Winalta Inc. Announces Results for Third Quarter Ending September
30, 2012
CALGARY, Nov. 23, 2012 /CNW/ - Winalta Inc. (TSXV:
WTA.A) ("Winalta" or the "Company") announces results for the
three months ending September 30,
2012 with revenue for the quarter of $3.6 million and EBITDA of $1.3 million showed decreases of $1.3 million and $1.5
million, respectively, for the comparable three month period
in 2011. The change from the comparative period can be
attributed to a decrease in customer demand for our services as
customers have adjusted or reduced their drilling activity.
The Company also recorded a decrease in third party rental
equipment that the Company managed during the period ending
September 30, 2012.
The Company realized 46% utilization across its entire fleet of
equipment for the 9 months ending September
30, 2012, resulting in positive consolidated EBITDA of
$6.1 million as compared to
$6.8 million for the 9 months ending
September 30, 2011. Oilfield Rentals
net income of $1.5 million or
$0.04 per share compared favourably
to net income of $1.3 million or
$0.03 per share for the 9 months
ended September 30, 2011.
During the first 9 months of 2012, Winalta continued to increase
its asset base, building $4.4 million
of Wellsites and Dedicated Geo Lab units, a 13% increase in fleet
size. The Company's build program is part of its strategy to
provide newer Wellsite units and Dedicated Geo-Lab units to its
customers. The Company remains on schedule with its planned
build program for 2012.
Revenue
Winalta revenue decreased by $1.3
million, a decrease of 27% for the 3 months ended
September 30, 2012 (the "Period")
compared to the three months ended September
30, 2011 (the "Comparative Period"). This 27% decrease in
revenue year over year is attributable to decreases in utilization
and third party revenue.
|
Revenue Drivers Q3 2012 versus Q3 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
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% Increase |
|
|
Q3 2012 |
|
|
Q3 2011 |
|
|
Fleet size (# of units) |
|
|
11% |
|
|
315 |
|
|
283 |
|
Utilization (during quarter) |
|
|
(55%) |
|
|
34% |
|
|
75% |
|
Fleet Expansion
Over the past 12 months, the Company has added 22 Wellsite units
and 10 Dedicated Geo-Labs. The Company continues to expand its
fleet. For the current Period, the fleet increased by 9
Wellsite units and 2 Dedicated Geo-Lab units.
|
Fleet Growth Q3 2012 versus Q3 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
% Increase |
|
|
Q3 2012 |
|
|
Q3 2011 |
|
|
Wellsites |
|
|
12% |
|
|
237 |
|
|
212 |
|
Drill Camps (5 and 6 units) |
|
|
0% |
|
|
11 |
|
|
11 |
|
Dedicated Geo Labs |
|
|
111% |
|
|
19 |
|
|
9 |
|
Utilization
Utilization of Wellsite units for the Period was 33% as compared to
82% for the Comparative Period. A contributing factor to the
utilization decrease was the increase in Wellsite units of 10% over
the Comparative Period. Adjusting for the fleet increase, the
Company would have achieved a 42% utilization rate in the
Period.
Utilization of Dedicated Geo-Labs units for the Period was 34%
as compared to 76% for the Comparative Period. Dedicated
Geo-Lab units increased by 111% over the Comparative Period.
Actual rental days for Dedicated Geo-Lab units increased by 28% in
the Period, compared to the Comparative Period.
|
Utilization Q3 2012 versus Q3 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
% Increase |
|
|
Q3 2012 |
|
|
Q3 2011 |
|
|
Wellsites |
|
|
(60%) |
|
|
33% |
|
|
82% |
|
Drill Camps (5 and 6 units) |
|
|
(10%) |
|
|
45% |
|
|
50% |
|
Dedicated Geo Labs |
|
|
(55%) |
|
|
34% |
|
|
76% |
|
General and Administrative
For the Period, administrative costs were $974 thousand, up from $933 thousand, for the Comparative Period.
The Company has continued to focus on cost controls and reductions
occurred in salaries and benefits of $34
thousand; stock based compensation of $30 thousand; travel, meals and entertainment of
$10 thousand; and, office expenses of
$77 thousand. These reductions
were offset by an increase of $65
thousand in professional fees; additional
administrative expenses of $58
thousand relating to the remaining 50% acquisition of the
Sylvan Lake joint venture;
$17 thousand in promotional
activities; $31 thousand relating to
the completion of an outstanding legal issue; and,
$19 thousand relating to a subsidiary
company.
Depreciation and Amortization
Depreciation and amortization was $1,284
thousand for the Period as compared to $1,213 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
Interest expense for the Period was $187
thousand as compared to $303
thousand for the Comparable Period. The decrease in
interest expense in the Period was the result of the Company
renegotiating its financing facility to more favorable terms.
Outlook
The third 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. Demand for our services from customers
improved over second quarter 2012 utilization rate however,
anticipated activity in the third quarter did not materialize to
the same degree as expected as customers continued to control
spending due to uncertain market conditions, infrastructure
and oil transportation bottle-necks continue to be a concern.
Management continues to monitor these factors as this would impact
quarterly results as changing conditions directly impact drilling
activities and Company asset utilizations. The Company
continues to be conservatively optimistic in regards to the balance
of 2012 and into 2013 for the winter drilling season as the Company
has received verbal commitments which would fully utilize the
Company's assets. 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 economy will continue at the same pace for the
foreseeable future, as further supported by PSAC (Petroleum
Services Association of Canada)
forecast for the balance of 2012 and 2013, which should translate
to improved utilization rates for Winalta's equipment. In
conjunction with the expected demand, the Company is continuing to
expand the fleet of oilfield Wellsite units and Dedicated Geo-Labs
units in order to meet demand and to maintain a relatively new
fleet of units. 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.
Forward-looking information
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 the Company's 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.