Constellation Software Inc. and Topicus.Com Inc. Announce Results for Topicus.com Inc. for the Second Quarter Ended June 30, 2025
Topicus.com
Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for
Topicus.com
Inc. ('Topicus' or the 'Company') for the second quarter ended June 30, 2025. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.
The following press release should be read in conjunction with the Company's Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2025 and the accompanying notes, our Management's Discussion and Analysis for the three and six months ended June 30, 2025 and the Annual Consolidated Financial Statements of
Topicus.com
Inc. for the year ended December 31, 2024, which we prepared in accordance with International Financial Reporting Standards ('IFRS') and the Company's annual Management's Discussion and Analysis for the year ended December 31, 2024, which can be found on SEDAR+ at
www.sedarplus.com
and on
Topicus.com
Inc.'s website
www.topicus.com
. Additional information about
Topicus.com
Inc. is also available on SEDAR+ at
www.sedarplus.com
.
Q2 2025 Headlines:
Total revenue for the quarter ended June 30, 2025 was €372.0 million, an increase of 20%, or €60.8 million, compared to €311.2 million for the comparable period in 2024. For the first six months of 2025 total revenues were €727.6 million, an increase of 18%, or €109.9 million, compared to €617.8 million for the comparable period in 2024. The increase for both the three and six-month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 5% and 4% respectively.
Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.
Net income for the quarter ended June 30, 2025 increased €14.5 million to €41.5 million compared to €26.9 million for the same period in 2024. On a per share basis, this translated into net income per basic and diluted share of €0.31 in the quarter ended June 30, 2025 compared to €0.21 for the same period in 2024. For the six months ended June 30, 2025 net income increased €56.4 million to €111.6 million compared to €55.2 million for the same period in 2024. On a per share basis, this translated into net income per basic and diluted share of €0.85 in the six months ended June 30, 2025 compared to €0.43 for the same period in 2024.
For the quarter ended June 30, 2025, CFO were negative €14.9 million compared to €8.8 million for the same period in 2024. Many of the businesses invoice customers for annual software maintenance fees in Q1 each year resulting in a disproportionate amount of cash being received in the first quarter as compared to the remaining three quarters. For the six months ended June 30, 2025, CFO increased €20.2 million to €256.5 million compared to €236.3 million for the same period in 2024 representing an increase of 9%.
For the quarter ended June 30, 2025, FCFA2S was negative €16.7 million compared to negative €3.8 million for the same period in 2024. For the six months ended June 30, 2025, FCFA2S increased €14.9 million to €145.0 million compared to €130.1 million for the same period in 2024 representing an increase of 11%.
Forward Looking Statements
Certain statements herein may be 'forward looking' statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Topicus or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Topicus assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.
Non-IFRS Measures
Free cash flow available to shareholders ''FCFA2S'' refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus' objective is to invest all of our FCFA2S in acquisitions which meet Topicus' hurdle rate.
FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.
The following table reconciles FCFA2S to net cash flows from operating activities:
About
Topicus.com
Inc.
Topicus' subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol 'TOI'. Topicus acquires, manages and builds vertical market software businesses.
About Constellation Software Inc.
Constellation's common shares are listed on the Toronto Stock Exchange under the symbol 'CSU'. Constellation acquires, manages and builds vertical market software businesses.
For further information:
Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@topicus.com
www.topicus.com
SOURCE:
TOPICUS.COM
INC.
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STEP Energy Services Ltd. Reports Second Quarter 2025 Results
CALGARY, Alberta--(BUSINESS WIRE)--STEP Energy Services Ltd. (the 'Company' or 'STEP') (TSX: STEP) is pleased to announce its financial and operating results for the three and six months ended June 30, 2025. The following Press Release should be read in conjunction with the management's discussion and analysis ('MD&A') and the unaudited condensed consolidated financial statements and notes thereto as at June 30, 2025 (the 'Financial Statements'). Readers should also refer to the 'Forward-looking information & statements' legal advisory and the section regarding 'Non-IFRS Measures and Ratios' at the end of this Press Release. All financial amounts and measures are expressed in Canadian dollars unless otherwise indicated. Additional information about STEP is available on the SEDAR+ website at including the Company's Annual Information Form for the year ended December 31, 2024 dated March 11, 2025 (the 'AIF'). CONSOLIDATED HIGHLIGHTS FINANCIAL REVIEW ($000s except percentages and per share amounts) Three months ended Six months ended June 30, June 30, June 30, June 30, 2025 2024 2025 2024 Consolidated revenue $ 228,003 $ 231,375 $ 535,744 $ 551,521 Net income $ 5,853 $ 10,469 $ 30,004 $ 51,826 Per share-basic $ 0.08 $ 0.15 $ 0.42 $ 0.72 Per share-diluted $ 0.08 $ 0.14 $ 0.41 $ 0.70 Adjusted EBITDA (1) $ 34,769 $ 41,692 $ 93,729 $ 112,827 Adjusted EBITDA % (1) 15% 18% 17% 20% Free Cash Flow (1) $ 17,327 $ 20,460 $ 49,499 $ 73,943 Per share-basic (1) $ 0.24 $ 0.29 $ 0.69 $ 1.03 Per share-diluted (1) $ 0.24 $ 0.28 $ 0.67 $ 1.00 (1) Adjusted EBITDA, Free Cash Flow, Free Cash Flow per share-basic and Free Cash Flow per share-diluted are non-IFRS financial measures, Adjusted EBITDA % is a non-IFRS financial ratio. These metrics are not defined and have no standardized meaning under IFRS. See Non-IFRS Measures and Ratios. Expand ($000s except shares) June 30, December 31 2025 2024 Cash and cash equivalents $ 3,230 $ 4,362 Working capital (including cash and cash equivalents) (2) $ 76,992 $ 35,355 Total assets $ 613,516 $ 580,635 Total long-term financial liabilities (2) $ 69,713 $ 83,394 Net Debt (2) $ 43,912 $ 52,668 Shares outstanding 72,873,113 72,037,391 (2) Working Capital, Total long-term financial liabilities and Net Debt are non-IFRS financial measures. They are not defined and have no standardized meaning under IFRS. See Non-IFRS Measures and Ratios. Expand OPERATIONAL REVIEW ($000s except days, proppant, pumped, horsepower and units) Three months ended Six months ended June 30, June 30, June 30, June 30, 2025 2024 2025 2024 Fracturing services Fracturing operating days (1)(2) 312 377 799 944 Proppant pumped (tonnes) (3) 533,000 638,000 1,319,000 1,470,000 Fracturing crews 6 8 6 8 Dual fuel horsepower ('HP'), end of period 369,550 349,800 369,550 349,800 Total HP, end of period 478,400 490,000 478,400 490,000 Coiled tubing services Coiled tubing operating days (1) 1,227 1,368 2,611 2,720 Active coiled tubing units, end of period 21 23 21 23 Total coiled tubing units, end of period 35 35 35 35 (1) An operating day is defined as any coiled tubing or fracturing work that is performed in a 24-hour period, exclusive of support equipment. (2) Includes operational results from terminated operations of the U.S. fracturing cash generating unit ('CGU') of nil and 54 days for the three and six months ended June 30, 2025 (72 and 189 days for three and six months ended June 30, 2024). (3) Includes proppant pumped (tonnes) from terminated operations of the U.S. fracturing cash generating unit ('CGU') of nil and 155,330 for the three and six months ended June 30, 2025 (137,000 and 409,000 for three and six months ended June 30, 2024). Expand SECOND QUARTER 2025 HIGHLIGHTS Consolidated revenue for the three months ended June 30, 2025 of $228.0 million, was in line with revenue of $231.4 million for the three months ended June 30, 2024 and down 26% from $307.7 million for the three months ended March 31, 2025, which is typically the busiest quarter for the Company and the industry. Net income for the three months ended June 30, 2025 was $5.9 million ($0.08 per diluted share) compared to $10.5 million ($0.14 per diluted share) in the same period of 2024 and $24.2 million ($0.33 per diluted share) for the three months ended March 31, 2025. Included in net income for three months ended June 30, 2025 was share based compensation expense of $1.7 million, compared