Daily Brief Energy/Materials: Anhui Conch Cement, JSW Steel Ltd, Schlumberger Ltd, Halliburton Co, Weatherford International , Range Resources, Antero Resources, Geopark Ltd, Transocean Ltd, Anton Oilfield and more

• We believe Anhui Conch is near the end of a prolonged downturn. Earnings should have bottomed out in 1Q24, with highly visible sequential Q/Q improvements throughout the rest of 2024.
• The recovery is not demand-driven but cost-led as implementation of new national standards resulting in higher production costs led to industry-wide price-hikes, benefiting Anhui Conch the low-cost producer.
• We see mild rebound in cement demand in 2025 will pave the way for further price hikes, reinforce the company’s earnings recovery and catalyze valuation expansion.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• JSW Steel Ltd
• Vista Land & Lifescapes

• Schlumberger’s revenue grew 12.9% YoY and beat estimates by 0.7%, while its net profit rose by 7.65% YoY and beat estimates by 2.9%.
• Revenue from North America grew 3% sequentially but fell 6% YoY due to lower drilling activity in the US.
• Management expects low single-digit sequential revenue growth in Q3 2024 and free cash flow in H2 2024 to be higher than in H1 2024.

• Halliburton’s Q2 revenue rises by 0.6% YoY, held back by an 8% YoY decline in revenue from North America. It missed its revenue estimates by 1.9%.
• Strong performance from the international operations more than offset the slowdown in North America. Revenue from international markets rose 8% YoY.
• For 2024, Halliburton forecasts a 10% YoY increase in international revenue, while North American revenue is expected to decline by 6-8% YoY.

• Weatherford International delivered another strong quarter, driven by significant year-over-year growth in revenue and improved operational efficiencies.
• The company reported a 15% increase in revenue compared to the same period last year, with the international business showing remarkable strength, particularly in the Middle East, North Africa, and Asia regions, which grew by 32%.
• Sequentially, revenue remained flat, which is notable given the typical seasonal decline expected in the first quarter.

• Range Resources Corporation showcased a robust set of financial and operational results in the first quarter of 2024, as detailed in the recent update.
• The company’s strategic initiatives have been closely aligned with industry demands and market conditions, facilitating a balanced approach towards capital allocation, operational efficiency, and shareholder returns.
• Range Resources reported successful operational outcomes with a focus on driving operational improvements and efficiency across the board.

• Antero Resources continues to exhibit operational efficiency and capital discipline, as evidenced by their recent performance and strategic initiatives.
• In the first quarter of 2024, Antero Resources delivered significant improvements in drilling and completion efficiencies.
• The company averaged 5.4 days per 10,000 lateral feet drilled, a slight improvement from 5.5 days in 2023, and achieved a quarterly record of 11.3 completion stages per day.

• 2Q24 production was 35,608 boe/d, which is in line with 2Q24 but below April production of ~37.5 mboe/d, as the company has experienced sporadic blockades and weather-associated flooding at Llanos 34.
• As a result production in Colombia was only 33,956 boe/d (we forecasted 35.5 mboe/d).
• The waterflood programme now generates 3.7 mbbl/d.

• Transocean reported adjusted EBITDA of $199 million on $767 million of adjusted contract drilling revenues for the first quarter, achieving an adjusted EBITDA margin of approximately 26%.
• Despite a slowdown in contract awards compared to last year, demand for high-specification ultra-deepwater drillships and harsh environment semisubmersibles remains robust, with improving day rates and longer contract terms.
• The company announced a 365-day contract extension for the Deepwater Asgard in the U.S. Gulf of Mexico, valued at approximately $195 million, and a contract for additional wells on the Deepwater Atlas at a day rate of $505,000.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Anton Oilfield