Cordy Oilfield Services Inc. Reports Third Quarter 2019 Results
CALGARY, Alberta, Nov. 19, 2019 (GLOBE NEWSWIRE) -- 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, 2019 For 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.
OUTLOOK Cordy 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.
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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.