to $1.3 million during the three months ended March 31, 2025 and $2.1 million during the three months ended June 30, 2024. For the three months ended June 30, 2025, Adjusted EBITDA was $34.8 million (15% of revenue) compared to $41.7 million (18% of revenue) in Q2 2024 and $59.0 million (19% of revenue) in Q1 2025. Free Cash Flow for the three months ended June 30, 2025 was $17.3 million compared to $20.5 million in Q2 2024 and $32.2 million in Q1 2025. During the second quarter of 2025, STEP repurchased and cancelled 166,100 shares at an average price of $3.90 per share under its Normal Course Issuer Bid ('NCIB'). STEP continues to strengthen its balance sheet while investing into the long-term sustainability of the business: The Company had Net Debt of $43.9 million at June 30, 2025, compared to $52.7 million at December 31, 2024 and $84.7 million at March 31, 2025. The Company invested $13.5 million for the three months ended June 30, 2025 into sustaining and optimization capital budget expenditures, ensuring that the fleet maintains a high level of operational readiness while also selectively investing into technology to further STEP's strategy of displacing diesel with natural gas. Working Capital as at June 30, 2025 of $77.0 million was $41.6 million higher than the $35.4 million at December 31, 2024 and $26.5 million lower than the $103.5 million as at March 31, 2025. Working capital fluctuations are typical and are influenced by activity levels and timing of client receipts. SECOND QUARTER 2025 OVERVIEW Commodity prices were volatile throughout the second quarter of 2025, with both oil and natural gas prices down approximately 10% quarter over quarter. The decline in gas prices is partially attributable to the shoulder season, when the reduced demand from winter heating has yet to be replaced by power demand for summer cooling. In addition to the ongoing turmoil created by the U.S. tariffs, oil prices were also impacted by the supply announcements from the Organization of the Petroleum Exporting Countries ('OPEC') and allied non-OPEC nations ('OPEC+') and the eruption of open hostilities between Israel and Iran. Oil prices traded in a wide range from $57 to $75 (USD) per barrel, with the benchmark West Texas Intermediate ('WTI') crude price averaging $63.72 (USD) per barrel in Q2 2025, down from $71.42 (USD) per barrel in Q1 2025. Henry Hub averaged $3.52 (USD) per million cubic feet ('Mcf') in Q2 2025, down from $3.87 (USD) per Mcf in Q1 2025, while AECO-C Daily averaged $1.75 (CAD) per Mcf in Q2 2025, down from $2.12 (CAD) per Mcf in Q1 2025. Natural gas prices typically benefit from the winter heating season, with colder weather driving higher demand. Oilfield service levels are primarily reflected in drilling rig counts publicly reported by Baker Hughes and estimates made by Primary Vision for fracturing crews in the U.S. Land based drilling rigs in the U.S. averaged 556 rigs in the second quarter, down from 572 rigs in the first quarter. Canadian rig counts were down due to spring break up, averaging 127 during the second quarter, compared to 214 in the first quarter, which is typically the busiest drilling season in Canada. U.S. fracturing fleets declined in the second quarter to an average of 192, down from 202 in the first quarter of 2025. STEP's consolidated revenue in the second quarter was $228.0 million, down from $307.7 million in the first quarter of 2025 and in line with the $231.4 million recorded in the same period from the prior year despite the termination of the U.S. fracturing business. Despite the spring break up conditions, the fracturing service line had good utilization through the quarter, with 312 operating days across six crews, pumping 533 thousand tons of sand. Coiled tubing services were also well utilized, operating 1,227 days across 21 units. Adjusted EBITDA of $34.8 million (15% Adjusted EBITDA %) was down from the $59.0 million (19% Adjusted EBITDA %) in the first quarter of 2025 and down from $41.7 million (18% Adjusted EBITDA %) in the same period last year. The Company's margins continue to be impacted by the cumulative effect of several years of high inflation which increase the cost profile, oversupply of fracturing capacity in the market causing pricing pressure, and increased sand volumes which are generally at lower margins. Net income was $5.9 million in Q2 2025 ($0.08 diluted income per share), lower than the $24.2 million in Q1 2025 ($0.33 diluted income per share) and the $10.5 million net income in Q2 2024 ($0.14 diluted income per share). Net income included $1.7 million in share‐based compensation expense (Q1 2025 ‐ $1.3 million, Q2 2024 ‐ $2.1 million expense) and $1.7 million in finance costs (Q1 2025 ‐ $2.0 million, Q2 2024 ‐ $2.8 million). Free Cash Flow was $17.3 million in Q2 2025 ($0.24 diluted Free Cash Flow per share), sequentially lower than the $32.2 million ($0.43 diluted Free Cash Flow per share) in Q1 2025 and lower than the $20.5 million ($0.28 diluted Free Cash Flow per share) in Q2 2024. While working capital decreased by $26.5 million from the first quarter of 2025 to land at $77.0 million at the end of the second quarter, this was still significantly higher than the $35.4 million at the end of the fourth quarter of 2024. While the build in working capital is typical for the first half of the year, which follows a slower Q4 that realizes a sizable working capital recovery, the increase in the current year was inflated by the inclusion of $11.4 million in assets held for sale reclassified from property and equipment related to the terminated U.S. fracturing operations. Net Debt decreased to $43.9 million from $52.7 million at the close of 2024. The decrease in Net Debt and improvement in Adjusted EBITDA resulted in a 12-month trailing Funded Debt to Adjusted Bank EBITDA of 0.42:1.00, well under the limit of 3.00:1 in the Company's Credit Facilities (as defined in Capital Management – Debt below). The Company continued its Normal Course Issuer Bid in the second quarter and acquired 166,100 shares at a weighted average price of $3.90 per share in the quarter. Late in the first quarter of 2025, management committed to a plan to terminate the Company's U.S. fracturing operations. Active operations were terminated and equipment has been marshalled to STEP's yards for sale or transfer to Canada. Certain costs associated with legacy fracturing operations and decommissioning were incurred in the second quarter, resulting in Adjusted EBITDA from terminated operations of negative $2.9 million, which is not included in the Q2 reported Adjusted EBITDA of $34.8 million. These costs are expected to reduce to more modest levels for the balance of the year. Market Outlook The initial uncertainty stemming from the decisions made by the U.S. administration has lessened as markets discover that the tactical nature of these decisions means that they are likely to change through the course of negotiations. Similarly, the geopolitical tensions created by the conflict in the Middle East have also eased as the primary actors have backed away from deeper confrontation. Commodity prices continue to look for direction, drifting sideways until a clear catalyst for growth or recession becomes apparent. North American gas prices are shifting from the shoulder season in Q2 to the more pronounced summer power demand season, although high storage levels will limit upside to price until the anticipated draw from new LNG offtake facilities begins to be felt in the markets. Canada's first shipment of liquified natural gas ('LNG') departed the LNG Canada facility on June 30, 2025, marking the successful start of operations for Canada's first large scale LNG export facility. The multiyear outlook for natural gas continues to show promise, with approximately 10 billion cubic feet ('BCF') per day of demand from additional LNG facilities in Canada and the U.S. expected by 2030, in addition to the demand for more power generation. Oil prices have retreated from the second quarter spikes back to the mid $60s (USD) per barrel. Demand has remained relatively resilient, absorbing the additional OPEC+ supply that has been added to the market this year. Global crude oil and related product inventory levels are near the bottom of their five-year range, providing some buffer in the event that demand from the summer driving season isn't enough to consume supply. Oil demand is expected to grow modestly, but catalysts for increased oil production in North America are limited, given the global market dynamics. STEP's revenue is largely driven by natural gas and natural gas liquids ('NGLs'), which should shield STEP's schedule from the worst of the commodity price volatility. However, if