Enerflex Ltd.

Good day and thank you for standing by. Welcome to the Enerflex third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today. Jeff Federley, Vice President of Corporate Development and Investor Relations.

Thank you, Josh, and good morning, everyone. Welcome to our third quarter of 2024 results call. With me today are Mark Rossiter, President and CEO, and Preet Dhinza, SVP and CFO. During today's call, our prepared remarks will focus on three key areas. First, the strong operational performance of the business during Q3 and our outlook heading into 2025. second capital allocation including direct shareholder returns and capital spending and third our progress on near and long-term strategic priorities before i turn it over to mark i'll remind everyone that today's discussion will include non-ifrs and other financial measures as well as forward-looking statements regarding enterflex's expectations for future performance and business prospects forward-looking information involves risks and uncertainties and the stated expectations could differ materially from actual results or performance. For more information, refer to the advisory statements within our news release, MD&A, and other regulatory filings, all available on our website and under the CDAR Plus and EDGAR profiles. As part of our prepared remarks, we will be referring to slides in our updated investor presentation, which is available as part of the conference call link and on our website under the investor relations section. I'll now turn it over to Mark.

Thanks, Jeff, and thank you all for joining us on this morning's call. We are pleased to report another quarter of strong operational performance, with third quarter results reflecting solid execution across the company's business lines, as well as our hard work over the last few years building a strong, resilient company positioned for sustainable growth and value creation. The energy infrastructure and aftermarket services business lines continue to deliver steady performance, generating 65% of our gross margin before depreciation amortization during the quarter. Slide 11 in our updated investor presentation highlights how Interflex's business has shifted over the past five years and the increased stability we expect this will provide in our results over the coming years. Thus far in 2024, we have successfully reduced leverage to within our target range of 1.5X to 2.0X. We've been disciplined with growth capital and continued to reduce the cost of our debt. Visibility across the company's business lines remains solid. including approximately $1.6 billion of contracted revenue supporting our EI assets and a $1.3 billion engineered systems backlog. As a result, Enerflex is able to increase direct shareholder returns with the board approving a 50% increase to our quarterly dividend. I will now briefly touch on a few highlights for each of our business lines. Energy infrastructure continues to perform well across our three regions, the US, Latin America, and the Middle East. In the US, our contract compression fleet continues to benefit from the increasing natural gas production in the Permian Basin, operating at 94% utilization during the quarter across 428,000 horsepower. The business generated revenue of $37 million and gross margin before depreciation amortization of 70% during Q3 2024 compared to $33 million and 67% in the prior year. slides 18 and 19 highlight our fleet composition and the strong relative operating performance of this business. Demand for new contract compression equipment in the United States remains strong and we are selectively expanding our fleet. New units are being deployed under multi-year contracts in core operating regions with the focus on large horsepower, natural gas and electric drive applications. Slide 16 and 17 of the investor presentation highlight our international energy infrastructure business, which includes approximately 1.5 million horsepower of operated compression and 26 build, own, operate and maintain or boom projects in the Middle East and Latin America. Our two produced water projects in Oman continue to perform very well, and we are in the process of expanding one of those sites. Our international energy infrastructure business is supported by approximately $1.5 billion of contracted revenue and an average contract term that exceeds five years. Turning to aftermarket services, this business line benefited from strong activity levels and customer maintenance activities during the quarter. We expect these trends to continue into 2025. On the engineered system side, we recorded bookings of $349 million in the quarter and maintained our backlog at $1.3 billion. The majority of this backlog is scheduled to be converted into revenue over the next 12 months. Facility throughput remains steady and margins for this business line have benefited from favorable product mix and strong project execution. Demand for new engineered systems equipment and services in North America has been impacted by an extended weakness in domestic natural gas prices. This, combined with the anticipated overall mix of projects in Enerflex's engineered systems backlog, is expected to result in gross margin before depreciation and amortization more consistent with the long-term average for this business line. Notwithstanding, the near-term revenue for this business line is expected to remain steady, and the medium-term outlook for engineered systems products and services continues to be attractive, driven by increases in natural gas, oil, and produced water volumes across Enerflex's global footprint and decarbonization activities. Before I turn the call over to Preet, I want to emphasize that the underlying macro drivers for our business are very strong, with the ongoing focus on global energy security and the growing need for low emissions natural gas, resulting in a strong demand for Enerflex's energy infrastructure and energy transition solutions. Against this backdrop, our business lines continue to deliver solid performance, and we are focused on enhancing the profitability of our core operations. and Enterflex's ability to focus on growth and return of capital to shareholders. With that, I'll turn it over to Preet to speak to the financial highlights of the quarter.