Cordy Oilfield Services Inc. Reports First Quarter Results
CALGARY, ALBERTA--(Marketwired - May 21, 2014) - CORDY OILFIELD
SERVICES INC. (the "Corporation" or "Cordy") (TSX-VENTURE:CKK)
released today its first quarter results for the period ending
March 31, 2014.
For the period ended March 31,
2014
Cordy's first
quarter of 2014 was impacted by customer delays in obtaining
permits as well as delays in the start of new projects. Cordy's
consolidated revenues decreased by $8.3 million or 22 percent to
$29.9 million as compared to consolidated revenues of $38.2 million
in the period ended March 31, 2013. The period over period decrease
in consolidated revenue was largely attributable to declining
revenues experienced in the Heavy Construction segment and
Environmental Services segment as compared to the same period in
2013. This was somewhat offset by the increase in revenue in the
Manufacturing and Supply segment in the first quarter of 2014 as
compared to the same period in 2013.
Effective January 1,
2014, Cordy amalgamated its Pipeline and Facilities segment into
its Heavy Construction segment. As a result, Cordy now operates in
three segments, being Heavy Construction, Environmental Services
and Manufacturing and Supply. The 2013 comparative segmented
information for the Heavy Construction segment has been restated to
include the results previously presented as Pipeline and
Facilities. Results for Cordy by segment are as follows:
- Heavy Construction segment revenues decreased 21 percent and
net earnings decreased 107 percent in the first quarter of 2014
versus 2013. Operations in the oil sands region, pipeline
construction and the mining sector were slower due to customer
delays, partially offset by increased activity in the natural gas
sector.
- Environmental Services segment revenues decreased 32 percent
and net earnings declined 67 percent in the first quarter of 2014
versus 2013 due to reduced activity in the oil sands region as
customer demand decreased and projects were delayed.
- Manufacturing and Supply segment revenues increased 9 percent
and net earnings increased 200 percent in the first quarter of 2014
versus 2013. In 2014, the segment continued to focus on PDC
drill-bit sales which helped to increase revenues.
For the period ended
March 31, 2014, the Corporation had EBITDAS of $0.8 million as
compared to $5.9 million in the period ended March 31, 2013, which
amounts to a decrease of $5.1 million or 86 percent. By segment,
the Corporation's EBITDAS were as follows:
- The Heavy Construction segment EBITDAS declined by $2.9 million
to $0.5 million, primarily as a result of decreased customer demand
and delayed projects in the mining sector and oil sands
region.
- The Environmental Services segment EBITDAS declined by $2.4
million to $1.1 million in 2014 versus 2013, due to the loss of a
customer and project delays in the oil sands region.
- The Manufacturing and Supply segment had a positive impact on
EBITDAS of $0.2 million in 2014, an improvement from EBITDAS of
$nil in the first quarter of 2013.
The Corporation
reported a net loss of million from net earnings of $2.7
million
$0.7 million for the
three months ended March 31, 2014, a decrease of $3.4 for the three
months ended March 31, 2013.
Three month periods ended March 31, |
|
|
|
|
|
|
($ millions except share price and per share
amounts) |
2014 |
|
2013 |
|
Change ($) |
|
FINANCIAL RESULTS |
|
|
|
|
|
|
|
Revenue |
29.9 |
|
38.2 |
|
(8.3 |
) |
|
EBITDAS1 |
0.8 |
|
5.9 |
|
(5.1 |
) |
|
Net earnings (loss) and total comprehensive income (loss) |
(0.7 |
) |
2.7 |
|
(3.4 |
) |
|
Cash flow s generated from (used in) operating activities |
(3.4 |
) |
(1.1 |
) |
(2.3 |
) |
SHARE INFORMATION |
|
|
|
|
|
|
|
Earnings per share ($) |
(0.01 |
) |
0.03 |
|
(0.04 |
) |
1 Earnings before interest, taxes, depreciation,
amortization, impairment and share-based payments (see reader
advisory) |
|
|
|
|
|
|
|
|
|
Three month periods ended March 31, |
|
|
|
|
|
|
($ millions) |
2014 |
|
2013 |
|
Change ($) |
|
SEGMENT RESULTS |
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Heavy
Construction2 |
17.0 |
|
21.4 |
|
(4.4 |
) |
|
|
Environmental Services |
9.1 |
|
13.3 |
|
(4.2 |
) |
|
|
Manufacturing and Supply |
3.8 |
|
3.5 |
|
0.3 |
|
|
Total |
29.9 |
|
38.2 |
|
(8.3 |
) |
|
|
|
EBITDAS1 |
|
|
|
|
|
|
|
|
Heavy
Construction2 |
0.5 |
|
3.4 |
|
(2.9 |
) |
|
|
Environmental Services |
1.1 |
|
3.5 |
|
(2.4 |
) |
|
|
Manufacturing and Supply |
0.2 |
|
- |
|
0.2 |
|
|
|
Corporate |
(1.0 |
) |
(1.0 |
) |
- |
|
|
Total |
0.8 |
|
5.9 |
|
(5.1 |
) |
1 Earnings before interest, taxes, depreciation, amortization,
impairment and share-based payments (see reader advisory). |
2 The 2013 comparative segmented information for the Heavy
Construction segment has been restated to include the results
previously presented as Pipeline and Facilities. |
OUTLOOK
The Corporation is
dependent, to a degree, on the overall health of western Canada's
oil, natural gas, and mining sectors. The prospects for the oil
sands region are still anticipated to be the primary driver of
potential growth for our Heavy Construction and Environmental
Services segments. We anticipate this growth will be slower in the
first half of 2014 until customers begin to fully ramp-up their
projects in the latter part of 2014. Any significant growth will be
dependent upon winning new customers or new projects from existing
customers in 2014. Cordy expects that drilling activity in western
Canada will be the primary driver of business in Cordy's
Manufacturing and Supply segment throughout 2014. Cordy anticipates
expanding sales of its PDC drill bits in both North America and
select international locations.
