Cordy Oilfield Services Inc. Reports Fourth Quarter and 2019 Annual Results
CALGARY, Alberta, April 16, 2020 (GLOBE NEWSWIRE) -- 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.
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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.
