CALGARY, AB, May 6, 2021 /CNW/ - AKITA Drilling
Ltd. (TSX: AKT.A)
AKITA Drilling Ltd. (the "Company") announces results for the
three months ended March 31,
2021.
The impact of the severe economic slowdown, attributable to the
COVID-19 global pandemic that curtailed drilling activity over the
last three quarters of 2020, continued to influence the first
quarter of 2021. In the first quarter of 2021, the company recorded
a net loss of $3,651,000, compared to
a net loss of $52,257,000
($321,000 excluding the asset
impairment loss of $60,000,000) in
the first quarter of 2020. Adjusted funds flow from operations
decreased to $3,719,000 in the first
quarter of 2021 from $10,154,000 in
the same period of 2020 and adjusted EBITDA decreased to
$4,534,000 from $11,646,000 over the same period in 2020. Year
over year results in the first quarter of 2021 were significantly
lower than the first quarter of 2020 since the impact of the
COVID-19 pandemic had not yet manifested over the same period in
2020.
Compared to the fourth quarter of 2020, the first quarter of
2021 has shown definite signs of improvement. Activity levels in
both Canada and the US have
improved and the general sentiment in the industry is that a slow
recovery is underway. In the quarter, AKITA commenced operating
near Fort Nelson BC on its first
geothermal drilling project, which is closely linked to local First
Nations groups and AKITA's joint venture partners.
Karl Ruud, AKITA's President and
Chief Executive Officer stated: "We believe the worst activity
levels are behind us and are cautiously optimistic, especially in
Canada, that the industry is
poised for improvement over the coming years."
CONSOLIDATED FINANCIAL HIGHLIGHTS
|
($ thousands except
per share amounts)
|
|
|
|
|
|
For the three months
ended March 31,
|
|
2021
|
2020
|
Change
|
%
Change
|
|
Revenue
|
|
|
|
27,171
|
53,572
|
(26,401)
|
(49%)
|
|
Operating and
maintenance expenses
|
20,012
|
41,192
|
(21,180)
|
(51%)
|
|
Operating
margin
|
|
|
7,159
|
12,380
|
(5,221)
|
(42%)
|
|
Margin %
|
|
|
26%
|
23%
|
3%
|
13%
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
4,534
|
11,646
|
(7,112)
|
(61%)
|
|
Per share
|
|
|
0.11
|
0.29
|
(0.18)
|
(61%)
|
|
|
|
|
|
|
|
|
|
Net cash from (used
in) operating activities
|
(5,692)
|
4,583
|
(10,275)
|
(224%)
|
|
|
|
|
|
|
|
|
|
Adjusted funds flow
from operations(1)
|
3,719
|
10,154
|
(6,435)
|
(63%)
|
|
Per share
|
|
|
0.09
|
0.26
|
(0.17)
|
(65%)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
(3,651)
|
(52,257)
|
48,606
|
93%
|
|
Per share
|
|
|
(0.09)
|
(1.32)
|
1.23
|
93%
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
1,604
|
3,527
|
(1,923)
|
(55%)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
39,608
|
39,608
|
-
|
0%
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
252,771
|
317,567
|
(64,796)
|
(20%)
|
|
Total debt
|
|
|
79,258
|
86,631
|
(7,373)
|
(9%)
|
CONSOLIDATED OPERATIONAL HIGHLIGHTS
|
For the three months
ended March 31,
|
|
2021
|
2020
|
Change
|
% Change
|
|
Canada
|
|
|
|
|
|
|
|
Operating
days
|
|
490
|
613
|
(123)
|
(20%)
|
|
Utilization
|
|
|
27%
|
55%
|
(28%)
|
(51%)
|
|
Revenue per operating
day(1)(2)
|
28,816
|
30,449
|
(1,633)
|
(5%)
|
|
Operating and
maintenance expenses per
operating day(1)(2)
|
21,071
|
23,002
|
(1,931)
|
(8%)
|
|
Operating margin per
operating day
|
7,745
|
7,447
|
298
|
4%
|
|
United
States
|
|
|
|
|
|
|
|
Operating
days
|
|
704
|
1,108
|
(404)
|
(36%)
|
|
Utilization
|
|
|
46%
|
68%
|
(22%)
|
(32%)
|
|
Revenue per operating
day(1)
|
26,888
|
35,996
|
(9,108)
|
(25%)
|
|
Operating and
maintenance expenses per
operating day(1)
|
20,878
|
28,013
|
(7,135)
|
(25%)
|
|
Operating margin per
operating day
|
6,010
|
7,983
|
(1,973)
|
(25%)
|
|
|
|
|
|
|
|
|
|
(1)Non-GAAP Items
|
|
|
|
|
|
|
|
(2)Includes AKITA's share of Joint Venture
revenue and expenses.
