Sign Up for FREE Daily Energy News
Copper Tip Energy Services
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy
Hazloc Heaters
WEC - Western Engineered Containment

Macro Enterprises Inc. Announces 2018 Fourth Quarter and Year End Results

FORT ST. JOHN, British Columbia, March 21, 2019 (GLOBE NEWSWIRE) —

  Summary of financial results
  (thousands of dollars except per share amounts)
  Three months ended December 31 Year ended December 31
  2018 2017 2018 2017
Revenues $ 137,595 $ 26,897 $ 191,060 $ 103,980
EBITDA1 22,318 416 21,705 2,872
Net income (loss) 14,054 (2,050 ) 8,965 (3,446 )
Net income (loss) per share $ 0.46 $ (0.07 ) $  0.30 $ (0.11 )
Weighted average common shares outstanding (thousands)           30,256   30,273

Note 1References to EBITDA are to net income from continuing operations before interest, taxes, amortization and impairment charge. EBITDA is not an earnings measure recognized by International Financial Reporting Standards (“IFRS”) and does not have a standardized meaning prescribed by IFRS. Management believes that EBITDA is an appropriate measure in evaluating the Company’s performance. Readers are cautioned that EBITDA should not be construed as an alternative to net income (as determined under IFRS) as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) as a measure of liquidity and cash flow. The Company’s method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Company’s EBITDA may not be comparable to similar measures used by other issuers.


  • The Company continues to materially exceed industry standard safety averages.  As at December 31, 2018, Macro Enterprises has now exceeded 22 quarters and 4.2 million man hours worked without a single lost time injury. The Company generated $39.2 million in positive cash flow from operations for the year compared to $4.6 million for the prior year.  The Company recorded EBITDA of $21.7 million based on improved margins and strong 4th quarter results.
  • Total working capital as at December 31, 2018 was $50.1 million of which the Company’s cash position net of debt was $50.5 million.  The Company continues to remain unleveraged and undrawn on its credit facilities.
  • The normal course issuer bid was renewed for another 12 months in December 2018.
  • The Company expects revenue to exceed $300.0 million in fiscal 2019.
  • The Company is reporting shareholders’ equity of $88.5 million or $2.92 per share based on the weighted average common shares outstanding as at December 31, 2018.

Fourth quarter results

Three months ended December 31, 2018 vs. three months ended December 31, 2017

Consolidated revenue was $137.6 million compared to $27.7 million in the fourth quarter last year representing an increase of $110.7 million or 511%. The material increase in revenues during the quarter was anticipated as a result of a number of projects proceeding during the quarter.  Approximately 84% or $127.1 million of the revenue earned related to pipeline and facilities construction with the balance or $10.4 million relating to maintenance and integrity services being performed under existing master service agreements.  Revenue recognized for the quarter ended December 31, 2018 included revenue from its joint operations on the Coastal GasLink Pipeline project or the Trans Mountain Expansion project, although the revenues were not substantial.  Prior year revenue relating to pipeline and facilities construction projects was approximately 42% or $11.4 million while the balance related to maintenance and integrity work.

Operating expenses were $111.8 million or 81% of revenue compared to $24.6 million or 85% of revenue in the fourth quarter last year.  As a result of increased activity during the quarter the Company was able to realize economies of scale and recovery on many shared services being provided to the on-going projects.  All aspects of operations will continue to be monitored and streamlined to ensure efficiencies and savings are achieved while maintaining the highest degree of health, safety and environmental standards possible.  Equipment maintenance costs are expected to increase slightly in fiscal 2019 and impact future margins accordingly.

General and administrative expenses were $2.4 million, up $0.2 million from the $2.2 million recorded prior year.  The increase was to be expected and was a result of additional spending commensurate with the start-up of its larger projects and various other expenditures relating to its joint operations.  Included in the Company’s general and administrative expenditures are professional fees, corporate wages, burdens and other overheads, including rents, insurance, travel and administrative supplies that are not charged directly to projects.

Depreciation of property, plant and equipment was $2.3 million and significantly higher than in the previous years.  The increase in depreciation directly correlated to the $23.3 million in new capital assets acquired and deployed during the latter part of the year.  Depreciation is calculated at various declining balance methods across the Company’s multiple categories of property, plant and equipment and is used in guiding the annual capital expenditure estimates.  Residual values, methods of amortization and useful lives of the assets are reviewed annually and adjusted if appropriate.

During the fourth quarter the Company recognized a non-cash loss of $104,000 on the mark-to-market fair value re-measurement of its preferred shares at period end.  The loss adjustment is indicative of an increased weighted average share price with a corresponding increase to the Company’s net book value.

During the fourth quarter the Company recognized non-cash stock-based compensation charges of $966,000.  The Company anticipates recognizing an additional $1.6 million in stock-based compensation charges amortized over the next 7 quarters.  The non-cash stock-based compensation charge relates to options granted in December.

Finance costs of $418,000 were substantially higher than prior year due to the Company entering into an Amended and Restated Credit Agreement with members of its existing banking syndicate during the third quarter along with incurring deferred finance costs on the issuance of $76 million in letters of credit relating to its substantial pipeline construction contracts and a new facilities construction job set to commence in 2019.  In addition to the non-cash deferred transaction costs, interest charges, standby and admin fees associated with the new credit facility, other finance costs included $42,000 of effective interest rate payments made on its preferred shares.

