EDMONTON, Sept. 30, 2013 /CNW/ - John Babic, President and CEO of Dalmac Energy Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce fiscal 2014 first quarter financial results for the three months ended July 31, 2013.
The first quarter of this year was fairly representative of the historical trends normally associated with the quarter and while the Company managed to buck the trend somewhat last year, poor weather this year delayed much of the work originally scheduled for Q1. In addition to drilling delays, many of the roadways to existing customer sites were also deemed un-passable due to the inclement weather. As a direct consequence of the aforementioned, revenues for Q1'14 suffered a decrease of 7% or $532K to close out at $7.6M as compared to $8.1M in the previous year. In conjunction with increased staffing levels and higher operating costs, gross margin for the quarter dipped to 18% compared to 27% for Q1'13. EBITDAS followed suit and declined 98% to $19K from the $1.0M in Q1'13. Dalmac posted a net loss of $701K or ($0.03) per share in Q1'14 as compared to net income of $238K or $0.01 per share during the comparable period in fiscal 2013.
|(in thousands of dollars,|
|except per share data)||Q1 2014||Q1 2013|
|Gross margin %||18%||27%|
|EBIDTAS per share -- basic||0.00||0.04|
|Net income/(loss)/share - basic||(0.03)||0.01|
|Net income/(loss)/share - diluted||(0.03)||0.01|
|(1)||EBITDAS stands for earnings before interest, taxes, depreciation, amortization, and stock based compensation.|
The issues regarding the Q1'14 performance were anticipated and forecasted by Dalmac but as is always the case, the extent and the duration of weather related circumstances are rather difficult to predict with any degree of precision. An important prognosticator of success in our industry is to be ready, willing and able to perform. This readiness for action requires the availability of a skilled workforce and the proper and reliable equipment to do the job when called upon. It is with the knowledge and expectation of a very robust and active fall and winter season that Dalmac took the initiative to make sure we had the proper staffing levels along with properly maintained equipment. Although the down pouring of rain hampered much of our business in the first quarter, the company is expecting a stabilizing return to historical gross margins over the next few quarters. In addition, Dalmac anticipates that its recent $10.2 million purchase of new equipment and upgrades will be fully utilized by a surge of oilfield activity and production requirements.
The seasonal and weather related factors have had a dampening effect not only on Company operations, but also on the whole oil and gas industry. In spite of the slowdown in activity, which has been hovering at the lowest activity levels seen in several years, an upward movement seems to be currently underway. This is evidenced by the July and August rig counts which are showing strong signs of improvement and are currently on track to mirror, if not outpace, those of 2012. According to the Canadian Association of Oilwell Drilling Contractors, the second half of 2013 is very encouraging and activity levels are expected to rebound back to where they were in the second half of 2012. Going forward, the outlook for the balance of the year is considerably more encouraging given that this positive expectation is supported in large part by higher crude oil pricing and improved netback differential pricing as well as the optimistic prospects for future exports of Canadian natural gas through west coast LNG facilities. The aforementioned trends are expected to provide a positive foundation for an improved operating environment for our oilfield services as we venture out over the course of the year.
A conference call to discuss the results will be held today, September 30, 2013, at 1:30 pm EST/11:30 am MST.
To participate in the conference call, please dial 416-644-3414 local in Toronto or toll-free 1-800-814-4860 and request the Dalmac Energy conference.
Statements throughout this report that are not historical facts may be considered 'forward looking statements'. Such statements are based on current expectations that involve risks and uncertainties, which could cause actual results to differ from those anticipated. Important factors that can cause anticipated outcomes to differ materially from actual outcomes include the impact of general economic conditions, industry conditions, competition from other industry participants, volatility of petroleum prices, the ability to attract and retain qualified personnel, changes in laws or regulation, currency fluctuations, continued ability to access capital from available facilities and environmental risks. References to "Dalmac', the "Corporation", "Company", "us", "we", and "our" mean Dalmac Energy Inc. and its subsidiary Dalmac Oilfield Services Inc. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. We seek safe harbor.
SOURCE: Dalmac Energy Inc.
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