the volatility continues and commodity prices weaken it is likely that clients could defer work into later quarters or trim their core capital programs. STEP maintains close contact with its clients and will adjust its operations if activity slows. The third quarter fracturing schedule is expected to see a modest uptick in activity, although more client supplied sand, along with shifting client schedules and competitive pressures will likely result in flat to down sequential revenue. Margins on work with client supplied sand are typically higher relative to margins on work with STEP supplied sand, given the high volumes of sand pumped by many STEP clients. Offsetting this higher margin work is inflation on input costs, driven in many instances by the escalating tariff actions taken by governments around the world. The remission of tariffs on proppant imported from the U.S. provides some relief, but the ongoing tariffs on many products entering the U.S. and Canada are resulting in cost inflation that can be difficult to pass through to clients. STEP's trial of the NGx, Canada's first 100% natural gas powered fracturing pump is expected to see steady utilization as clients respond positively to the increased diesel displacement that this pump offers. Coiled tubing activity is expected to stay relatively steady across all regions, with a slight increase in activity relative to the second quarter. Increased market penetration with STEP's Coil+ split string technology is expected to offset the lower industry demand associated with a slowing rig count. Similar to fracturing, tariffs continue to impact the industry, particularly on the cost of coiled tubing strings, which is tariffed when it enters the U.S. as raw steel and then again when it enters Canada and is tariffed by the Canadian government. STEP has submitted a request for remission of the Canadian tariffs and is optimistic that it will be successful given the recent reversal of tariffs on proppant entering Canada. Expectations for the fourth quarter remain modest. This quarter is typically characterized by slower activity as clients exhaust their annual capital budgets, resulting in margin compression for service providers as increased competition and lower fixed cost leverage weigh on results. The slower than expected ramp in demand coming from newly commissioned LNG facilities in Canada and the U.S. is limiting drawdown of natural gas inventories and is not expected to create sufficient market incentive for producers to add to their capital budgets for the year. Further clarity on this is likely to be forthcoming late in the third quarter or early in the fourth quarter. Views on 2026 are beginning to clarify, with activity in the first quarter expected to be in line with the first quarter of 2025. Activity levels through the year will likely be affected by the ramp in production at LNG Canada, which will process approximately 2 BCF per day when fully operational. On balance, pricing is largely in line with what was expected in 2025. Increased oilfield service capacity and limited producer growth has put downward pressure on margins relative to 2024. Cost control remains a focus for STEP as it navigates the current economic uncertainty. Free Cash Flow will be committed towards additional fleet investments required for sustaining and optimization needs, as well as additional debt repayment. The increase in STEP's share price and the cautious outlook meant that the NCIB was used only sparingly in the second quarter. The Company will retain the flexibility to engage opportunistically on the NCIB if conditions change. FINANCIAL REVIEW Revenue For the three and six months ended June 30, 2025, revenue decreased 1% to $228.0 million and 3% to $535.7 million compared to $231.4 million and $551.5 million for the three and six months ended June 30, 2024. Alignment with large scale operators continues to provide a strong baseline of utilization for fracturing and coiled tubing operations in both the quarter and for the year to date. STEP operated six fracturing crews during the quarter, down from eight for the same period of the prior year. Fracturing operating days for the quarter were down 17% and have decreased by 15% for the year to date. The reduction in fracturing crews and operating days is all associated with the termination of U.S. fracturing operations during 2025. Despite the declines in operating days and active fleets, fracturing revenue was up 4% for the quarter and only declined by 2% for the year to date reflecting the increased proppant pumped for the Canadian Frac CGU as a result of higher pumping intensity. STEP deactivated one coiled tubing spread during the quarter bringing the total active spreads back down to 21 which is down two spreads from the prior year. Coiled tubing operating days for the quarter were down 10% and have decreased by 4% for the year to date. New technology offerings and strategic client alignment in all operating basins have allowed the Company to maintain utilization levels per active spread despite the decrease in activity in the market as whole. Operating expenses Operating expenses includes employee costs, direct operating expenses such as repairs, transportation and facility costs, material and inventory costs, depreciation of equipment and share-based compensation for operational employees. The following table provides a summary of operating expenses: Employee costs and general operating expenses decreased slightly compared to the prior year for both the quarter and year to date as the wind down of U.S. fracturing operations was partially offset by inflationary impacts. Material and inventory costs increased significantly compared to the prior year for both the quarter and year to date as changes in sand mix, increases in STEP supplied sand and currency fluctuations increased the cost of materials. Selling, general and administrative expenses The following table provides a summary of selling, general and administrative expenses: Selling, general and administrative expenses were in line with the prior year for both the quarter and year to date. Share-based compensation expense was slightly lower in the second quarter of 2025 compared to the same period of 2024 as the share price was lower, however this was largely offset by higher employee costs. For the year to date, the higher employee costs in 2025 compared to the prior year have been largely offset by reduced general expenses. Terminated Operations Results from consolidated operations include the results from the terminated operations presented below. In the first quarter of 2025, the U.S. fracturing CGU was subject to changes in business conditions that materially impacted its expected economic performance. As a result, STEP decided to exit this market and terminated all further work related to these operations. The results of the terminated operations are as follows: ($000's) Three months ended Six months ended June 30, June 30, June 30, June 30, 2025 2024 2025 2024 U.S. Fracturing services terminated operations Fracturing operating days (1) - 72 54 189 Proppant pumped (tonnes) - 137,000 155,330 409,000 Fracturing crews - 2 - 2 (1) An operating day is defined as any coiled tubing or fracturing work that is performed in a 24-hour period, exclusive of support equipment. Expand NON-IFRS MEASURES AND RATIOS This Press Release includes terms and performance measures commonly used in the oilfield services industry that are not defined under IFRS. The terms presented are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-IFRS measures have no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The non-IFRS measures should be read in conjunction with the Company's quarterly financial statements and Annual Financial Statements and the accompanying notes thereto. 'Adjusted EBITDA' is a financial measure not presented in accordance with IFRS and is equal to net (loss) income before finance costs, depreciation and amortization, (gain) loss on disposal of property and equipment, current and deferred income tax provisions and recoveries, equity and cash settled share-based compensation, transaction costs, unrealized (gain) loss on derivatives, foreign exchange (gain) loss, impairment losses and Adjusted EBITDA from terminated operations (1). 