EDMONTON, Aug. 29, 2014 /CNW/ - John Babic, President and CEO of Dalmac Energy
Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce
fourth quarter and annual financial results for the fiscal year
ended April 30, 2014.
Fourth Quarter and Annual Financial Highlights:
- EBITDAS increases 83% to $2.1M
for Q4'14
- Non recurring adjustments concerning equipment lease expenses
decrease net income by $1.6
million.
- 2014 revenue down by $4.0 million
due to cancellation of committed drilling programs by key customer.
Dalmac hires new CFO
- Over $175K spent on modern IT
system development, designed to reduce costs.
Selected Financial Information
(000's Cdn Dollars,
except per share data)
|
Q4'14
|
Q4'13
|
YE '14
|
YE'13
|
|
|
|
|
|
Revenues
|
9,923
|
11,476
|
37,132
|
41,304
|
Gross
Margin
|
1,954
|
2,535
|
8,577
|
10,504
|
|
|
|
|
|
General and
administrative expenses*
|
757
|
640
|
2,233
|
2,359
|
EBITDAS
(loss)
|
2,074
|
1,130
|
5,131
|
5,222
|
EBIDTAS per
share - basic
|
0.09
|
0.05
|
0.22
|
0.23
|
Amortization
|
1,006
|
683
|
3,179
|
2,446
|
Net income
(loss)
|
(710)
|
(30)
|
(520)
|
1,512
|
Net income (loss) per
share - basic
|
(0.03)
|
(0.00)
|
(0.02)
|
0.07
|
Net income (loss) per
share - diluted
|
(0.03)
|
(0.00)
|
(0.02)
|
0.06
|
Revenue for YE'14 came in at $37M
which represents a decrease of about 10% or $4.1M from the previous year. Fiscal 2014 was
weighed down by factors such as a slower than expected first
quarter and a lower than normal utilization of well servicing
equipment. As stated in earlier MD&A's, this year's first
quarter operations were hampered by rainy and wet seasonal
conditions which resulted in the cancellation of many work
projects. The latter issue which concerns the lower than expected
well service equipment utilizations is attributed to a late
cancellation of committed drilling projects by one of our main
customers. Given that the bookings for drilling and completion work
were made months in advance, this late cancelation resulted in lost
opportunities for bidding on other drilling and completion
projects. This decrease in service revenue also affected Q4'14
which was down 14% or $1.5M in
comparison to the same quarter last year. Responding to this
development Dalmac has redressed its handling of committed
equipment contracts by making provisions for non performance in the
event a similar situation arises.
Gross Margin as a percentage for YE'14 was 23% compared to 25%
for YE'13. The decline is a direct result of non recurring lease
payments expensed in the amount of $1.6M in YE'14 related to operating lease
agreements entered into by the Company in 2013. During Q4'14 the
Company exercised the buyout clause of these lease agreements as
the buyout amount was at a significant discount to fair value. Even
after factoring in new finance costs, the decision to exercise the
buyout resulted in a further monthly cash savings of about
$100K by eliminating the lease
payments. Other factors impacting the gross margin in YE'14 were
rising fuel and maintenance costs.
Net Income – The YE'14 was impacted by $1.6M in non reoccurring lease payment expenses,
referenced earlier in the gross margin section of this
MD&A, which resulted in a net loss of $520K as compared to a net income of $1.5M in the previous year.
EBITDAS, for the fourth quarter, improved by an impressive 83%,
to $2.1M, as compared to the same
period last year. Year end EBITDAS dropped marginally by 2% to
$5.1M as compared to YE'13. Had it
not been for the rough start to the beginning of the year and the
cancellation of seasonal drilling programs by one of our key
customers, the EBITDAS would have been in the proximity of record
levels.
In May of 2014 Dalmac's CFO resigned for personal reasons. On
August 22, 2014 the Company announced
the hiring of Jonathan Gallo, CA, MBA as our new CFO and has
released a press release on the same date.
Also as part of its continuous improvement process, Dalmac has
invested over $175K in the
development and implementation of a modern IT system which is part
and parcel of the process control system for dispatching, fleet
management and tracking, invoicing and journey management.
Management feels that this system will enable the Company to
operate more efficiently and effectively and will enable us to
reduce costs and improve profits and revenues.
Outlook
Dalmac remains optimistic looking forward as rig counts are
projected to continue to improve over the remainder of 2014 and
into 2015. Confidence in the Canadian oil and gas market is
further illustrated through the approximately $15 billion worth of mergers and acquisitions in
the first six months of 2014 as compared to $12.4 billion during all of 2013. The driving
factor for all of this activity is mainly the increased interest in
the shale oil and gas plays. Dalmac's focus for the remainder of
2014 will be on continued productivity improvements such as the
implementation of a new computerized dispatching and invoicing
system. Not only will these improvements aid in streamlining labor
costs, optimize equipment deployment, monitor and expedite
improvements in fleet operations and maintenance but will also shed
more light as to how to better utilize excess capacity. Management
feels these processes will not only help lower operating costs but
will also afford Dalmac the opportunity to better position itself
for increased growth and profitability in fiscal 2015.
Conference call
A conference call to discuss the results will be held
Friday August 29, 2014, at
1:30 pm EST/11:30 am MST.
To participate in the conference call, please dial 416-847-6330
local in Toronto or toll-free
1-866-530-1553 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 Dalamc
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.