Cordy Oilfield Services Inc. Reports Third Quarter 2019 Results
November 19 2019 - 6:59PM
CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (CKK:
TSX-V) released today its third quarter 2019 results.
|
Three months ended September 30, |
Nine months ended September 30, |
($ 000’s) |
2019 |
|
2018 |
|
($) Change |
2019 |
|
2018 |
|
($) Change |
Revenue |
|
|
|
|
|
|
Environmental Services |
3,881 |
|
3,829 |
|
52 |
|
12,385 |
|
12,015 |
|
370 |
|
Heavy Construction |
122 |
|
94 |
|
28 |
|
414 |
|
337 |
|
77 |
|
Corporate |
- |
|
2 |
|
(2 |
) |
5 |
|
16 |
|
(11 |
) |
|
4,003 |
|
3,925 |
|
78 |
|
12,804 |
|
12,368 |
|
436 |
|
Direct operating expenses |
|
|
|
|
|
|
Environmental Services |
2,855 |
|
2,861 |
|
(6 |
) |
9,331 |
|
9,375 |
|
(44 |
) |
Heavy Construction |
80 |
|
90 |
|
(10 |
) |
231 |
|
240 |
|
(9 |
) |
Corporate |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
2,935 |
|
2,951 |
|
(16 |
) |
9,562 |
|
9,615 |
|
(53 |
) |
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
Environmental Services |
285 |
|
100 |
|
185 |
|
587 |
|
577 |
|
10 |
|
Heavy Construction |
- |
|
1 |
|
(1 |
) |
2 |
|
2 |
|
- |
|
Corporate |
233 |
|
265 |
|
(32 |
) |
724 |
|
692 |
|
32 |
|
|
518 |
|
366 |
|
152 |
|
1,313 |
|
1,271 |
|
42 |
|
Operating earnings (loss) |
|
|
|
|
|
|
Environmental Services |
741 |
|
868 |
|
(127 |
) |
2,467 |
|
2,063 |
|
404 |
|
Heavy Construction |
42 |
|
3 |
|
39 |
|
181 |
|
95 |
|
86 |
|
Corporate |
(233 |
) |
(263 |
) |
30 |
|
(719 |
) |
(676 |
) |
(43 |
) |
|
550 |
|
608 |
|
(58 |
) |
1,929 |
|
1,482 |
|
447 |
|
|
|
|
|
|
|
|
Depreciation |
477 |
|
485 |
|
(8 |
) |
1,469 |
|
1,430 |
|
39 |
|
Finance costs |
198 |
|
187 |
|
11 |
|
598 |
|
471 |
|
127 |
|
Gain (loss) on disposal |
(86 |
) |
56 |
|
(142 |
) |
(483 |
) |
(128 |
) |
(355 |
) |
Loss before tax |
(39 |
) |
(120 |
) |
81 |
|
345 |
|
(291 |
) |
636 |
|
Income tax expense |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Near earnings (loss) |
(39 |
) |
(120 |
) |
81 |
|
345 |
|
(291 |
) |
636 |
|
|
|
|
|
|
|
|
THIRD QUARTER ENDED SEPTEMBER 30,
2019For the nine month period ended September 30, 2019,
Cordy's consolidated revenues increased by $0.4 million or 3
percent, from the comparative period in 2018. Cordy’s consolidated
operating earnings increased $0.4 million or 30 percent from the
comparative period. Cordy’s net earnings was $0.3 million for the
nine months ended September 30, 2019, as compared to a net loss of
$0.3 million for the nine months ended September 30, 2018,
representing a 219 percent increase over prior year.
The Environmental Services saw marginally
increased revenue for the nine months ended September 30, 2019, of
$0.4 million, from the comparative period in 2018. Cordy saw
increased revenue in each quarter: In the first and third quarter
Cordy’s sales efforts and competitive pricing allowed Cordy to gain
market share over competitors, specifically oilfield customers;
Cordy’s second quarter increases can be attributed to Cordy’s
diversification strategy, this has resulted in new customers and
increased demand for municipal services. Environmental Services’
operating earnings increased to $2.5 million from $2.1 million in
2018, as a percentage of revenue operating earnings was 20 percent
in 2019 as compared to 17 percent in 2018.
The Construction segment saw minimal changes in
revenue for the nine months ended September 30, 2019 compared to
the nine months ended September 30, 2018; this is due to the
reduced demand for services and minimal activity year over year.
Construction’s operating earnings increased to $0.2 million from
$0.1 million in 2018, as a percentage of revenue operating earnings
was 43 percent in 2019 as compared to 28 percent in 2018.
OUTLOOKCordy continues to experience improved
results as compared to the previous year. Cordy continues to
benefit from its diversification focus by growing the municipal and
industrial side of the business, coupled with an increase in
oilfield market share, has had a positive impact on the business.
Although pricing levels have remained competitive, Cordy’s
continued focus on selling, and the benefits associated with its
acquisition of Hornet Hydrovac (“Hornet”), continue to yield
results.
For the balance of 2019, the trend Cordy has
experienced for the first nine months will remain constant. Cordy
will continue to surpass 2018 numbers, revenue is anticipated to
surpass last year results, while Cordy’s cost structure will remain
in place to ensure margins stay consistent with the previous nine
months. Current trends in the oil and gas sector cause alarm,
however Cordy anticipates a strong winter drilling season as
strides continue to be made on the customer front, although demand
for services has been static, Cordy continues to outperform
competitors and gain existing market share. Year to date Cordy has
disposed of underutilized equipment for proceeds of $1.3 million,
resulting in a gain on sale of $0.5 million. Cordy will continue to
re-evaluate its equipment mix to ensure capital is being allocated
for the highest return. Cordy believes it has positioned itself
through its diversified customer base, debt structure, service
offerings and lean cost base to see continued growth in the
municipal, industrial and oilfield market for the foreseeable
future.
While remaining focused on operational and
financial performance, Cordy will continue to seek out acquisitions
and or consolidation opportunities that complement its
diversification strategy and provide platforms for organic growth.
Cordy is actively reviewing numerous opportunities, however Cordy
will remain committed to ensuring any acquisition meets our
strategic initiatives and financial thresholds. Cordy will continue
to consider multiple avenues to reach strategic objectives and
provide shareholder value.
For general and investor relations information,
please contact:
Darrick
Evong
Chief Executive
Officer
IR@cordy.ca
Tel: 403-262-7667 Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the 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.
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