EDMONTON, Alberta, March 24, 2017 (GLOBE NEWSWIRE) -- John Babic, President and CEO of Dalmac Energy Inc. (“Dalmac”) (TSX-V:DAL) is pleased to announce the unaudited three and nine month results for the reporting period ended January 31, 2017.
| FINANCIAL HIGHLIGHTS | Change | Change | ||||||||||
| (000’s Cdn Dollars, except per share data) | Q3'17 | Q3'16 | % | YTD '17 | YTD '16 | % | ||||||
| Revenues | 4,326 | 6,096 | (29 | )% | 12,175 | 17,147 | (29 | )% | ||||
| Gross Profit | 1,276 | 1,441 | (11 | )% | 2,859 | 2,645 | 8 | % | ||||
| Gross Margin (%) | 30 | % | 24 | % | 25 | % | 26 | % | 24 | % | 11 | % |
| EBITDAS (loss) | 595 | 650 | (8 | )% | 1,412 | 1,612 | (12 | )% | ||||
| Net earnings (loss) | (338 | ) | (297 | ) | 14 | % | (1,551 | ) | (1,133 | ) | 37 | % |
| Earnings (loss) per share - basic | (0.01 | ) | (0.01 | ) | nil | % | (0.05 | ) | (0.05 | ) | nil | % |
| Earnings (loss) per share - diluted | (0.01 | ) | (0.01 | ) | nil | % | (0.05 | ) | (0.05 | ) | nil | % |
Business Highlights
- Industry activity levels during first month of Q3’17 began on a very favorable trend. By the second month of the quarter it was apparent that the supply chain logistics for the drilling and completions sector couldn’t ramp up quick enough to meet the demand for their services. The main bottle neck was the availability of a seasoned and trained labour force. After two years of slumbering inactivity, the staffing levels were coming off of all-time lows. This impairment resulted in delays to start dates for the primary provider, which in turn resulted in pushing back the demand for secondary service providers such as Dalmac. So, what began as a good start for Dalmac soon plateaued and didn’t rebound until the second half of the third month of Q3’17.
- It is anticipated that the traditional spring and break up, which occurs in yearly fourth and first quarters, will be tempered with increased activity resulting in rescheduled work projects as our customers strive to catch up on delays caused by the aforementioned supply logistics.
- Gross margin increased almost 6% to 30% from Q3’16
- Even though quarterly revenue was down by 29% as compared to last year, EBITDA for the quarter decreased only 8% to $595K.
- The net loss for the quarter was $338K, of which the loss on sale of assets amounted to $221K
Outlook
Confidence in the oil and gas industry is trending higher in conjunction with WTI oil prices hovering in the low $50 range for most of the quarter. On January 30, 2017, the Petroleum Services Association of Canada (“PSAC”) increased its 2017 Canadian Drilling Activity Forecast by 975 wells or 23% to 5,150 wells from the original November 2016 forecast. As demand for drilling and completion services continues to increase across the industry, it has become apparent that the deterioration in the skilled labour force due to the lack of work and layoffs that have occurred over the last two years has become a limiting factor as to how quickly oilfield service companies will be able to service their E&P customers.
Dalmac anticipates that if this tight labour market continues to strain the industry for several more quarters, it should also lead to increased pricing for our services and improved operating and cash flow margins in future quarters. Dalmac’s continued proactive focus on targeted reductions to variable and fixed costs, headcount, wages, and strategic and prudent capital expenditures has contributed to the Company being able to achieve positive EBITDAS and hold their gross margin % throughout fiscal 2017 despite competitive pricing pressures.
Management feels that these operational and financial measures will not only result in significant and sustainable cash flow benefits to the Company but will also provide us with the necessary framework and discipline as we plan our return to profitability. While Dalmac continues to maintain focus on its operational and financial performance, it is also mindful of taking advantage of opportunities as they arise. Dalmac will actively continue to evaluate strategic opportunities when they arise and pursue those it believes will be fundamentally beneficial to the creation of long-term shareholder value.
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.