CALGARY, Alberta, Aug. 23, 2017 (GLOBE NEWSWIRE) — CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (TSX-V:CKK) released today its second quarter 2017 results.
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| ($ 000’s) | 2017 | 2016 | ($) Change | 2017 | 2016 | ($) Change | ||||||
| Revenue | ||||||||||||
| Environmental Services | 2,016 | 2,004 | 12 | 5,621 | 4,594 | 1,027 | ||||||
| Heavy Construction | 113 | 91 | 22 | 188 | 222 | (34 | ) | |||||
| Corporate | – | 2 | (2 | ) | 14 | 18 | (4 | ) | ||||
| 2,129 | 2,097 | 32 | 5,823 | 4,834 | 989 | |||||||
| Direct operating expenses | ||||||||||||
| Environmental Services | 1,468 | 1,307 | 161 | 4,170 | 3,283 | 887 | ||||||
| Heavy Construction | 84 | 103 | (19 | ) | (29 | ) | 374 | (403 | ) | |||
| Corporate | – | – | – | 8 | 7 | 1 | ||||||
| 1,552 | 1,410 | 142 | 4,149 | 3,664 | 485 | |||||||
| General and administrative expenses | ||||||||||||
| Environmental Services | 129 | 172 | (43 | ) | 258 | 138 | 120 | |||||
| Heavy Construction | 2 | 47 | (45 | ) | 6 | 18 | (12 | ) | ||||
| Corporate | 246 | 303 | (57 | ) | 542 | 703 | (161 | ) | ||||
| 377 | 522 | (145 | ) | 806 | 859 | (53 | ) | |||||
| Operating earnings (loss) | ||||||||||||
| Environmental Services | 419 | 525 | (106 | ) | 1,193 | 1,173 | 20 | |||||
| Heavy Construction | 27 | (59 | ) | 86 | 211 | (170 | ) | 381 | ||||
| Corporate | (246 | ) | (303 | ) | 57 | (536 | ) | (692 | ) | 156 | ||
| 200 | 163 | 37 | 868 | 311 | 557 | |||||||
| Depreciation | 569 | 679 | (110 | ) | 1,122 | 1,364 | (242 | ) | ||||
| Finance costs | 246 | 321 | (75 | ) | 522 | 680 | (158 | ) | ||||
| Gain (loss) on disposal | (55 | ) | 63 | (118 | ) | (71 | ) | 63 | (134 | ) | ||
| Share-based recovery | (16 | ) | (10 | ) | (6 | ) | (32 | ) | (10 | ) | (22 | ) |
| Loss before tax | (544 | ) | (890 | ) | 346 | (673 | ) | (1,786 | ) | 1,113 | ||
| Income tax expense | – | – | – | – | – | – | ||||||
| Net loss | (544 | ) | (890 | ) | 346 | (673 | ) | (1,786 | ) | 1,113 | ||
SECOND QUARTER ENDED JUNE 30, 2017
For the six month period ended June 30, 2017, Cordy’s consolidated revenues increased by $1.0 million or 20 percent, from the comparative period in 2016. Cordy’s consolidated operating earnings increased by $0.6 million or 179 percent from the comparative period.
The Environmental Services saw an increase in revenue for the six months ended June 30, 2017, of $1.0 million, from the comparative period in 2016. The increase is due to Cordy Environmental’s first quarter of 2017 that saw a slight increase in capital spending from Environmental’s major oilfield customers. The second quarter saw demand for services remain consistent with prior year. Environmental’s operating earnings as a percentage of revenue decreased from 26% to 21% in 2017; this is due to a bad debt recovery of $0.15 million and a expense recovery of $0.1 million in 2016.
The Construction segment saw minimal changes in revenue for the six months ended June 30, 2017 compared to the six months ended June 30, 2016; this is due to the reduced demand for services and minimal activity year over year. Despite minimal activity Cordy saw an increase to operating earnings of $0.4 million from the comparative period in 2016. This is due to negotiation on outstanding payables, coupled with the consolidation of operations to the Environmental location eliminating almost all overhead.
Overall consolidated net loss for the six months ended June 30, 2017, has improved by $1.1 million or 62 percent from the comparative period in 2016. This improving bottom line is due to improving results, reduced interest rate and diminishing balance calculation of depreciation.
OUTLOOK
Cordy’s second quarter results were in line with expectation, as the Alberta economy, specifically the oil and gas industry continues to exhibit signs of recovery, Cordy continues to see increased levels of activity. The second quarter is historically slower due to spring breakup; Cordy’s results remained consistent with last year as much of the increased activity from the recovering economy will be seen in the second half of 2017.
For the remainder of 2017 Cordy anticipates results to continue to improve, with the current cost structure in place, any increase in revenue will have a positive impact on operating margin. Drilling activity in western Canada is expected to be stronger than last year; however winter drilling plans will continue to be influenced by future crude oil and natural gas pricing. Overall Cordy has completed the necessary work to manage through the slow recovery.
Cordy’s continued focus will be around reducing idle equipment through aggressive sales strategy, while seeking to acquire or merge with synergistic companies. Cordy is in continued discussion to renegotiate the various terms of the leases to reflect the current level of operations. Cordy remains optimistic that a mutually beneficial agreement that meets the Corporations needs while reducing debt will be reached in the third quarter. Cordy will be well positioned with a newer fleet of equipment, excellent safety statistics and a serviceable debt arrangement to take full advantage of opportunities in the foreseeable future.
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
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 expects or anticipates will or may occur in the future, are forward-looking statements. These include the Corporation’s future growth, results of operations, performance 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.
CONTACT: For general and investor relations information, please contact: Darrick Evong Chief Executive Officer [email protected] Tel: 403-262-7667 Fax: 403-237-6278