(MENAFN- GlobeNewsWire - Nasdaq) CALGARY, Alberta, Nov. 18, 2021 (GLOBE NEWSWIRE) -- CORDY OILFIELD SERVICES INC. (the“Corporation” or“Cordy”) (CKK: TSX-V) released its third quarter results.
ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS
| | Three months ended September 30, | Nine months ended September 30, |
| ($ 000's) | 2021 | | 2020 | | ($) Change | | 2021 | | 2020 | | ($) Change | |
| Revenue | | | | | | |
| Environmental Services | 7,655 | | 3,024 | | 4,631 | | 20,113 | | 12,557 | | 7,556 | |
| Heavy Construction | 159 | | 60 | | 99 | | 303 | | 272 | | 31 | |
| Corporate | - | | - | | - | | - | | 15 | | (15 | ) |
| | 7,814 | | 3,084 | | 4,730 | | 20,416 | | 12,844 | | 7,572 | |
| Direct operating expenses | | | | | | |
| Environmental Services | 5,224 | | 2,029 | | 3,195 | | 14,199 | | 9,146 | | 5,053 | |
| Heavy Construction | 66 | | 20 | | 46 | | 166 | | 118 | | 48 | |
| Corporate | - | | - | | - | | - | | - | | - | |
| | 5,290 | | 2,049 | | 3,241 | | 14,365 | | 9,264 | | 5,101 | |
| | | | | | | |
| General and administrative expenses | | | | | | |
| Environmental Services | 294 | | 269 | | 25 | | 901 | | 511 | | 390 | |
| Heavy Construction | 8 | | - | | 8 | | 9 | | 2 | | 7 | |
| Corporate | 226 | | 206 | | 20 | | 792 | | 628 | | 164 | |
| | 528 | | 475 | | 53 | | 1,702 | | 1,141 | | 561 | |
| Operating earnings | | | | | | |
| Environmental Services | 2,137 | | 726 | | 1,411 | | 5,013 | | 2,900 | | 2,113 | |
| Heavy Construction | 85 | | 40 | | 45 | | 128 | | 152 | | (24 | ) |
| Corporate | (226 | ) | (206 | ) | (20 | ) | (792 | ) | (613 | ) | (179 | ) |
| | 1,996 | | 560 | | 1,436 | | 4,349 | | 2,439 | | 1,910 | |
| | | | | | | |
| Depreciation | 697 | | 625 | | 72 | | 1,929 | | 1,742 | | 187 | |
| Finance costs | 253 | | 261 | | (8 | ) | 903 | | 727 | | 176 | |
| Gain (loss) on disposal | (90 | ) | - | | (90 | ) | (90 | ) | - | | (90 | ) |
| Other income | (10 | ) | - | | (10 | ) | (10 | ) | - | | (10 | ) |
| Earnings (loss) before tax | 1,146 | | (326 | ) | 1,472 | | 1,617 | | (31 | ) | 1,648 | |
| Income tax expense | - | | - | | - | | - | | - | | - | |
| Net earnings (loss) | 1,146 | | (326 | ) | 1,472 | | 1,617 | | (31 | ) | 1,648 | |
| | | | | | | | | | | | | |
OVERALL PERFORMANCE
The third quarter was Cordy's strongest quarter since realigning the business in 2015 and was a significant contributor to the Company's strongest first nine months over the same period. The strong results continued from the second quarter of 2021, and were a result of the same drivers: increased activity in the oil and gas sector, revenue generated from the Platinum North Resources Ltd. acquisition and Cordy's JV partnership completed in 2020.
Compared to Q3-2020 where the company was faced with some of its toughest challenges to date, most notably, the global spread of the COVID-19 (“COVID-19”) pandemic, the third quarter of 2021 saw an increase in activity levels due to a successful COVID-19 vaccine rollout and the lifting of government restrictions. The reopening of the economies around the globe has resulted in a return of oil and gas pricing to economical levels, and general business activity has started to rebound as businesses and customers adapt to the new rules of doing business in the COVID-19 era.
Third Quarter Financial Summary:
- Revenue for the three and nine months ended September 30, 2021 up 153% for the quarter and 59% for the year:
- revenue of $7.8 million for the quarter, an increase of $4.7 million, or 153% compared to $3.1 million in 2020;
- revenue of $20.4 million year-to-date, an increase of $7.6 million, or 59% compared to $12.8 million in 2020.
- Operating earnings for the three and nine months ended September 30, 2021 up 256% on the quarter and up 78% for the year:
- operating earnings of $2.0 million for the quarter, a $1.4 million increase compared to $0.6 million in 2020;
- operating earnings of $4.3 million year-to-date, an increase of $1.9 million, or 78% compared to $2.4 million in 2020.
- Net earnings for the three and nine months ended September 30, 2021 of $1.1 million and $1.6 million, respectively:
- net earnings of $1.1 million for the quarter, an increase of $1.5 million, compared to a net loss of $0.3 million in 2020;
- net earnings of $1.6 million year-to-date, an increase of $1.6 million, compared to net loss of $0.03 million in 2020.
The Canadian Emergency Wages Subsidy (“CEWS”) for the three and nine months ended September 30, 2021 were $0.2 million and $1.3 million respectively where
- $0.2 million was recognized as reduction to Direct Operation Expenses (“DOE”) for the quarter and $1.1 million was recognized as a reduction to DOE for the year; and
- $0.02 million was recognized as reduction to general and administrative (“G&A”) expenses for the quarter and $0.2 million was recognized as a reduction to G&A for the year.
The Canadian Emergency Rent Subsidy (“CERS”) for the nine months ended September 30, 2021 was $0.2 million, recognized as a reduction to DOE.
CORPORATE OUTLOOK
Cordy management is very optimistic on the near-term outlook for the Company, as it will benefit from the continued lifting of health restrictions and the positive outlook for drilling activity resulting from higher oil prices. Specifically, as global economies have re-opened, commodity prices have rebounded from the severe lows experienced during the height of the shut down, and the oilfield industry in Western Canada is poised to see an increase in drilling activity.
As we progress through the fourth quarter, we anticipate our quarterly results to be in line with those in the prior year, and annual results improving materially on a year over year basis, with existing projects continuing to progress, and the Company realizing full benefits from the acquisition completed in Q1 2020.
Visibility into 2022 and beyond is still highly variable, but the Company is optimistic as its oil and gas customers forecast an increase in spending for the balance of 2021 and 2022 winter drilling season.
For the balance of 2021, and the foreseeable future, Cordy will continue to aggressively manage costs, while continuing to focus on the health and safety of its employees, contractors, and customers, ensuring it is doing its part in mitigating the spread, and limiting the impact of COVID-19.
For general and investor relations information, please contact:
Investor Relations
Darrick Evong
Chief Executive Officer
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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