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High Arctic Energy (TSE:HWO)
:HWO
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High Arctic Energy Services
(OTC:HWO)
66Neutral
High Arctic Energy Services (HWO) vs. S&P 500 (SPY)
Market Cap
C$10.83M
Dividend Yield24.72%
Average Volume (3M)5.32K
Price to Earnings (P/E)0.4
Beta (1Y)-0.09
Revenue Growth-28.63%
EPS GrowthN/A
CountryCA
Employees202
SectorEnergy
Sector Strength72
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)2.27
Shares Outstanding12,448,166
10 Day Avg. Volume5,834
30 Day Avg. Volume5,318
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.32
Price to Cash Flow (P/CF)1.00
P/FCF Ratio1.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
High Arctic Energy Services Business Overview & Revenue Model
Company DescriptionHigh Arctic Energy Services (HWO) is a Canadian-based company operating in the energy services sector, primarily focusing on providing specialized oilfield services to exploration and production companies. The company offers a range of services including drilling, well servicing, and specialized equipment rental, primarily targeting operations in Canada and Papua New Guinea. High Arctic Energy Services is known for its expertise in managing and maintaining high-pressure, high-temperature drilling environments, making it a preferred partner for challenging exploration projects.
How the Company Makes MoneyHigh Arctic Energy Services generates revenue through various streams associated with its core offerings. The company's primary revenue comes from providing drilling and well servicing solutions, which involve the deployment of rigs and personnel to assist in the extraction and maintenance of oil and gas wells. Additionally, High Arctic earns income from the rental of specialized equipment necessary for exploration and production activities. This can include everything from drilling rigs to ancillary support equipment. The company also benefits from long-term contracts and partnerships with major energy producers, which provide a stable and recurring revenue base. Another significant factor contributing to its earnings is its operations in Papua New Guinea, where it has established a strong market presence and continues to leverage its expertise in servicing high-demand, technically complex projects.
High Arctic Energy Services Financial Statement Overview
Summary
High Arctic Energy Services shows a strong financial recovery with significant profitability improvements. The income statement highlights a turnaround with net income positivity and improved margins. The balance sheet is solid with low leverage and high equity, and cash flow is robust, indicating efficient cash management. Past revenue declines are a concern, but overall, the financial outlook is positive.Income Statement
The income statement shows a significant improvement in profitability, with a TTM net income of $31.72 million compared to a previous annual loss. Gross profit margin improved to 28.3% in TTM from a negative margin in the past. Revenue growth remains a concern with a decline from previous years, but the strong recovery in margins is a positive sign.68
Positive
Balance Sheet
The balance sheet is strong with a high equity ratio of 70% in TTM, indicating low leverage. Debt-to-equity ratio is manageable at 0.21, and cash reserves are healthy. Return on equity improved significantly to 137.4% in TTM, showcasing high profitability relative to equity.75
Positive
Cash Flow
The cash flow statement reflects robust free cash flow growth, with a significant increase over the previous period. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net income. Free cash flow to net income ratio is also favorable, showing good cash flow management.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 41.16M | 61.93M | 80.02M | 76.44M | 90.80M | 185.50M |
| Gross Profit | |||||
| 11.64M | 11.31M | -5.78M | -8.42M | -14.20M | 6.90M |
| EBIT | |||||
| 3.12M | 1.35M | -16.57M | -19.47M | -27.80M | -8.30M |
| EBITDA | |||||
| 8.28M | -6.72M | -9.41M | 4.43M | 10.40M | 23.10M |
| Net Income Common Stockholders | |||||
| 31.72M | -13.14M | -36.58M | -18.61M | -25.90M | -8.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 32.10M | 50.33M | 19.56M | 12.04M | 32.60M | 9.30M |
| Total Assets | |||||
| 103.20M | 123.14M | 133.96M | 185.45M | 214.20M | 251.80M |
| Total Debt | |||||
| 78.60M | 6.35M | 5.70M | 16.52M | 19.20M | 10.70M |
| Net Debt | |||||
| 46.50M | -43.98M | -13.86M | 4.48M | -13.40M | 1.40M |
| Total Liabilities | |||||
| 105.20M | 23.80M | 18.73M | 36.60M | 36.90M | 46.20M |
| Stockholders Equity | |||||
| -2.00M | 99.33M | 115.23M | 148.85M | 177.30M | 205.60M |
| Cash Flow | Free Cash Flow | ||||
| 20.52M | 9.26M | 3.79M | -9.04M | 14.80M | 2.80M |
| Operating Cash Flow | |||||
| 22.09M | 11.22M | 7.86M | -1.80M | 19.70M | 12.70M |
| Investing Cash Flow | |||||
| -27.20M | 24.21M | 6.65M | -5.57M | -1.20M | -17.40M |
| Financing Cash Flow | |||||
| -37.97M | -3.93M | -6.74M | -13.39M | 5.10M | -16.30M |
High Arctic Energy Services Technical Analysis
Negative
0.97
Price Trends
1.10
Negative
1.12
Negative
1.59
Negative
Market Momentum
>-0.01
Positive
44.18
Neutral
48.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HWO, the sentiment is Negative. The current price of 0.97 is below the 20-day moving average (MA) of 1.07, below the 50-day MA of 1.10, and below the 200-day MA of 1.59, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.18 is Neutral, neither overbought nor oversold. The STOCH value of 48.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:HWO.