'Adjusted EBITDA %' is a non-IFRS ratio and is calculated as Adjusted EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA % are presented because they are widely used by the investment community as they provide an indication of the results generated by the Company's normal course business activities prior to considering how the activities are financed and the results are taxed. The Company uses Adjusted EBITDA and Adjusted EBITDA % internally to evaluate operating and segment performance, because management believes they provide better comparability between periods. (1) STEP has expanded the definition of Adjusted EBITDA to exclude the Adjusted EBITDA from terminated operations in order to provide clarity on the Company's normal course business activities to users of these documents. As a reminder, in Q1 2025, the U.S. fracturing CGU was subject to changes in business conditions that materially impacted its expected future economic performance. As a result, STEP began an orderly process to terminate operations of this CGU following completion of the work scope in Q1 2025. The Company expects to transfer the U.S. fracturing CGU's recently refurbished Tier 4 dual fuel equipment to Canada and will dispose of the remaining equipment over the next several quarters. As not all the equipment is being disposed of, the accounting presentation does not meet the test for the IFRS standard for discontinued operations. The following table presents a reconciliation of the non-IFRS financial measure of Adjusted EBITDA to the IFRS financial measure of net income: (1) Adjusted EBITDA from terminated operations is calculated in the same manner as the calculation of Adjusted EBITDA but does not include non-applicable items, such as unrealized (gain) loss on derivatives nor foreign exchange losses (gain) amounts. The calculation of Adjusted EBITDA from terminated operations is as follows: 'Free Cash Flow' is a financial measure not presented in accordance with IFRS and is equal to net cash provided by operating activities adjusted for changes in non-cash Working Capital from operating activities, sustaining capital expenditures, term loan principal repayments and lease payments (net of sublease receipts). The Company may deduct or include additional items in its calculation of Free Cash Flow that are unusual, non-recurring or non-operating in nature. Free Cash Flow is presented as this measure is widely used in the investment community as an indication of the level of cash flow generated by ongoing operations. Management uses Free Cash Flow to evaluate the adequacy of internally generated cash flows to manage debt levels, invest in the growth of the business or return capital to shareholders. The following table presents a reconciliation of the non-IFRS financial measure of Free Cash Flow to the IFRS financial measure of net cash provided by operating activities. 'Free Cash Flow per share-basic' is a financial measure not presented in accordance with IFRS and is equal to Free Cash Flow divided by the weighted average number of shares outstanding – basic. Management uses Free Cash Flow per share-basic to evaluate the adequacy of internally generated cash flows to manage debt levels, invest in the growth of the business or return capital to shareholders on a normalized per basic share basis. The following table presents a reconciliation of the non-IFRS financial measure of Free Cash Flow per share-basic to the IFRS financial measure of net cash provided by operating activities. 'Free Cash Flow per share-diluted' is a financial measure not presented in accordance with IFRS and is equal to Free Cash Flow divided by the weighted average number of shares outstanding – diluted. Management uses Free Cash Flow per share-basic to evaluate the adequacy of internally generated cash flows to manage debt levels, invest in the growth of the business or return capital to shareholders on a normalized per diluted share basis. The following table presents a reconciliation of the non-IFRS financial measure of Free Cash Flow per share-basic to the IFRS financial measure of net cash provided by operating activities. 'Working Capital', 'Total long-term financial liabilities' and 'Net Debt' are financial measures not presented in accordance with IFRS. 'Working Capital' is equal to total current assets less total current liabilities. 'Total long-term financial liabilities' is comprised of loans and borrowings, long-term lease obligations and other liabilities. 'Net Debt' is equal to loans and borrowings before deferred financing charges less cash and cash equivalents and CCS derivatives. The data presented is intended to provide additional information about items on the statement of financial position and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. The following table represents the composition of the non-IFRS financial measure of Working Capital (including cash and cash equivalents). The following table presents the composition of the non-IFRS financial measure of Total long-term financial liabilities. The following table presents the composition of the non-IFRS financial measure of Net Debt. The oilfield services industry involves many risks, which may influence the ultimate success of the Company. The risks and uncertainties set out in the AIF and Annual MD&A are not the only ones the Company is facing. There are additional risks and uncertainties that the Company does not currently know about or that the Company currently considers immaterial which may also impair the Company's business operations and can cause the price of the Common Shares to decline. Readers should review and carefully consider the disclosure provided under the heading ' Risk Factors ' in the AIF and ' Risk Factors and Risk Management ' in the Annual MD&A, both of which are available on and the disclosure provided in the MD&A under the headings ' Market Outlook '. In addition, global and national risks associated with market uncertainty due to changing tariffs and other trade barriers may adversely affect the Company by, among other things, reducing economic activity resulting in lower demand, and pricing, for crude oil and natural gas products, and thereby the demand and pricing for the Company's services. Other than as supplemented in this Press Release, the Company's risk factors, and management thereof has not changed substantially from those disclosed in the AIF and Annual MD&A. FORWARD-LOOKING INFORMATION & STATEMENTS Certain statements contained in this Press Release constitute 'forward-looking statements' or 'forward-looking information' within the meaning of applicable securities laws (collectively, 'forward-looking statements'). These statements relate to the expectations of management about future events, results of operations and the Company's future performance (both operational and financial) and business prospects. All statements other than statements of historical fact are forward-looking statements. The use of any of the words 'anticipate', 'plan', 'contemplate', 'continue', 'estimate', 'expect', 'intend', 'propose', 'might', 'may', 'will', 'shall', 'project', 'should', 'could', 'would', 'believe', 'predict', 'forecast', 'pursue', 'potential', 'objective' and 'capable' and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. While the Company believes the expectations reflected in the forward-looking statements included in this Press Release are reasonable, such statements are not guarantees of future performance or outcomes and may prove to be incorrect and should not be unduly relied upon. In particular, but without limitation, this Press Release contains forward-looking statements pertaining to: 2025 and 2026 industry conditions and outlook, including commodity pricing and demand for oil and gas; the effect of LNG facilities on export capacity, natural gas storage, and industry activity levels; anticipated utilization and activity levels, revenue, pricing, and schedule; capabilities of the NGx, including fuel savings, and the Company's intent to invest in the technology; the oil and gas industry's ability to withstand volatility; the Company's ability to transfer assets where economic returns are most favorable; the Company's ability to test and evaluate next generation technologies; the effect large clients and their programs may have on the Company's activity levels; the Company's intention to invest in the development of next generation coiled tubing and fracturing technologies; the effect of tariffs and other trade barriers, inflation and cost increases on the Company and its margins; the Company's view that the NCIB is an effective means to provide value to shareholders; the impact of weather and break up on the Company's operations; the Company's ability to meet all financial commitments including interest payments over the next twelve months; the Company's plans regarding equipment; the Company's ability to manage its capital structure and adjust the Company's budget in light of market conditions; expected debt repayment and Funded Debt to Adjusted Bank EBITDA ratios; expected income tax and derivative liabilities; adequacy of resources to