Canada's Source Energy Q2 revenue falls 32% on weak demand

Source Energy Services

29/07/2026 22:11

Overview
Canada frac sand supplier's Q2 revenue fell 32% yr/yr amid lower customer activity
Q2 adjusted EBITDA dropped 47% yr/yr, missing two-analyst estimate
Company renewed share buyback program and appointed Jeffrey Bowers to board in the quarter

Outlook
Source expects stronger customer activity for remainder of 2026, but full-year activity slightly below 2025
Company expects continued strong mine gate deliveries into U.S. Lower 48 states in near term
Source anticipates increased proppant demand in WCSB driven by LNG projects and natural gas exports

Result Drivers
LOWER CUSTOMER ACTIVITY - Co said reduced activity in the Western Canadian Sedimentary Basin and customer plans to defer spending led to lower sales volumes and revenue
SALES MIX SHIFT - Co said increased mine gate and domestic sand sales reduced average realized sand price and contributed to revenue decline
PEACE RIVER COSTS - Co said higher production costs at Peace River facility due to slower ramp-up and need for incremental northern white sand volumes weighed on margins

Company press release: ID:nACSnxHlpa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Loss Per Share
 
C$0.43
 
Q2 Net Loss
 
C$5.59 mln
 
Q2 Adjusted EBITDA
Miss
C$18.52 mln
C$19.10 mln (2 Analysts)

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the construction materials peer group is "buy"
Wall Street's median 12-month price target for Source Energy Services Ltd is C$17.25, about 38.8% above its July 28 closing price of C$12.43
The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 4 three months ago

Reuters Recommended Reads
July 28 - Canada's Trican Q2 revenue slightly misses estimates on weather-related slowdown
July 29 - Canada's Precision Drilling Q2 revenue tops estimates on higher rig activity
July 29 - Germany's Uniper firms up 20-year LNG purchase deal with Canada

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)