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Cordy Oilfield Services Inc. Reports Fourth Quarter and 2019 Annual Results


Cordy.jpg
Source: Cordy Oilfield Services Inc.

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.

For general and investor relations information, please contact:

Investor Relations
Darrick Evong
Chief Executive Officer
IR@cordy.ca
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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