|
|
United States Drilling Division
In the US, the land drilling active rig count reached a decade
low of 244 rigs in August of 2020, and has been slowly increasing
since then, with 417 rigs active at the end of the first quarter of
2021. This level of activity is still significantly lower than the
prior two years. AKITA's utilization was 48% (704 operating days)
in the first quarter of 2021, compared to 32% (506 operating days)
in the fourth quarter of 2020 and 68% (1,108 operating days) in the
first quarter of 2020. Although activity has begun to improve in
the US, it is improving slowly and day rates remain depressed.
Revenue in the US was $18,919,000
for the first quarter of 2021, down from $39,844,000 in the first quarter of 2020. This
53% drop in revenue is attributable to the decrease in operating
days, coupled with revenue per operating day, which fell to
$26,888 per operating day in the
first quarter of 2021 compared to $35,996 over the same period in 2020.
Canadian Drilling Division
In Canada, industry utilization
in the first quarter of 2021 averaged 27%, below the first quarter
utilization average in 2020 of 35% and 2019 average of 29%. AKITA's
first quarter utilization was in line with industry average at 27%
(490 operating days) compared to 31% (613 operating days) in the
first quarter of 2020. The demand for drilling services in
Canada that reached a historical
low in June of 2020, due to the above noted factors, has slowly
started to improve. Historically the first quarter of the year is
the most active in Canada.
Revenue in Canada was
$14,120,000 for the first quarter of
2021, down from $18,665,000 in the
first quarter of 2020. This 24% drop in revenue is attributable to
both the decrease in operating days and a 5% decrease in revenue
per day. Operating income per operating day increased slightly to
$7,745 in the first quarter of 2021
from $7,447 in the first quarter of
2020 due to lower operating and maintenance expenses per operating
day which decreased 8% due to cost cutting in the second quarter of
2020 and $807,000 in Canadian
Emergency Wage Subsidy received in the first quarter of 2021.
FURTHER INFORMATION
This news release shall be used as preparation for reading the
full disclosure documents. AKITA's unaudited interim condensed
consolidated financial statements and management's discussion and
analysis for the quarter ended March 31,
2021 will be available on the AKITA website
(www.akita-drilling.com) or via SEDAR (www.sedar.com) or can be
requested in print from the Company.
NON-GAAP ITEMS
This news release references Non-GAAP (Generally
Accepted Accounting Principles) items. Revenue per operating day,
operating and maintenance expense per operating day, adjusted
revenue, adjusted operating and maintenance expense, EBITDA and
adjusted funds flow from operations are all considered Non-GAAP
items. Management feels that these Non-GAAP items are useful in
assessing the Company's performance. These terms do not have
standardized meanings prescribed under International Financial
Reporting Standards (IFRS) and may not be comparable to similar
measures used by other companies. For further information, see
"Basis of Analysis in this MD&A and Non-GAAP Items" in AKITA's
March 31, 2021 Management's
Discussion & Analysis.
FORWARD-LOOKING INFORMATION:
Certain statements contained in this news release may
constitute forward-looking information. Forward-looking information
is often, but not always, identified by the use of words such as
"anticipate", "plan", "estimate", "expect", "may", "will",
"intend", "should", and similar expressions.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information.
The Company's actual results could differ materially from
those anticipated in this forward-looking information as a result
of regulatory decisions, competitive factors in the industries in
which the Company operates, prevailing economic conditions
(including as may be affected by the COVID-19
pandemic), and other factors, many of which are beyond the
control of the Company.
The Company believes that the expectations reflected in the
forward-looking information are reasonable, but no assurance can be
given that these expectations will prove to be correct and such
forward-looking information should not be unduly relied
upon.
Any forward-looking information contained in this news
release represents the Company's expectations as of the date
hereof, and is subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required by applicable
securities legislation.
SOURCE AKITA Drilling Ltd.
