CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (TSX VENTURE:CKK) released today its fourth quarter and 2011 annual results.
The Corporation reported earnings from continuing operations of $3.7 million or $0.04 per share for the year ended December 31 2011, representing an increase of $6.7 million compared to a loss from continuing operations of $3.0 million in 2010. Earnings before interest, taxes, depreciation, amortization and impairment and stock-based compensation (”EBITDAS”) from continuing operations were $10.9 million for the year compared to $3.3 million in 2010, representing a year-over-year increase of $7.6 million. Revenue for the year increased $35.1 million to $94.2 million compared to $59.1 million in 2010.
For the fourth quarter ended December 31, 2011 Cordy reported earnings from continuing operations of $1.4 million or $0.02 per share, representing an increase of $1.9 million compared to a loss from continuing operations of $0.5 million in the fourth quarter of 2010. EBITDAS from continuing operations were $3.7 million for the quarter compared to $2.1 million in 2010, representing an increase of $1.6 million from the comparative period. Revenue for the quarter increased $11.7 million to $30.6 million compared to $18.9 million in the fourth quarter of 2010.
Cordy also announces plans to integrate its 11 business units and four business segments to achieve a unified brand for all its operations under the Cordy name. Cordy provides services to a variety of energy sectors including mining, heavy oil, conventional oil, oilsands, and liquids-rich natural gas. Each of its business units, where appropriate, will be rebranded under a single corporate brand. The organization will also integrate its operations at the segment level to achieve cost savings and allow the Corporation to market, sell and deliver its services more effectively. Beginning in the second quarter, Cordy intends to merge its Environmental Services business units to operate as Cordy Environmental. The remainder of its business segments will be integrated starting in the second half of the year.
Management is optimistic for 2012. At the start of 2011 Cordy indicated there was a renewed sense of optimism in the energy services sector that should allow for improved financial performance. Cordy’s financial results from continuing operations in 2011 validated that assertion and the Corporation outperformed management’s expectations for 2011, with the Corporation’s financial results from continuing operations for the year nearing pre-recession levels. Cordy’s willingness to discontinue a business that was no longer advancing the Corporation’s strategic plan and was delivering weak performance demonstrates management’s commitment to maintaining operational excellence, achieving stronger margins and creating value for shareholders.
Looking ahead to the remainder of 2012, while risks certainly remain in the global economy, the most prevalent regional risk in western Canada’s energy sector is the severely depressed price of natural gas, which was below $2 per gigajoule(1) in March 2012. Management believes the steps it has taken to expand its operational focus to the mining, conventional oil, heavy oil, liquids-rich gas and oil sands regions will mitigate this risk in 2012.
The Corporation’s number-one priority for 2012 is the safety of its employees. Providing a demonstrably safe work environment is a precursor to participating in many of today’s energy, construction and mining projects, particularly with larger, more discerning customers, as well as to attracting and retaining employees.
Management will also focus on expanding its heavy construction operations in the mining sector in southern B.C., its heavy oil focused operation around Cold Lake, Alberta, and its oil sands related operations in the Fort McMurray region. Commencement of the transition to becoming an integrated entity in the second quarter, as discussed above, is anticipated to gradually begin realizing cost savings, by delivering Cordy’s services more effectively.
With access to one of the newest fleets of heavy equipment in western Canada, Cordy will seek opportunities to exploit this advantage. The Corporation plans to replace the entire 2011 model year rental fleet with 2012 equipment, thanks to an innovative rental and exchange agreement with a major heavy equipment distributor, and also expects to increase the size of the fleet by potentially 150 pieces. Capital expenditures are budgeted at $16 million for 2012, mainly to add new heavy equipment for its mining operations as well as to expand the Environmental Services segment.
Management expects year-over-year growth in all of its business segments in 2012 and, in general, expects the organization to continue building on the performance achieved in 2011. In addition to revenue growth, management is focused on increasing earnings per share and generating sustainable earnings by growing the organization organically and through strategic acquisitions. In 2012, management believes it is now in a position to deliver the results originally envisioned for shareholders when Cordy was formed.
Complete copies of Cordy’s audited consolidated financial statements for the year ended December 31, 2011 and the associated Management’s Discussion and Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
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