Oilfield chemicals provider CES Energy Solutions Corp. reported third quarter net income of $19.44 million, or seven cents per diluted share, versus a loss of $11.39 million, or four cents per share, in the same period last year.

Funds flow from operations more than tripled to $38.52 million from $11.7 million in the same period last year.

Revenue totalled $260.88 million, up from $145.14 million in the comparable 2016 quarter.

CES said it will pay a cash dividend of $0.0025 per common share on Dec. 15 to the shareholders of record at the close of business on Nov. 30.

The company said its results reflect the improved commodity prices that led to a rebound in industry activity.

In the third quarter of 2017, trough pricing levels continued in CES’s business lines, but the increase in activity allowed the company to sell more of its products. Consequently, its financial results for the third quarter and so far this year have consistently improved from the corresponding 2016 periods.

CES’s results include both its Permian based Catalyst acquisition, completed in August 2016 and the StimWrx acquisition in Canada, completed in the first quarter of 2017.

U.S. results

Third quarter revenue generated in the U.S. totalled $168.9 million, up from $92.8 million in the same period last year.

Year-to-date, revenue totalled $473.6 million, compared to $250.9 million in the first nine months of 2016.

This year-over-year increase is due to the improved market conditions in 2017 with a significant gain in the drilling fluids business, and increased U.S. treatment points, particularly in the Permian Basin after the Catalyst acquisition.

Offsetting these gains were the negative effects of Hurricane Harvey, which caused a slowdown in the Eagle Ford shale.

And while CES’s barite mill in Corpus Christi, Texas was spared from the brunt of Hurricane Harvey, operations were suspended for six days because the plant had no power. Later in the month one of the two mills was down due to water damage.

CES’s U.S. revenue was hurt by the devaluation of the U.S. dollar versus the Canadian dollar.

Canadian results

Third quarter revenue generated in Canada totalled $92 million, up from $52.3 million in the same period last year.

Year-to-date Canadian revenue totalled $277.2 million, up from $129.1 million in the nine months ended Sept. 30, 2016.

PureChem continued to gain market share in Canada in the production chemicals business as Canadian treatment points increased 25 per cent in the third quarter and 37 per cent so far this year over the comparable 2016 periods.

In the third quarter the drilling fluids business increased its operating days by 70 per cent from the third quarter of 2016, reflecting industry rig counts.

CES said the increase in revenues in Canada for the nine months was due to improved market conditions and the expansion of its business.

Outlook

With the improvement in industry activity in the second half of 2016 and to date in 2017, CES said it is “modestly optimistic.”

As the industry rebounded, CES gained market share in all of its segments, the company said.

However, CES said it has yet to realize any meaningful price increases in the recovery.

“The improvement in financial performance is evidence of the operating leverage in our consumable chemicals business model, and is a direct result of the cost reduction initiatives taken in 2016, combined with increased activity levels as CES has come off its fixed cost base,” the company said.

CES believes that over time it can continue to grow its share of the oilfield consumable chemical markets.

The company said recent competitor consolidations and business failures will provide further opportunities in this recovery.

CES said it will continue to assess merger and acquisition opportunities that would improve its competitive position and enhance profitability.

In its core businesses, CES will focus on increasing market share, controlling costs, developing or acquiring new technologies, and making strategic investments as required to position the business to capitalize on the industry rebound.