funds operations, financial obligations and planned capital expenditures; the Company's ability to retain its existing clients; the monitoring of impairment, amount and age of balances owing, and the Company's financial assets and liabilities denominated in U.S. dollars, and exchange rates; the Company's expected compliance with covenants under its Credit Facilities and its ability to satisfy its financial commitments thereunder. The forward-looking information and statements contained in this Press Release reflect several material factors and expectations and assumptions of the Company including, without limitation: the effect of macroeconomic factors, including global energy security concerns and levels of oil and gas inventories; 2025 and 2026 activity levels; the effect of tariffs, trade barriers, and related market concerns; levels of oil and gas production and LNG demand and export capacity on the market for the Company's services; that the Company will continue to conduct its operations in a manner consistent with past operations; the Company will continue as a going concern; the general continuance of current or, where applicable, assumed industry conditions; pricing of the Company's services; the Company's ability to market successfully to current and new clients; actual performance and availability of the NGx; predictable effect of seasonal weather and break up on the Company's operations; the Company's ability to utilize its equipment; the Company's ability to collect on trade and other receivables; Client demand for dual fuel fleets and emissions reduction technologies; the Company's ability to obtain and retain qualified staff and equipment in a timely and cost effective manner; levels of deployable equipment; future capital expenditures to be made by the Company; future funding sources for the Company's capital program; the Company's future debt levels; the expected receipt of tax amounts previously paid by the Company; the availability of unused credit capacity on the Company's credit lines; the impact of competition on the Company; the Company's ability to obtain financing on acceptable terms; the Company's continued compliance with financial covenants; the amount of available equipment in the marketplace; and client activity levels and spending. The Company believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable, but no assurance can be given that these factors, expectations and assumptions will prove correct. Actual results could also differ materially from those anticipated in these forward‐looking statements due to the risk factors set forth under the heading 'Risk Factors' in the AIF and under the heading Risk Factors and Risk Management in this Press Release. Any financial outlook or future orientated financial information contained in this Press Release regarding prospective financial performance, financial position or cash flows is based on the assumptions about future events, including economic conditions and proposed courses of action based on management's assessment of the relevant information that is currently available. Projected operational information, including the Company's capital program, contains forward looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future oriented financial information or a financial outlook. The actual results of the Company's operations will likely vary from the amounts set forth in these projections and such variations may be material. Readers are cautioned that any such financial outlook and future oriented financial information contains herein should not be used for purposes other than those for which it is disclosed herein. The forward-looking information and statements contained in this Press Release speak only as of the date of the document, and none of the Company or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. The reader is cautioned not to place undue reliance on forward-looking information. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS STEP will host a conference call on Thursday, August 7, 2025 at 9:00 a.m. MT to discuss the results for the second quarter. To listen to the webcast of the conference call, please click on the following URL: You can also visit the Investors section of our website at and click on 'Reports, Presentations & Key Dates'. To participate in the Q&A session, please call the conference call operator at: 1-800-717-1738 (toll free) 15 minutes prior to the call's start time and ask for 'STEP Energy Services Second Quarter 2025 Earnings Results Conference Call' The conference call will be archived on STEP's website at About Step STEP is an energy services company that provides coiled tubing, fluid and nitrogen pumping and hydraulic fracturing solutions. Our combination of modern equipment along with our commitment to safety and quality execution has differentiated STEP in plays where wells are deeper, have longer laterals and higher pressures. STEP has a high-performance, safety-focused culture and its experienced technical office and field professionals are committed to providing innovative, reliable and cost-effective solutions to its clients. Founded in 2011 as a specialized deep capacity coiled tubing company, STEP has grown into a North American service provider delivering completion and stimulation services to exploration and production ('E&P') companies in Canada and the U.S. Our Canadian services are focused in the Western Canadian Sedimentary Basin ('WCSB'), while in the U.S., our coiled tubing services are concentrated in the Permian and Eagle Ford in Texas, the Uinta-Piceance, and Niobrara-DJ basins in Colorado and the Bakken in North Dakota. Our four core values; Safety, Trust, Execution and Possibilities inspire our team of professionals to provide differentiated levels of service, with a goal of flawless execution and an unwavering focus on safety.
Yahoo
an hour ago
- Yahoo
Record Quarter as Savaria Delivers $16.3M of Net Earnings and Reaches 20.6% Adjusted EBITDA Margin* in Q2 2025
LAVAL, Quebec, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Savaria Corporation ('Savaria') (TSX: SIS), one of the global leaders in the accessibility industry, is pleased to announce its results for the second quarter of 2025. Highlights – Q2 2025 compared to Q2 2024 Revenue was $226.7M, up $5.4M or 2.4%, mainly due to a positive foreign exchange impact of 2.6% partially offset by an organic contraction of 0.7%. The revenue benefited from the contribution of Western Elevator acquired this quarter. Accessibility experienced growth of 1.9%, including growth of 3.3% coming from North America and partially offset by a contraction of 0.8% in Europe. Patient Care achieved revenue growth of 4.4%. Gross profit was $88.5M, up $5.5M or 6.6%, representing 39.0% of revenue, an increase of 150 bps compared to 37.5% in Q2 2024. Operating income was $26.7M, up $4.1M or 18.2%, representing 11.8% of revenue compared to 10.2% in Q2 2024. Adjusted EBITDA* was $46.7M, up $4.8M or 11.4%, representing $0.65 per share, up $0.06, when compared to Q2 2024. Adjusted EBITDA margin stood at 20.6% up 160 bps compared to 19.0% in Q2 2024. Accessibility adjusted EBITDA margin reached 21.9%. Patient Care adjusted EBITDA margin stood at 20.9%. Net earnings were $16.3M or $0.23 per share on a diluted basis, compared to $11.4M or $0.16 per share in Q2 2024. The ratio of net debt to adjusted EBITDA* stood at 1.34 in comparison to 1.63 as at December 31, 2024. Available funds* of $275.5M, as of June 30, 2025, to support working capital, investments and growth opportunities. Q2 YTD in thousands of dollars, except percentages and per-share amounts 2025 2024 Change 2025 2024 Change Revenue $ 226,746 $ 221,344 2.4 % $ 446,978 $ 430,788 3.8 % Gross profit $ 88,490 $ 82,974 6.6 % $ 171,741 $ 158,368 8.4 % % of revenue 39.0 % 37.5 % 150 bps 38.4 % 36.8 % 160 bps Operating income $ 26,712 $ 22,604 18.2 % $ 47,950 $ 40,325 18.9 % Net earnings1 $ 16,316 $ 11,383 43.3 % $ 28,795 $ 23,012 25.1 % Diluted net earnings per share 1 $ 0.23 $ 0.16 43.8 % $ 0.40 $ 0.32 25.0 % Adjusted net earnings*1 $ 20,829 $ 16,014 30.1 % $ 37,345 $ 30,347 23.1 % Adjusted net earnings per share*1 $ 0.29 $ 0.23 26.1 % $ 0.52 $ 0.43 20.9 % Adjusted EBITDA* $ 46,738 $ 41,945 11.4 % $ 87,385 $ 76,626 14.0 % Adjusted EBITDA per share* $ 0.65 $ 0.59 10.2 % $ 1.22 $ 1.08 13.0 % % of revenue 20.6 % 19.0 % 160 bps 19.6 % 17.8 % 180 bps *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.1 The amounts for 2024 reflect adjustments made for Q2 2024 and YTD, as detailed and explained in Section 7 of the MD& from the Executive Chairman and from the President & CEO 'As a result of our collective, global efforts, we achieved an adjusted EBITDA margin of 20.6%, meeting our Savaria One goal. We quickly pivoted our home elevator manufacturing for US distribution with a new production line in Greenville, South Carolina that now handles many of our residential elevator orders for American dealers. With available funds of over $275 million, we have the flexibility to invest in additional marketing for new products such as the Luma lift and Matot dumbwaiters, as well as seek out strategic acquisitions, giving us confidence for the remainder of the year and beyond,' said Marcel Bourassa, Executive Chairman. 