High Arctic Energy Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $857.09M | 8.30 | 21.89% | 4.09% | 0.84% | -1.74% | |
74 Outperform | C$381.27M | 6.44 | 11.04% | 3.69% | 2.65% | 52.69% | |
70 Outperform | C$1.54B | 8.32 | 26.23% | 1.96% | 8.79% | 31.76% | |
66 Neutral | C$10.83M | 0.38 | 2.07% | 24.72% | -28.63% | ― | |
66 Neutral | $930.44M | 8.81 | 6.90% | ― | -1.83% | -62.53% | |
58 Neutral | $9.12B | 5.24 | -7.59% | 7.51% | 0.53% | -65.25% | |
53 Neutral | C$394.05M | 14.37 | -1.55% | ― | -6.00% | -150.20% |
* Energy Sector Average
Performance Comparison
TSE:HWO
High Arctic Energy Services
0.97
-1.03
-51.52%
TSE:CEU
CES Energy Solutions
6.84
1.37
25.14%
TSE:PD
Precision Drilling
61.71
-40.02
-39.34%
TSE:TCW
Trican Well Service
4.55
0.38
9.14%
TSE:ESI
Ensign Energy Services
2.14
-0.55
-20.45%
TSE:TOT
Total Energy Services
9.69
-0.38
-3.77%
High Arctic Energy Services Earnings Call Summary
Earnings Call Date: Mar 31, 2025 | % Change Since: -17.09% | Next Earnings Date: May 9, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements in the reorganization and strong performance in Canadian operations. However, challenges in the PNG and Alaskan operations, along with delayed project timelines, balanced the positive aspects.Highlights
Successful Reorganization and Spin-Off
High Arctic has completed its reorganization, resulting in the spin-off of the PNG business into a new publicly listed entity named High Arctic Overseas Holdings Corporation (SpinCo).
Increased Revenues in Canadian Operations
Revenues from continuing operations increased approximately 3x for both the 3- and 6-month periods ended June 30, 2024, compared to the same periods in 2023, with Q2 2024 revenues at $2.5 million and a strong operating margin in the high 40% range.
Positive Cash Flow and Strong Financial Position
The Canadian business has positive working capital of approximately $5 million, including $4 million in cash, with only $3.4 million in mortgage debt.
Future Growth Optimism for PNG Operations
Despite current challenges, there is optimism for future drilling opportunities in PNG related to the Papua LNG project and other large-scale projects, which could significantly boost operations.
Lowlights
Decreased PNG Revenue and Activity
PNG revenue declined from $16.6 million in Q2 2023 to $10.4 million in Q2 2024, largely due to the cessation of drilling operations with Rig 103 and the associated decrease in rental revenue.
Challenges in Alaska Operations
The Alaskan operations faced challenges, including low activity due to extreme weather and client scheduling, leading to a net after-tax loss of $2.1 million for Team Snubbing International.
Delay in Papua LNG Project Investment Decision
The final investment decision for the Papua LNG project has been delayed to Q4 2025 or Q1 2026, impacting the timeline for potential operational growth in PNG.
Company Guidance
During the Q2 2024 earnings call for High Arctic Energy Services (HWO.TO), executives provided guidance on several key metrics and strategic initiatives. Michael Maguire, the CEO, confirmed the completion of a corporate reorganization, resulting in the creation of a new publicly listed entity, High Arctic Overseas Holdings Corporation (SpinCo), with both entities now trading separately on the TSX Venture Exchange and TSX Main Exchange, respectively. This reorganization resulted in 12,448,166 new common shares for both High Arctic and SpinCo. In terms of operations, Rig 103 completed its drilling program, and rental activities in Papua New Guinea (PNG) have softened. Financially, the Delta Rentals acquisition has tripled revenues from continuing operations to $2.5 million in Q2 2024 and $5.5 million for the first half of the year, with a strong operating margin consistently in the high 40% range. SpinCo commences with no long-term debt and approximately USD 19 million in working capital, indicating a robust financial position to facilitate future growth, potentially through M&A activities in the region.High Arctic Energy Services Corporate Events
High Arctic Energy Services Reports Strong Q3 Results
Nov 15, 2024
High Arctic Energy Services has successfully completed a strategic reorganization in the third quarter of 2024, returning $37.8 million to shareholders and increasing revenue significantly due to the acquisition of Delta Rental Services. The company is focusing on cost reduction and positioning itself for future growth, despite a decrease in net income from continuing operations compared to last year.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.