CALGARY, ALBERTA–(Marketwired – May 25, 2017) – CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (TSX VENTURE:CKK) released today its first quarter 2017 results.
| Three months ended March 31, | ||||||
| ($ 000’s) | 2017 | 2016 | ($) Change | |||
| Revenue | ||||||
| Environmental Services | 3,607 | 2,590 | 1,017 | |||
| Heavy Construction | 74 | 130 | (56 | ) | ||
| Corporate | 13 | 17 | (4 | ) | ||
| 3,694 | 2,737 | 957 | ||||
| Direct operating expenses | ||||||
| Environmental Services | 2,701 | 1,976 | 725 | |||
| Heavy Construction | (113 | ) | 270 | (383 | ) | |
| Corporate | 8 | 7 | 1 | |||
| 2,596 | 2,253 | 343 | ||||
| General and administrative expenses | ||||||
| Environmental Services | 132 | (35 | ) | 167 | ||
| Heavy Construction | 3 | (28 | ) | 31 | ||
| Corporate | 294 | 400 | (106 | ) | ||
| 429 | 337 | 92 | ||||
| Operating earnings | ||||||
| Environmental Services | 774 | 649 | 125 | |||
| Heavy Construction | 184 | (112 | ) | 296 | ||
| Corporate | (289 | ) | (390 | ) | 101 | |
| 669 | 147 | 522 | ||||
| Depreciation | 553 | 685 | (132 | ) | ||
| Finance costs | 276 | 358 | (82 | ) | ||
| Gain on disposal | (17 | ) | – | (17 | ) | |
| Share based recovery | (16 | ) | – | (16 | ) | |
| Loss before tax | (127 | ) | (896 | ) | 769 | |
FIRST QUARTER ENDED MARCH 31, 2017
For the three month period ended March 31, 2017, Cordy’s consolidated revenues increased by $1.0 million or 35 percent, from the comparative period in 2016. Cordy’s consolidated operating earnings increased $0.5 million or 355 percent from the comparative period.
The Environmental Services segment saw an increase in revenue for the three month period ended March 31, 2017, of $1.0 million, from the comparative period in 2016. The gradual recovery of commodity prices has resulted in increased capital spending of Environmental’s oilfield customers, which in turn has resulted in increased demand for services. As a percentage of revenue, operating earnings was 21 percent in 2017 as compared to a 19 percent in 2016. The 2016 percentage has been normalized for a bad debt recovery of $0.15 million for comparative purposes.
Cordy has finally completed its restructuring and has put focused effort on increasing revenues while maintaining the cost structure that saw margins gradually improve over the previous years. This is evidenced by continued improvement of margins coupled with revenue growth in Q1.
OUTLOOK
Cordy’s results for the current quarter were consistent with our expectations and aligned with prior commentary surrounding optimism and increased activity in the oil and gas sector. In the quarter Cordy benefited directly from increased drilling by our major customers and seized market share where competitors have fallen off. Despite increased drilling activity, pricing pressures coupled with increased fuel costs continue to challenge already thin margins.
Cordy anticipates challenging market conditions and lack of pricing power to be a hurdle in 2017, despite these challenges we are optimistic that 2017 will continue to improve over 2016. The slow recovery in the price of crude oil and natural gas will support increased capital investments from our major oilfield customers, which will in turn, increases demand from our municipal and industrial customers. Cordy expects activity levels in 2017 to outpace that of 2016, which is currently supported by the increase in year over year rig count and improved activity levels from our major customers.
Cordy’s continued focus will be around reducing idle equipment through aggressive sales strategy, while seeking to acquire or merge with a synergistic company. Cordy’s current size makes it difficult to support the infrastructure required for a public re- porting entity, as such, Cordy will need to continue to seek acquisitions and aggressive expansion to share the cost of being a publicly traded company.
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.
please contact:
Darrick Evong
Chief Executive Officer
403-237-6278 (FAX)
403-262-7667
Darrick.Evong@cordy.ca