CALGARY, Aug. 22, 2012 /CNW/ - Winalta Inc. (TSXV: WTA) ("Winalta" or the "Company") announces results for the 3 months ending June 30, 2012 with revenue of $2.0 million and negative EBITDA of $151 thousand. Revenue and EBITDA have decreased from the comparable 3 month period in 2011 by $600 thousand and $374 thousand, respectively. Seasonal slowdown in drilling activity was compounded as the normal late second quarter recovery in rig activity that follows spring break-up did not occur due to very wet conditions in June, which negatively impacted rental utilization.
The Company realized 53% utilization across its entire fleet of equipment for the 6 months ending June 30, 2012, resulting in positive consolidated EBITDA of $4.8 million as compared to $4.0 million for the 6 months ending June 30, 2011. Oilfield Rentals net income of $1.7 million or $0.04 per share compared favourably to net income of $13 thousand or $0.00 per share for the 6 months ended June 30, 2011.
During the first 6 months of 2012, Winalta continued to increase its asset base, building $2.4 million in Wellsites and Dedicated Geo Lab units to maintain its premier rental fleet. The Company will continue to monitor both its fleet utilization and its capital expenditure program for the remainder of 2012.
|Three Months Ended||Six Months Ended|
| June 30,
|June 30, 2011|| June 30,
|June 30, 2011|
|Earnings per share and diluted earnings per share||(0.04)||(0.04)||0.04||0.00|
| EBITDA per share
Winalta revenue decreased by $600 thousand, a decrease of 23% for the 3 months ended June 30, 2012 (the "Period") compared to the three months ended June 30, 2011 (the "Comparative Period"). This 23% decrease in revenue year over year is attributable to decreases in utilization and third party revenue.
|Revenue Drivers Q2 2012 versus Q2 2011|
|% Increase||Q2 2012||Q2 2011|
|Fleet size (# of units)||12%||304||272|
|Utilization (during quarter)||(40%)||21%||35%|
Over the past 12 months, the Company has added 21 Wellsite units and 11 Dedicated Geo-Labs. The Company continues to expand its fleet. For the current Period, the fleet increased by five Wellsite units and two Dedicated Geo-Lab units.
|Fleet Growth Q2 2012 versus Q2 2011|
|% Increase||Q2 2012||Q2 2011|
|Drill Camps (5 and 6 units)||0%||11||11|
|Dedicated Geo Labs||183%||17||6|
Utilization for the Period was down across Wellsites, Drill Camps and Dedicated Geo Lab units as continued wet weather negatively impacted second quarter utilization.
Utilization for the whole fleet for the six months ending June 30, 2012 was 53% as compared to the 62% for the six months ending June 30, 2011. The Company continues to maintain the daily charge out rate on its units. The continued wet weather is expected to negatively impact the third quarter utilization as demand has remained below expectations.
|Utilization Q2 2012 versus Q2 2011|
|% Increase||Q2 2012||Q2 2011|
|Drill Camps (5 and 6 units)||(30%)||16%||23%|
|Dedicated Geo Labs||(41%)||30%||51%|
General and Administrative
For the Period, general and administrative expenses were $1,073 thousand. The selling, general and administration expense were $1,273 thousand, for the Comparative Period. The 16% reduction in general and administrative expenses was achieved by reductions in salaries and benefits, stock based compensation, travel, meals, entertainment and professional fees.
Depreciation and Amortization
Depreciation and amortization was $1,247 thousand for the Period as compared to $1,178 thousand for the Comparative Period. The increase in depreciation and amortization expense reflects the acquisition of $4.6 million of equipment in the trailing 12 months.
Interest expense for the Period was $256 thousand as compared to $598 thousand for the Comparable Period. The decrease in interest expense in the Period is due to a deferred financing fee of $250 thousand in the Comparative Period that was expensed as the Company renegotiated its financing facility to more favorable terms.
The second quarter of 2012 resulted in some challenges for the Company due to adverse weather conditions and volatile market conditions relating to gas and oil price fluctuations which impact drilling activities. Challenging weather conditions, volatile market conditions, infrastructure and bottle-neck constraints continue to be monitored by management as these factors could impact quarterly results as changing conditions directly impact drilling activities and Company asset utilizations. The Company continues to be optimistic in regards to the balance of 2012 and into 2013 for the winter drilling season. This combined with the continued Western Canadian economic activity, in both oil and gas exploration, should continue to provide opportunities for the Company. The Company believes the strong economy will continue for the foreseeable future, as further supported by CAODC (Canadian Association of Oilwell Drilling Contractors) forecast for the balance of 2012, which should translate to improved utilization rates for Winalta's equipment. The additions to the fleet will allow the Company to continue to support its customer base in meeting their needs as well as expanding to new customers.
Winalta Inc., operating under the trade name, Winalta Oilfield Rentals, is an oilfield service provider that specializes in portable industrial rental accommodations, remote offices and Dedicated Geo Labs; servicing the Western Canadian oil and gas Industry.
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.
Certain information set forth in this press release, including management's assessment of the potential for increased cash flows, continued growth of the Company's rental fleet, demand for the Company's rental units and the Company's expectation regarding the status of the economy and its impact on the Company, may constitute forward-looking statements. By their nature, forward-looking statements involve material assumptions and are subject to numerous risks and uncertainties, including with respect to market and economic conditions and their impact on the Company's business, some of which, are beyond our control. Readers are cautioned not to place undue reliance on the forward-looking statements as the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and actual results, performance or outcomes could materially differ from those expressed or implied in such forward-looking statements and accordingly, no assurance can be given that any of the events anticipated by forward looking statements will transpire or occur, or if any of them do so, what benefit Winalta will derive therefrom. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.
SOURCE: Winalta Inc.
For further information:
David Hopley, CFO
Phone: (780) 960-6900
Austin Fraser, Senior Vice President
Phone: (403) 826-5701