High Arctic Announces 2025 Second Quarter Results

Executive Summary

• High Arctic Energy Services Inc. released its unaudited financial results for the second quarter and first half of 2025, reporting a net loss from continuing operations of $295,000 for Q2 and $415,000 for YTD.
• The company highlighted significant improvements in profitability metrics, with Adjusted EBITDA from continuing operations rising to $482,000 in Q2 (up from $187,000 in Q2 2024) and $986,000 for YTD (up from $280,000 in YTD 2024), driven largely by a ~50% reduction in general and administrative expenses.
• Revenue from continuing operations decreased by 6% in Q2 ($2,391,000) and 14% YTD ($4,726,000) compared to the prior year, attributed to softening demand and customer deferrals of completions activity due to commodity price volatility and economic uncertainty.

Key Details

• Q2 2025 Financial Performance (Three Months Ended June 30, 2025):
  • Revenue from continuing operations: $2,391,000 (down 6% from $2,533,000 in Q2 2024).
  • Net loss from continuing operations: $(295,000) (vs. $(1,709,000) in Q2 2024).
  • Oilfield services operating margin: $1,126,000 (margin % improved to 49.1% from 45.5% in Q2 2024).
  • Adjusted EBITDA from continuing operations: $482,000 (20% of revenue; up from $187,000 in Q2 2024).
  • EBITDA from continuing operations: $333,000 (vs. $(1,465,000) in Q2 2024).
  • Operating loss from continuing operations: $(254,000) (vs. $(1,363,000) in Q2 2024).
  • Cash flow from operating activities: $(477,000) (vs. $(761,000) in Q2 2024).
  • Funds flow from operating activities: $310,000 (vs. $(293,000) in Q2 2024).
  • Capital expenditures: $411,000 (vs. $507,000 in Q2 2024).
  • Per share net loss: $(0.02) basic & diluted.
  • Per share Adjusted EBITDA: $0.04 basic & diluted.
• YTD 2025 Financial Performance (Six Months Ended June 30, 2025):
  • Revenue from continuing operations: $4,726,000 (down 14% from $5,521,000 in YTD 2024).
  • Net loss from continuing operations: $(415,000) (vs. $(1,527,000) in YTD 2024).
  • Oilfield services operating margin: $2,313,000 (margin % improved to 51.1% from 47.7% in YTD 2024).
  • Adjusted EBITDA from continuing operations: $986,000 (21% of revenue; up from $280,000 in YTD 2024).
  • EBITDA from continuing operations: $792,000 (vs. $(1,233,000) in YTD 2024).
  • Operating loss from continuing operations: $(382,000) (vs. $(2,433,000) in YTD 2024).
  • Cash flow from operating activities: $407,000 (vs. $(490,000) in YTD 2024).
  • Funds flow from operating activities: $805,000 (vs. $(96,000) in YTD 2024).
  • Capital expenditures: $793,000 (vs. $815,000 in YTD 2024).
  • Per share net loss: $(0.03) basic & diluted.
  • Per share Adjusted EBITDA: $0.08 basic & diluted.
• Equity Investment (Team Snubbing):
  • High Arctic holds a 42% equity share in Team Snubbing.
  • Team Snubbing’s net loss attributable to High Arctic was $348,000 in Q2 2025 (down from $889,000 in Q2 2024).
  • Team Snubbing’s net loss attributable to High Arctic was $336,000 for YTD 2025 (down from $399,000 in YTD 2024).
  • Team Snubbing reported total assets of $9.2 million as of June 30, 2025.
  • Team Snubbing generated revenue of $14.0 million in the first half of 2025, a 15% increase over the prior year.
• Balance Sheet Position (As of June 30, 2025):
  • Working capital: $3,380,000 (up from $2,692,000 at Dec 31, 2024).
  • Cash and cash equivalents: $2,428,000 (down from $3,123,000 at Dec 31, 2024).
  • Total assets: $28,755,000 (down from $30,867,000 at Dec 31, 2024).
  • Long-term debt (non-current): $3,090,000 (down from $3,178,000 at Dec 31, 2024).
  • Shareholders’ equity: $21,068,000 (down from $21,105,000 at Dec 31, 2024).
  • Shareholders’ equity per share: $1.66 (down from $1.70 at Dec 31, 2024).
  • Common shares outstanding: 12,696,959 (up from 12,448,166 at Dec 31, 2024).
• Operational Highlights:
  • Continued recordable incident-free work.
  • General and administrative expenses reduced by 52% in Q2 and 56% YTD compared to prior year periods.
  • Revenue negatively impacted by softening demand and deferral of completions activity due to cautious customer capital budgets.
  • Partially offset by larger high-pressure stimulation work from a new customer in Q2.

Notable Quotes

• Mike Maguire, Interim Chief Executive Officer: “High Arctic has maintained its solid start to 2025 with a second quarter performance consistent with the first quarter. We have now operated for twelve months following the spin-out of the PNG Business and demonstrated that the Corporation has the resilience and a solid base business that positions it well to benefit from anticipated increases in upstream energy service activity levels in the western Canadian oil and gas industry.”