Mitchell Services' Strong Third Quarter Performance

Mitchell Services Limited (ASX: $MSV) has reported a robust third quarter financial and operational performance for the quarter ended 31 March 2024. The company achieved a quarterly revenue of $59.2m, quarterly EBITDA of $10.5m, and further net debt reduction of 13% since 31 December 2023 to $7.9m. The annualized Return on Invested Capital stands at 16.2%.

Executive Commentary on Performance

The Company has again delivered positive financial and operational results for FY24 Q3. Revenue increased by approximately 3.6% from the corresponding quarter in FY23, driven by a change in the mix of work and a modest increase in the operating rig count. EBITDA increased by approximately 13% in FY24 Q3 vs FY23 Q3, driven by an improvement in EBITDA margins and the increase in revenue volume. The cashflow performance of the business in FY24 Q3 was very strong, producing $9.4m in operating cash, representing a nearly five-fold improvement when compared to FY23 Q3. The Company has also seen material improvements across all earnings/profitability metrics for the 9 months ended 31 March 2024 compared to the corresponding period in FY23.

Summary of Mitchell Services' Performance

Mitchell Services Limited has delivered a strong third quarter financial and operational performance, with an increase in revenue and EBITDA. The Company has also achieved further net debt reduction and a significant improvement in EBT, driven by the increase in EBITDA and reduced levels of depreciation and finance costs. The annualized Return on Invested Capital for FY24 YTD was 16.2%, representing a substantial increase compared to the FY23 YTD figure of 4.9%. Mitchell Services remains committed to maximizing cash returns to shareholders, applying sensible limits to growth capital expenditure, and operating within a target net debt parameter of no more than $15.0m by 30 June 2024. The Company has effectively achieved its net debt target in advance of the target date and remains committed to its current capital management objectives.