was a result of the collapse in oil prices globally. The revenue has also decreased by 9.13% compared $434.7 million the Q4, 2019 (Q-o-Q).
  2. Gross Profit: The Gross Profit for Q1 2020 was $94.2 million which has reduced by 42.77% compared to $164.6 million in Q1 2019 (Y-o-Y) and it has reduced by 27.01% compared to $129.1 million in Q4 2019 (Q-o-Q).
  3. General & Administrative expenses: The General & Administrative expenses for Q1 2020 was $24.9 million which has increased by 34.61% compared to $18.5 million in Q1 2019 (Y-o-Y) and it has reduced by 19.82% compared to $31.1 million in Q4 2019 (Q-o-Q).The general and administrative expenses include non- recurring items and provision for credit losses.
  4. Operating Income (Loss): The operating income was negative ($7.42 million) for the Q1 2020 which is result of fall in oil prices globally, the operating income for Q1 2019 (Y-o-Y) was $93.7 million and $30.3 million for Q4 2019 (Q-o-Q).
  5. EBITDA: The Adjusted EBITDA for Q1 2020 was $74.9 million which has decreased compared to $110.3 million in Q4 2019 (Q-o-Q).
  6. Net Income (Loss) : The company has suffered a Net loss of ($7.80 million) in Q1 2020 compared to a Net income of $22.7 million in Q4 2019 (Q-o-Q). The company has said that the net income was negatively affected in Q1due to a $16.7 million of asset and goodwill impairment.
  7. Earnings Per Share (EPS): The Diluted EPS for Q1 2020 was $0.08 per share which has decreased compared to $0.22 per share in Q4 2019 (Q-o-Q) and $0.67 compared to Q1 2019 (Y-o-Y).

Balance sheet Highlights

The company in Q1 2020 has Cash & Cash Equivalents of  $143.71 million which have decreased compared to $149.3 million in Q4 2019 (Q-o-Q). The company has a total debt of $110 million in Q1 2020 which has reduced compared to $130 million in Q4 2019 (Q-o-Q). The Total liquidity in Q1 2020 as on March 31, 2020, is $194.1 million, which includes cash and a $50.4 million available to the company under its revolving credit facility. The Shareholder’s equity for Q1 2020 was $961.51 million which has reduced from $969.30 million in Q4 2019 (Q-o-Q).

The Company said as on May 29, 2020, the total cash available was $135.9 million and the total debt on the company was $70 million, the total liquidity was $159.7 million which includes cash and the revolving credit facility of $23.8 million available for use if needed. The company has also stated that it will efficiently manage its capital and liquidity needs.

The capital expenditure incurred by the company in Q1 2020 was $40.1 million which mainly included maintenance expenditures. The company aims to reduce its maintenance, capital expenditures and the field level consumable costs for the rest 2020 year. Based on its current activity, the company forecast for 2020 says its capital expenditures are expected to be below $85 million.

Final Outlook

                                                                                                                                                                                              (Source: https://seekingalpha.com/symbol/PUMP )

 

As the revenue of the company has suffered, the company’s stock has also suffered the effect of the crash in global oil prices due to the pandemic, the stock price had a sharp fall which touched its lowest 52-week price of $1.31 in the mid trading sessions of March and April during which it lost nearly its 50% market capitalization but it’s now recovering its market capitalization in the later trading session from May.

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