Income tax expense in the quarter of $5.6 million was at an effective rate of 28.4% which approaches the enacted tax rates of 27% after reversing non-cash charges and timing differences.

Net income was $14.1 million ($0.46 per share) compared to a net loss of $2.1 million (($0.07) per share) recognized during the three months ended December 31, 2017. The net income was a result of a number of major projects under construction, an increase to core business activities combined with significantly improved operating margins realized during the quarter.  Also impacting net income were other non-cash charges including a mark-to-market adjustment on its preferred shares and stock-based compensation.


The Company expects significant activity levels to continue in 2019 and beyond as a result of its joint venture activity with Spiecapag Canada Corp. and the Company’s focus on its blue chip pipeline owners and operators with their construction and maintenance programs across Canada.

In May 2018, the Federal Government of Canada announced it would be acquiring the Trans Mountain Expansion Project with commitments to see construction recommence in due course.  The Company and its 50% joint venture partner are in contact with the key stakeholders of the Trans Mountain Expansion project and continues to await its notice to proceed with Spread 5B, that was awarded in 2017 and consists of approximately 85 kilometers of 36 inch pipeline along the Coquihalla-Hope corridor in British Columbia.  Construction is expected to last two years, with field construction to commence once the regulatory requirements for construction of the project have been satisfied.  The reimbursable type contract will be phased and has an initial estimated contract value of approximately CAD$375 million.  Preliminary scoping, planning and scheduling continues however the exact timing on this project at this stage is still not yet determinable.

In June 2018, the Company announced that its joint venture with Spiecapag Canada Corp. entered into a construction contract with Coastal GasLink Pipeline Limited Partnership for pipeline construction services on the Coastal GasLink Pipeline Project that consists of approximately 166 kilometers of a 48 inch pipeline.  The initial estimated contract value is in excess of CAD$900 million with a Joint Venture split of 40/60 between Macro and Spiecapag.  In general, the civil work will be performed under a reimbursable type contract model while the mechanical scope will be performed under unit rates.  Construction has now commenced and the current in-service date of for Coastal GasLink pipeline is scheduled for Q4 2021.

In August 2018, the Company commenced construction of the Aitken Creek Section – Spread 2 of the North Montney Mainline Project that consists of approximately 67 km of NPS 42-inch pipeline and related facilities.  With accepted change orders to date, the contract, with NOVA Gas Transmission Ltd. (‘NGTL’), a subsidiary of TransCanada Pipelines Limited, is now valued in excess of CAD$220.0 million. (Original – CAD$200.0 million) The contract is a unit rate type contract with upfront milestone payments to fund initial working capital requirements.  Substantial completion is planned for Q1 2019.

In September 2018, the Company announced that it had been awarded a construction contract for the Groundbirch Compressor Station, a two-unit greenfield compressor station located near Dawson Creek, B.C., that is part of NGTL’s North Montney Mainline Project.  Work continues on the lump-sum contract which has an initial contract value in excess of CAD$37 million and has a substantial completion date planned in Q3 2019.

The Company remains very active bidding and estimating costs on projects for its larger clients and anticipates a general increase in both construction and core maintenance work in 2019.  With the planned increased activity level, the remaining construction on North Montney Mainline pipeline project and Groundbirch Compressor Station, along with construction proceeding on the Coastal GasLink pipeline project, the Company’s revenue forecast for 2019 exceeds CAD $300 million.  Margins may decrease with increased maintenance and other costs planned for 2019.  The Company may invest up to an additional $30 million in new capital expenditures for the year.  The forecast revenue for 2019 does not contain any provisions for the Trans Mountain Expansion project.

Macro’s core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta.  The Company’s corporate office is in Fort St. John, British Columbia.  Its shares are listed on the TSX Venture Exchange under the symbol MCR.  Information on the Company’s principal operations can be found at

Forward Looking Statements

Certain statements in this news release may include forward-looking information that involves various risks and uncertainties.  These may include, without limitation, statements regarding expected revenues, expenses and industry trends and the pursuit of strategic acquisitions.  These risks and uncertainties include, but are not restricted to, global economic conditions, government regulation of energy and resource companies, seasonal weather patterns, maintaining and increasing market share, terrorist activity, the price and availability of alternative fuels, the availability of pipeline capacity, and potential instability or armed conflict in oil producing regions.  These risks and uncertainties may cause actual results to differ from information contained herein.  There can be no assurance that such forward-looking statements will prove to be accurate.  Actual results and future events could differ materially from those anticipated in such statements.  These statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice.  Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.

For further information please contact:
Frank Miles
President and C.E.O.
Phone:  (250) 785-0033
Jeff Redmond
(250) 785-0033

Share This:

More News Articles

New SHOWCASE Directory Companies


Millennium Directional
Kicker Video
U of C Executive Education
Alliance Borealis Canada Corp.
John Brooks
DRYAIR Manufacturing Corp.
Stress Engineering
RAE Engineering