CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (CKK:
TSX-V) released today its fourth quarter and 2019 annual results.
|
Three months ended December 31 |
|
Twelve months ended December 31 |
($ 000's) |
2019 |
|
2018 |
|
($) Change |
|
|
2019 |
|
2018 |
|
($) Change |
|
Revenue |
|
|
|
|
|
|
|
Environmental Services |
3,450 |
|
3,322 |
|
128 |
|
|
15,834 |
|
15,337 |
|
497 |
|
Heavy
Construction |
102 |
|
102 |
|
- |
|
|
516 |
|
439 |
|
77 |
|
Corporate |
- |
|
14 |
|
(14 |
) |
|
5 |
|
30 |
|
(25 |
) |
|
3,552 |
|
3,438 |
|
114 |
|
|
16,355 |
|
15,806 |
|
549 |
|
Direct operating expenses |
|
|
|
|
|
|
|
Environmental Services |
3,231 |
|
2,846 |
|
385 |
|
|
12,561 |
|
12,221 |
|
340 |
|
Heavy
Construction |
66 |
|
87 |
|
(21 |
) |
|
297 |
|
327 |
|
(30 |
) |
Corporate |
- |
|
- |
|
- |
|
|
- |
|
- |
|
- |
|
|
3,297 |
|
2,933 |
|
364 |
|
|
12,858 |
|
12,548 |
|
310 |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
|
Environmental Services |
169 |
|
183 |
|
(14 |
) |
|
756 |
|
760 |
|
(4 |
) |
Heavy
Construction |
- |
|
1 |
|
(1 |
) |
|
2 |
|
2 |
|
- |
|
Corporate |
197 |
|
260 |
|
(63 |
) |
|
921 |
|
953 |
|
(32 |
) |
|
366 |
|
444 |
|
(78 |
) |
|
1,679 |
|
1,715 |
|
(36 |
) |
Operating earnings (loss)
(1) |
|
|
|
|
|
|
|
Environmental Services |
50 |
|
293 |
|
(243 |
) |
|
2,517 |
|
2,356 |
|
161 |
|
Heavy
Construction |
36 |
|
14 |
|
22 |
|
|
217 |
|
110 |
|
107 |
|
Corporate |
(197 |
) |
(246 |
) |
49 |
|
|
(916 |
) |
(923 |
) |
7 |
|
|
(111 |
) |
61 |
|
(172 |
) |
|
1,818 |
|
1,543 |
|
275 |
|
|
|
|
|
|
|
|
|
Depreciation |
501 |
|
471 |
|
30 |
|
|
1,970 |
|
1,900 |
|
70 |
|
Financing
expense |
206 |
|
181 |
|
25 |
|
|
803 |
|
652 |
|
151 |
|
Gain on
disposal |
- |
|
(300 |
) |
300 |
|
|
(483 |
) |
(428 |
) |
(55 |
) |
Loss before tax |
(818 |
) |
(291 |
) |
(527 |
) |
|
(472 |
) |
(581 |
) |
109 |
|
Income tax
expense |
- |
|
- |
|
- |
|
|
- |
|
- |
|
- |
|
Net loss |
(818 |
) |
(291 |
) |
(527 |
) |
|
(472 |
) |
(581 |
) |
109 |
|
|
YEAR ENDED DECEMBER 31, 2019
Despite continued market challenges throughout
2019, Cordy's consolidated revenues increased by $0.5 million or 3
percent, from the comparative period in 2018 and operating earnings
increased $0.3 million or 18 percent from the comparative period.
The net result was a consolidate operating margin of 11.1% compared
to 9.7% in 2018.
Cordy experienced increase revenue in each
quarter: In the first, third and fourth quarter, Cordy’s sales
efforts and competitive pricing allowed Cordy to gain market share,
specifically oilfield customers; Cordy’s second quarter increases
can be attributed to Cordy’s diversification strategy, which has
resulted in new customers and increased demand for municipal
services.
Overall, Cordy continued to show its resilience
in 2019, improving on revenue and operating margin, despite a tough
year in the oilfield industry in western Canada.
Specifically, oilfield service companies were challenged by a lack
of demand for services and competitive pricing, in an environment
where drilling activity was down approximately 30%.
CORPORATE OUTLOOK
Until recently, Cordy was optimistic that 2020
was going to be a positive year, the stabilization of oil prices
and the gradual approval of pipeline projects was poised to lead to
additional growth in 2020. Now, with the global economy virtually
shutdown, as the world population attempts to manage the pandemic,
COVID 19, the year 2020 will likely end up being the worst economic
disaster on record, next to the great depression. No one can
forecast how long the shutdown from COVID 19 will last or predict
the severity of damage it will have on economies around the
globe.
At home, in western Canada – an economy that was
already on life support – Cordy’s business, an essential service,
will continue to focus on mitigating risk for its people and
prioritizing the survival of the company.
First, and most importantly, for its employees,
Cordy has implemented safety protocols that align with the much
emphasised “social distancing” strategy governments are using to
“flatten the curve”. Where practical, Cordy has implemented a work
from home policy, enforces no large gatherings, and uses technology
to facilitate paperless transfer of tickets, and other required
documentation, throughout the organization and with its external
stakeholders, minimizing risk of exposure to the virus.
In order to mitigate the financial impact to
Cordy, the company is pursuing, and where appropriate, taking
advantage of, announced government programs for small and medium
enterprises, as well as the recently introduced Canada Emergency
Wage Subsidy, which forms part of the COVID-19 Emergency Response
Act. Furthermore, the company is working with various suppliers and
landlords for additional financial relief through these
unprecedented times.
For general and investor relations information,
please contact:
Investor RelationsDarrick EvongChief 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 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.
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