CALGARY, Alberta, Aug. 27, 2020 (GLOBE NEWSWIRE) —
CORDY OILFIELD SERVICES INC. (the “Corporation” or “Cordy”) (CKK: TSX-V) released today its second quarter 2020 results.Second Quarter Financial Summary:
Revenue for the three and six months ended June 30th, 2020 down 42 percent for the quarter but still up 11% for the year;
— total revenue of $2.1 million for the quarter, a decrease of $1.5 million, or 42 percent compared to $3.6 million in 2019;
— total revenue of $9.8 million for the first half, an increase of $1.0 million, or 11 percent compared to $8.8 million in 2019;Operating earnings for the three and six months ended June 30, 2020 no change on the quarter and up 36% for the year;
— total operating earnings of $0.4 million for the quarter, no change compared to $0.4 million in 2019;
— total operating earnings of $1.9 million for the first half, an increase of $0.5 million, or 36% compared to $1.4 million in 2019;Net (loss) earnings for the three and six months ended June 30, 2020 down on the quarter and down 23 percent on for the year;
— net loss of ($0.6) million for the quarter, a decrease of $0.7 million, compared to net earnings of $0.1 million in 2019
— net earnings of $0.3 million for the first half, a decrease of $0.1 million, or 23% compared to $0.4 million in 2019Received $0.5 million from Canadian Emergency Wages Subsidy (“CEWS”) during the quarter;
— $0.4 million recognized as reduction to Direct Operation Expenses (“DOE”)
— $0.1 million recognized as a reduction to general and administrative (“G&A”) expenseFinancial Position / Liquidity:consolidated and revised the terms of its equipment leases reducing its current portion of lease liability by $0.2 million;increased the borrowing amount under its credit facility from 50% up to an amount totalling 90% of eligible receivables, improving the Corporations short-term liquidity.generated $3.0 million of funds from operations during the quarter..OVERALL PERFORMANCEThe second quarter of 2020 will not soon be forgotten, as it presented the business with some of its toughest challenges to date. Most notably, the global spread of COVID-19 created unprecedented uncertainty and volatility in the oil and gas industry, particularly in the Western Canadian Sedimentary Basin. The demand for oil significantly deteriorated, as non-essential business around the globe, came to a grinding halt, and swiftly drove pricing into uneconomical territory, impacting the capital programs that drive a significant portion of Cordy’s business. Compounding the crisis, the Company had to quickly redesign its day to day business model, implementing new health and safety protocols, to mitigate the risk of contracting or spreading COVID-19 for our people, our customers, and their families.Despite the challenges, Cordy was able to manage through, what it believes was, the toughest stretch of 2020. 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 slowly rebound as businesses and customers, adapt to the new rules of doing business in the COVID-19 era.OUTLOOKIn terms of Cordy’s business, the worst of the economic impact of COVID-19 appears to have passed. Specifically, as global economies have re-opened, commodity prices have rebounded from the severe lows experienced during the height of the shut down, and there is some optimism that the oilfield industry in western Canada will gradually increase activity in the new year. While this still presents challenges for the Company, there appears to be some light at the end of the tunnel.In Alberta, as government imposed business and social restrictions were lifted, general business activity, in the municipal and industrial spaces, began to slowly improve. The Company’s municipal and industrial customers went back to work and demand for our services is gradually increasing. Despite the risks still associated with the pandemic, Cordy is hopefully that the current trend will continue.During the balance of the 2020 the company anticipates business continuing to be a challenge, particularly on the energy services side of the business, which generated approximately 40% of the Company’s revenue in the second half of 2019. Although there is optimism for the new year, activity will remain depressed for the balance of 2020.Despite the negative outlook on the drilling front for the second half of 2020, Cordy’s diversification focus, growing both the industrial and municipal service side of the business, continues to provide the company with opportunity. As part of its post COVID-19 recovery plan to stimulate the economy, the Alberta government has announced $10 billion in infrastructure stimulus packages, which the Premier has called the ‘largest infrastructure build in provincial history”. The announced infrastructure projects will require the types of support services Cordy provides.In the near term, the Company continues to be reliant on government support payments to fund its operations. The Company is uncertain about the extent these programs will be available in the future, or whether the opportunities available to the company will materialize before the dissolution of these programs.For the balance of 2020, 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 of COVID-19.For general and investor relations information, please contact:Darrick Evong
Chief Executive Officer
[email protected]
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 ADVISORYThis 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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