'Our focus on transformation over the past 18 months uncovered many efficiencies from procurement, to pricing, to operations. The gross margin in the second quarter was 39% – our highest ever. Meeting our Savaria One goal for adjusted EBITDA margin in the second quarter is a testament to our employees' commitment to succeed. The senior leadership team has now initiated planning sessions for the second stage of Savaria One that will outline our strategy for the next three years. We are focused on growth including marketing of the Luma through-floor lift and additional Savaria products for European distribution. With a ratio of net debt to adjusted EBITDA* now at 1.34, we have a comfortable position for investments in growth and the management team is energized about the future,' said Sebastien Bourassa, President and CEO. Second Quarter Results - Q2 2025 compared to Q2 2024 REVENUE Revenue reached $226.7M, up $5.4M or 2.4%. The increase was mainly due to a positive foreign exchange impact of 2.6% combined with the revenue contribution from the acquisition of Western Elevator, partially offset by an organic contraction of 0.7%. Accessibility segment (78% of Q2-25 revenue): Revenue was $176.7M, an increase of $3.3M or 1.9%. Patient Care segment (22% of Q2-25 revenue): Revenue was $50.1M, an increase of $2.1M or 4.4%. OPERATING INCOME Operating income was $26.7M, up $4.1M or 18.2%, representing an operating margin of 11.8% compared to 10.2% in Q2 2024. The increase was mainly attributable to the additional revenue contribution and higher gross margins while partially offset by increased selling and administrative expenses and other expenses. ADJUSTED EBITDA Adjusted EBITDA and adjusted EBITDA margin* was $46.7M and 20.6%, respectively, compared to $41.9M and 19.0% for Q2 2024. Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin was $38.8M and 21.9%, respectively, compared to $36.2M and 20.9% for Q2 2024. Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $10.5M and 20.9%, respectively, compared to $8.2M and 17.0% for Q2 2024. *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A. Six-Month Results - YTD 2025 compared to YTD 2024 REVENUE The Corporation generated revenue of $447.0M, up $16.2M or 3.8%. The increase is mainly due to a positive foreign exchange impact of 3.0%, combined with the impact of the acquisition of Western Elevator and Matot. The growth was partially offset by the divestitures of Van-Action and Freedom Motors. OPERATING INCOME Operating income was $48.0M, up $7.6M or 18.9%, representing an operating margin of 10.7% compared to 9.4% in 2024. ADJUSTED EBITDA Adjusted EBITDA and adjusted EBITDA margin stood at $87.4M and 19.6%, respectively, compared to $76.6M and 17.8% in 2024. LIQUIDITY AND CAPITAL RESOURCES Savaria generated $61.5M of cash from operations which was primarily used to invest in capital projects, a business acquisition, repay debt and pay interest and dividends. As at June 30, 2025, the Corporation had a net debt* position of $231.2M and a ratio of net debt to adjusted EBITDA of 1.34 compared to 1.63 as of December 31, 2024. Outlook Savaria's fiscal 2025 forecast projects revenue of approximately $925M, with an adjusted EBITDA margin of approximately 20%. This revenue forecast is driven by volume and price increases, new product launches, and favorable foreign exchange effects across the Accessibility and Patient Care segments. Despite geopolitical uncertainties, the completion of Savaria One positions us well to sustain profitability. Structural improvements have enhanced production capacity, increased operational efficiencies, and generated meaningful cost savings through streamlined procurement. As one of the global leaders in the accessibility industry with extensive operations in Canada and the United States, Savaria is assessing its supply chain and evaluating and implementing strategies to optimize its North American manufacturing footprint. These efforts aim to maintain competitiveness and ensure continued service for our valued dealer partners. The above-mentioned outlook is a 'forward-looking statement' within the meaning of the securities laws of Canada and subject to the Corporation's disclosure statement. Environmental, Social and Governance ('ESG') Values As a global leader within the accessibility industry, Savaria is committed to minimizing its environmental footprint and upholding the highest social and governance standards. We believe that promoting environmentally and socially responsible behaviour across our organization is key to achieving sustainable growth and long-term value creation. By delivering products and solutions that promote accessibility, health, and wellness, improving operational efficiencies and resource usage, and engaging our employees and stakeholders, we'll create a stronger, more resilient business that will continue to be an industry leader while delivering positive social change. *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A. We recognize this work requires long-term vision, planning, and collaboration, yet also must be grounded in clear actions and an ongoing commitment to transparency. To that end, on April 30, 2025 Savaria published its ESG report for the fiscal year ended December 31, 2024. Through this report, Savaria discloses its strategy and initiatives on ESG matters that are important to its stakeholders, and where it sees an opportunity to have a positive and meaningful influence. The 2024 ESG report can be found under the investor relations section of our website at Savaria Corporation ( is a global leader in the accessibility industry. It provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as elevators for home and commercial use, stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and dumbwaiters. In addition, Savaria manufactures and markets a comprehensive selection of pressure management products, medical beds, as well as an extensive line of medical equipment and solutions for the safe movement of patients, such as transfer, lifting and repositioning aids. The Corporation operates a sales network of dealers worldwide and direct sales offices in North America, Europe (UK, Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic) and Australia. Savaria employs approximately 2,500 people globally and its plants are located across Canada, the United States, Mexico, Europe and China. Compliance with International Financial Reporting Standards ('IFRS') The information appearing in this press release has been prepared in accordance with IFRS. However, Savaria uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA per share, adjusted net earnings, adjusted net earnings per share, available funds, net debt and ratio of net debt to adjusted EBITDA for analysis purposes to measure its financial performance. These measures have no standardized definitions in accordance with IFRS and are therefore regarded as non-IFRS measures. These measures may therefore not be comparable to similar measures reported by other companies. Additional details for these non-IFRS measures can be found in sections 3, 6 and 8 of Savaria's MD&A, which is posted on Savaria's website at and filed with SEDAR+ at Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is presented in the section below. Forward-Looking Statements This press release includes certain statements that are 'forward-looking statements' within the meaning of the securities laws of Canada. Any statement in this press release that is not a statement of historical fact may be deemed to be a forward-looking statement. When used in this press release, the words 'believe', 'could', 'should', 'intend', 'expect', 'estimate', 'assume' and other similar expressions are generally intended to identify forward-looking statements. It is important to know that the forward-looking statements in this document describe the Corporation's expectations as at the date hereof, which are not guarantees of future performance of Savaria or its industry, and involve known and unknown risks and uncertainties that may cause Savaria's or the industry's outlook, actual results or performance to be materially different from any future results or performance