Generally, these
sectors have projected reduced capital expenditure budgets for 2014
and have delayed projects. These factors imply that our industry
remains highly competitive with few opportunities to realize
pricing gains in 2014.
Complete copies of
Cordy's unaudited interim condensed consolidated financial
statements for the quarter ended March 31, 2014 and the associated
Management's Discussion and Analysis are available on our website
www.cordy.ca or on SEDAR at www.sedar.com.
Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
READER ADVISORY
Effective January 1,
2011, Cordy began reporting its financial results in accordance
with International Financial Reporting Standards (IFRS).
Prior-year's com- parative amounts were changed to reflect results
as if Cordy had always prepared its financial results using
IFRS.
This News Release
contains certain statements that constitute forward-looking
statements. These statements relate to future events or the
Corporation's future performance. All statements, other than
statements of historical fact, that address activities, events or
developments that the Corporation or a third party ex- pects or
anticipates will or may occur in the future, are forward-looking
statements. These include the Corporation's future growth, results
of operations, per- formance and business prospects and
opportunities; prevailing economic conditions; commodity prices;
sourcing, pricing and availability of raw materials, components and
parts, equipment, suppliers, facilities and skilled personnel;
dependence on major customers; uncertainties in weather and
temperature affecting the duration of the service periods and the
activities that can be completed; regional competition; and other
factors, many of which are beyond the Corporation's control. These
other factors include future prices of oil and natural gas and oil
and natural gas industry activity, including the effect of changes
in commodity prices on oil and natural gas exploration and
development activity, the ability to complete strategic
acquisitions and realize the anticipated benefits of any
acquisitions that are completed, the Corporation's outlook
regarding the competitive environment it operates in, and the
assumptions underlying any of the foregoing. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and
similar expressions. These statements involve known and unknown
risks, uncertainties and other factors, many of which are beyond
the Corporation's control, including those discussed under "Risks
and Uncertainties" and elsewhere in this News Release, that may
cause actual results or events to differ materially from those
anticipated in such forward-looking statements. The Corporation
believes that the expectations reflected in those forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this News Release should not be unduly
relied upon. These statements speak only as of the date of this
News Release. The Corporation does not intend, and does not assume
any obligation, to update these forward- looking statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. The forward-
looking statements contained in this News Release are expressly
qualified by this cautionary statement.
Cordy uses the
measures Earnings Before Interest, Taxes, Depreciation,
Amortization and Impairment and Share Based Compensation (EBITDAS)
in this news release. This measure does not have any standardized
meaning prescribed by International Financial Reporting Standards
(IFRS). It is, therefore, con- sidered to be non-IFRS term and may
not be comparable to similar measures presented by other entities.
Management of Cordy uses these non-IFRS measures to improve its
ability to compare financial results among reporting periods and to
enhance its understanding of operating performance, liquidity and
ability to generate funds to finance operations. This non-IFRS
measure is also provided to readers as additional information on
Cordy's operating performance, liquidity and ability to generate
funds to finance operations. EBITDAS is an approximate measure of
the Cordy's pre-tax operating cash flow and is generally used to
better measure performance and evaluate trends of individual
assets. EBITDAS comprises earnings before deducting interest and
other financial charges, income taxes, depreciation and
amortization, net income attributable to non-controlling interests
and preferred share dividends.
For general information:Cordy Oilfield Services Inc.David
Mullen, Chairman & Chief Executive
Officer403-266-2067403-237-6278david.mullen@cordy.caFor investor
relations information:Cordy Oilfield Services Inc.David Boomer, CA,
CPA, Chief Financial
Officer403-266-2067403-237-6278dave.boomer@cordy.cawww.cordy.ca
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