expressed or implied by such statements. The Corporation's actual results could be materially different from its expectations if known or unknown risks affect its business, or if its estimates or assumptions turn out to be inaccurate. A change affecting an assumption can also have an impact on other interrelated assumptions, which could increase or diminish the effect of the change. As a result, the Corporation cannot guarantee that any forward-looking statement will materialize and, accordingly, the reader is cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements do not take into account the effect that transactions or special items announced or occurring after the statements are made may have on the Corporation's business. For example, they do not include the effect of sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. Unless otherwise required by applicable securities laws, Savaria disclaims any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing risks and uncertainties include the risks set forth under 'Risks and Uncertainties' in Savaria's latest Annual MD&A as well as other risks detailed from time to time in reports filed by Savaria with securities regulators in Canada. Results webcast and conference call on August 7, 2025, at 8:30 a.m. (EDT) Savaria will host a conference call on Thursday, August 7th at 8:30 a.m. Eastern Daylight Time with financial analysts to discuss results of the period ended June 30, 2025. Investors and members of the media are invited to participate on a listen-only basis. Conference call access: To register: (en): Link to the replay of the webcast will be available on the Corporation's website at For further information: Sébastien BourassaPresident and Chief Executive Officersb@ Stephen Reitknecht, CPAChief Financial Officersreitknecht@ Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided below. Complete financial statements and the management's report for Q2 2025 will be available shortly on Savaria's website and on SEDAR+ Reconciliation of adjusted net earnings*1 and adjusted EBITDA* with net earnings1 Q2 YTD in thousands of dollars, except per-share amounts 2025 2024 2025 2024 Net earnings1 $ 16,316 $ 11,383 $ 28,795 $ 23,012 Strategic initiatives expenses 4,607 5,347 9,277 10,646 Other expenses (income) 1,391 764 2,164 (427 ) Income tax related to strategic initiatives and other expenses (1,485 ) (1,480 ) (2,891 ) (2,884 ) Adjusted net earnings*1 $ 20,829 $ 16,014 $ 37,345 $ 30,347 Adjusted net earnings per share*1 $ 0.29 $ 0.23 $ 0.52 $ 0.43 Income tax related to strategic initiatives and other expenses 1,485 1,480 2,891 2,884 Income tax expense 5,742 4,407 10,979 8,158 Depreciation of fixed assets 2,570 2,234 5,305 4,371 Depreciation of right-of-use assets 3,339 2,737 6,501 5,418 Amortization of intangible assets 7,472 7,576 14,813 15,020 Net finance costs 4,654 6,814 8,176 9,155 Stock-based compensation 647 683 1,375 1,273 Adjusted EBITDA* $ 46,738 $ 41,945 $ 87,385 $ 76,626 Adjusted EBITDA per share* $ 0.65 $ 0.59 $ 1.22 $ 1.08 Diluted weighted average number of shares 71,858,056 71,405,637 71,869,297 71,309,308 *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.1 The amounts for 2024 reflect adjustments made for Q2 and YTD 2024, as detailed and explained in Section 7 of the MD& in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
2 hours ago
- Business Wire
Slate Grocery REIT Reports Second Quarter 2025 Results
TORONTO--(BUSINESS WIRE)--Slate Grocery REIT (TSX: SGR.U) (TSX: (the "REIT"), an owner and operator of U.S. grocery- anchored real estate, today announced its financial results and highlights for the three and six months ended June 30, 2025. "The strength of our portfolio is reflected in another quarter of healthy same-property NOI growth, supported by sustained demand for our high-quality spaces and consistent double-digit renewal spreads," said Blair Welch, Chief Executive Officer of Slate Grocery REIT. "At the same time, we remain focused on prudently managing the REIT's balance sheet and upcoming debt maturities. Against a backdrop of favorable fundamentals and attractive supply-demand dynamics in the grocery-anchored sector, we believe our portfolio – anchored by below-market rents – is well positioned to drive stable growth and long-term value." For the CEO's letter to unitholders for the quarter, please follow the link here. Highlights Several consecutive quarters of strong leasing volumes at attractive spreads continued to drive same-property Net Operating Income ('NOI') growth of 3.6% or $5.7 million on a trailing twelve-month basis, adjusting for completed redevelopments The REIT completed 423,894 square feet of total leasing in the quarter; renewals 1 were completed at 13.8% above expiring rents, and new deals were completed at 28.8% above comparable average in-place rent Portfolio occupancy remained stable at 94.0% as at June 30, 2025 The REIT's average in-place rent of $12.77 per square foot remains well below the market average of $24.00 2, providing significant runway for continued rent increases The REIT has only $171.4 million of debt maturing through the end of 2026, at the REIT's proportionate interest, which represents just 12.3% of the total debt outstanding and provides a stable outlook for the REIT's near-term financing costs During the second quarter, the REIT refinanced a four-property portfolio for $39.3 million and entered into a credit facility totaling $17.4 million at attractive spreads, highlighting continued demand for high-quality grocery-anchored real estate assets in the lending space Subsequent to quarter end, the REIT amended two of its existing interest rate swaps, extending the total maturity to 2.8 years and achieving a blended weighted average interest rate of 5.0% on a proportionate interest basis The REIT's current portfolio valuation continues to provide significant positive leverage; this attractive valuation, combined with continued NOI growth, is expected to increase portfolio valuation over time The REIT's units continue to trade at a discount to net asset value, presenting a compelling investment opportunity for unitholders looking for an attractive total return (1) As of March 31, 2025, the REIT revised its 'Deal Types' methodology. Refer to 'Leasing and Property Portfolio' in Part II of Management's Discussion and Analysis for further details. (2) CBRE Econometric Advisors, Q2 2025 Expand Summary of Q2 2025 Results Three months ended June 30, (thousands of U.S. dollars, except per unit amounts) 2025 2024 Change % Rental revenue $ 52,385 $ 51,818 1.1% NOI 1 2 $ 41,660 $ 41,442 0.5% Net income 2 $ 13,081 $ 14,003 (6.6)% Same-property NOI (3 month period, 114 properties) 1 2 $ 41,390 $ 40,930 1.1% Same-property NOI (12 month period, 111 properties) 1 2 $ 159,856 $ 154,863 3.2% New leasing (square feet) 2 33,516 84,679 (60.4)% New leasing spread 2 28.8% 28.0% 2.9% Total leasing (square feet) 2 423,894 706,811 (40.0)% Total leasing spread 2 11.6% 10.0% 16.0% Weighted average number of units outstanding ("WA units") 60,403 60,327 0.1% FFO 1 2 $ 15,883 $ 17,472 (9.1)% FFO per WA units 1 2 $ 0.26 $ 0.29 (10.3)% FFO payout ratio 1 2 81.6% 74.2% 10.0% AFFO 1 2 $ 12,624 $ 14,095 (10.4)% AFFO per WA units 1 2 $ 0.21 $ 0.23 (8.7)% AFFO payout ratio 1 2 102.7% 92.0% 11.6% Fixed charge coverage ratio 1 3 1.9x 2.0x (5.0)% Expand (thousands of U.S. dollars, except per unit amounts) June 30, 2025 December 31, 2024 Change % Total assets $ 2,241,469 $ 2,233,699 0.3% Total assets, proportionate interest 1 2 $ 2,449,571 $ 2,444,143 0.2% Debt $ 1,177,515 $ 1,166,655 0.9% Debt, proportionate interest 1 2 $ 1,379,662 $ 1,370,530 0.7% Net asset value per unit $ 13.78 $ 13.84 (0.4)% Number of properties 2 116 116 —% Portfolio occupancy 2 94.0% 94.8% (0.8)% Debt / GBV ratio 52.5% 52.2% 0.6% (1) Refer to 'Non-IFRS Measures' section below. (2) Includes the REIT's share of joint venture investments. (3) As of March 31, 2025, the REIT transitioned from disclosing interest coverage ratio to fixed charge coverage ratio. Refer to 'Fixed Charge Coverage Ratio' in Part IV of Management's Discussion and Analysis for further details. Expand Conference Call and Webcast Senior management will host a live conference call at 9:00 am ET on August 7, 2025 to discuss the results and ongoing business initiatives of the REIT. The conference call can be accessed by dialing (289) 514-5100 or 1 (800) 717-1738. Additionally, the conference call will be available via simultaneous audio found at A replay will be accessible until August 21, 2025 via the REIT's website or by dialing (289) 819-1325 or 1 (888) 660-6264 (access code 47849#) approximately two hours after the live event. About Slate Grocery REIT (TSX: SGR.U / Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately $2.4 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants are expected to provide unitholders with durable cash flows and the potential for capital appreciation over the longer term. Visit to learn more about the REIT. About Slate Asset Management Slate Asset Management is a global investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real assets space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit to learn more, and follow Slate Asset Management on LinkedIn, X (Twitter), and Instagram. Supplemental Information All interested parties can access Slate Grocery's Supplemental Information online at in the Investors section. These materials are also available on SEDAR+ or upon request to the REIT at info@ or (416) 644-4264. Forward Looking Statements Certain information herein constitutes 'forward-looking information' as defined under Canadian securities laws which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words 'plans', 'expects', 'does not expect', "forecasts", 'scheduled', 'estimates', 'intends', 'anticipates', 'does not anticipate', 'projects', 'believes', or variations of such words and phrases or statements to the effect that certain actions, events or results 'may', 'will', 'could', 'would', 'might', 'occur', 'be achieved', or 'continue' and similar expressions identify forward-looking statements. Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, however, management can give no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward- looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators. Non-IFRS Measures This news release and accompanying financial statements are based on IFRS® Accounting Standards ('IFRS Accounting Standards'), as issued by the International Accounting Standards Board ('IASB'). We disclose a number of financial measures in this news release that are not measures used under IFRS Accounting Standards, including NOI, same-property NOI, FFO, FFO payout ratio, AFFO, AFFO payout ratio, adjusted EBITDA, fixed charges and the fixed charge coverage ratio, in addition to certain measures on a per unit basis. NOI is defined as rental revenue less operating expenses, prior to straight-line rent, IFRIC 21, Levies ("IFRIC 21") property tax adjustments and adjustments for equity investments. Same-property NOI includes those properties owned by the REIT for each of the current period and the relevant comparative period, excluding those properties under development. FFO is defined as net income adjusted for certain items including transaction/disposition costs, change in fair value of properties, change in fair value of financial instruments, deferred income taxes, unit income (expense), adjustments for equity investments and IFRIC 21 property tax adjustments. AFFO is defined as FFO adjusted for straight-line rental revenue and revenue sustaining capital, leasing costs and tenant improvements. FFO payout ratio and AFFO payout ratio are defined as distributions declared divided by FFO and AFFO, respectively. FFO per WA unit and AFFO per WA unit are defined as FFO and AFFO divided by the weighted average class U equivalent units outstanding, respectively. Adjusted EBITDA is defined as NOI less general and administrative expenses at the REIT's proportionate interest. Fixed charges include principal payments and cash interest paid, net at the REIT"s proportionate interest. Fixed charge coverage ratio is defined as adjusted EBITDA divided by fixed charges at the REIT's proportionate interest. Net asset value is defined as the aggregate of the carrying value of the REIT's equity, deferred income taxes and exchangeable units of subsidiaries. Proportionate interest represents financial information adjusted to reflect the REIT's equity accounted joint ventures and financial real estate assets and its share of net income (losses) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the REIT's ownership percentage of the related investment. We utilize these measures for a variety of reasons, including measuring performance, managing the business, capital allocation and the assessment of risk. Descriptions of why these non-IFRS measures are useful to investors and how management uses each measure are included in Management's Discussion and Analysis. We believe that providing these performance measures on a supplemental basis to our IFRS Accounting Standards results is helpful to investors in assessing the overall performance of our businesses in a manner similar to management. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with IFRS Accounting Standards. We caution readers that these non-IFRS financial measures may differ from the calculations disclosed by other businesses, and as a result, may not be comparable to similar measures presented by others. SGR-FR The table below summarizes a calculation of non-IFRS measures based on financial information in accordance with IFRS Accounting Standards. Three months ended June 30, (in thousands of U.S. dollars, except per unit amounts) 2025 2024 NOI 1 2 $ 41,660 $ 41,442 General and administrative expenses (3,996) (3,949) Cash interest, net (14,419) (13,560) Finance charge and mark-to-market adjustments (1,120) (436) Current income tax (expense) recovery (238) 518 Adjustments for joint venture investments (2,692) (2,819) Non-controlling interest (3,276) (3,678) Capital expenditures (1,798) (1,407) Leasing costs (803) (611) Tenant improvements (694) (1,405) AFFO 1 2 $ 12,624 $ 14,095 (1) Refer to 'Non-IFRS Measures' section above. (2) Includes the REIT's share of joint venture investments. Expand Three months ended June 30, (in thousands of U.S. dollars, except per unit amounts) 2025 2024 Net income 1 $ 13,081 $ 14,003 Interest and finance costs 15,539 13,996 Change in fair value of financial instruments 608 (272) Disposition costs — 290 Change in fair value of properties 8,454 11,706 Deferred income tax expense 2,174 1,570 Current income tax expense (recovery) 238 (221) Unit expense (income) 1,122 (325) Adjustments for joint venture investments 3,331 3,261 Straight-line rent revenue (111) (30) IFRIC 21 property tax adjustment (6,983) (6,696) Adjusted EBITDA 1 2 $ 37,453 $ 37,282 Adjusted EBITDA 1 2 $ 37,453 $ 37,282 Cash interest paid (16,656) (15,814) Principal payments (2,913) (2,997) Total fixed charges 1 $ (19,569) $ (18,811) Fixed charge coverage ratio 1 2 3 1.9x 2.0x (1) Includes the REIT's share of joint venture investments. (2) Refer to 'Non-IFRS Measures' section above. (3) As of March 31, 2025, the REIT transitioned from disclosing interest coverage ratio to fixed charge coverage ratio. Refer to 'Fixed Charge Coverage Ratio' in Part IV of Management's Discussion and Analysis for further details. Expand December 31, 2024 (in thousands of U.S. dollars, except per unit amounts) Statement of Financial Position Joint Venture Investments Proportionate Share (Non-IFRS) Statement of Financial Position Joint Venture Investments Proportionate Share (Non-IFRS) ASSETS Non-current assets Properties $ 2,065,464 $ 312,300 $ 2,377,764 $ 2,054,511 $ 310,400 $ 2,364,911 Joint venture investments 118,961 (118,961) — 112,429 (112,429) — Interest rate swaps — — — 4,690 — 4,690 Other assets 3,558 — 3,558 3,624 — 3,624 $ 2,187,983 $ 193,339 $ 2,381,322 $ 2,175,254 $ 197,971 $ 2,373,225 Current assets Cash 25,603 7,305 32,908 22,668 4,851 27,519 Accounts receivable 20,502 1,014 21,516 23,417 1,723 25,140 Other assets 4,572 5,657 10,229 4,327 4,629 8,956 Prepaids 2,146 701 2,847 5,050 1,025 6,075 Interest rate swaps 663 86 749 2,983 245 3,228 $ 53,486 $ 14,763 $ 68,249 $ 58,445 $ 12,473 $ 70,918 Total assets $ 2,241,469 $ 208,102 $ 2,449,571 $ 2,233,699 $ 210,444 $ 2,444,143 LIABILITIES Non-current liabilities Debt $ 1,162,289 $ 59,371 $ 1,221,660 $ 1,120,616 $ 59,914 $ 1,180,530 Interest rate swaps 1,545 — 1,545 — — — Deferred income taxes 156,968 — 156,968 153,580 2 153,582 Other liabilities 4,256 876 5,132 4,378 837 5,215 $ 1,325,058 $ 60,247 $ 1,385,305 $ 1,278,574 $ 60,753 $ 1,339,327 Current liabilities Debt 15,226 142,776 158,002 46,039 143,961 190,000 Accounts payable and accrued liabilities 42,449 5,079 47,528 42,071 5,730 47,801 Exchangeable units of subsidiaries 9,583 — 9,583 8,733 — 8,733 Distributions payable 4,323 — 4,323 4,323 — 4,323 $ 71,581 $ 147,855 $ 219,436 $ 101,166 $ 149,691 $ 250,857 Total liabilities $ 1,396,639 $ 208,102 $ 1,604,741 $ 1,379,740 $ 210,444 $ 1,590,184 EQUITY Unitholders' equity $ 666,007 $ — $ 666,007 $ 673,474 $ — $ 673,474 Non-controlling interest 178,823 — 178,823 180,485 — 180,485 Total equity $ 844,830 $ — $ 844,830 $ 853,959 $ — $ 853,959 Total liabilities and equity $ 2,241,469 $ 208,102 $ 2,449,571 $ 2,233,699 $ 210,444 $ 2,444,143 Expand
