08:47:11 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Energold Drilling Corp
Symbol EGD
Shares Issued 47,996,247
Close 2015-11-25 C$ 0.38
Market Cap C$ 18,238,574
Recent Sedar Documents

Energold Drilling loses $3.87-million in Q3

2015-11-27 08:16 ET - News Release

Mr. Frederick Davidson reports

ENERGOLD DRILLING GROUP ANNOUNCES THIRD QUARTER 2015 FINANCIAL RESULTS WITH YEAR-OVER-YEAR GROWTH ACROSS ALL BUSINESS SEGMENTS

Energold Drilling Corp. had third quarter revenue in 2015 of $22.8-million, representing a 13.1-per-cent increase over the third quarter of 2014. The company reported improved revenue generation in all three business divisions despite ongoing challenges across commodities markets.

The company's gross margin in the third quarter of 2015 improved to 16.8 per cent from 9.7 per cent in the comparable period of 2014. EBITDA (earnings before interest, taxes, depreciation and amortization) in the third quarter improved significantly to $200,000, compared with negative EBITDA of $3.4-million in the comparable period in 2014. Management's focus on cost control and a focus on efficiencies lead to stronger profitability. The net loss per share for the period was eight cents compared with a net loss per share of 11 cents in the same period in 2014.

During the quarter, active marketing of the company's products across all business divisions lead to revenue growth of 8.1 per cent, 5.7 per cent and 34.4 per cent in Energold's mineral, energy and manufacturing markets, respectively. Energold continues to maintain a strong and healthy balance sheet with $15.5-million in cash and $75.6-million in working capital.

               QUARTER-TO-DATE AND YEAR-TO-DATE RESULTS COMPARISON
                       (In thousands except per-share amounts)

                  For three months ended Sept. 30,    For the year ended Sept. 30,
                              2015            2014            2015            2014
Revenue
Mineral                    $10,371          $9,592         $22,562         $24,656
Energy                       6,562           6,208          23,951          43,237
Manufacturing                5,881           4,375          16,163          10,145
Total revenue               22,814          20,175          62,676          78,038
Net (loss)
Mineral (loss)               (885)         (1,364)         (5,082)         (3,312)
Energy (loss)              (2,450)         (2,695)         (4,276)           (125)
Manufacturing (loss)         (368)           (550)         (1,346)         (2,717)
Corporate (loss)             (174)           (976)         (1,338)         (2,132)
Total net (loss)           (3,877)         (5,585)        (12,042)         (8,286)
(Loss) per share
basic and diluted           (0.08)          (0.11)          (0.25)          (0.17)
EBITDA                         182         (3,383)         (1,581)           1,366

Mineral drilling division

During the third quarter of 2015, Energold's mineral division drilled 65,000 metres compared with 67,500 metres in the same period in 2014, representing a minimal decrease of 3.7 per cent despite continuing pressures across the industry. Meanwhile, revenues for the third quarter of 2015 increased to $10.4-million from $9.6-million for the same period in 2014. As a sign of improvement during the period, the average revenue per metre for the nine months of 2015 was $155 compared with $151 in 2014. There continues to be pricing pressures from customers and competitive bidding but careful selection of contracts have allowed for a more efficient operation.

Gross margin percentage from mineral drilling in the third quarter of 2015 decreased to 11.4 per cent from 11.6 per cent in the same period in 2014. As smaller drilling programs are typical at this point in the cycle, economies of scale are reduced and contribute to margin compression.

Energy drilling division -- Bertram Drilling

Given the seasonality of the energy business, the majority of revenues and activity for Bertram are typically generated in the first quarter primarily due to weather factors. Year-to-date revenues for 2015 were $23.7-million compared with $41.2-million in 2014. Revenue for the third quarter of 2015 improved slightly to $6.5-million compared with $6.2-million in the third quarter of 2014.

Gross margin during the third quarter of 2015 improved significantly to 25 per cent compared with negative 1 per cent in the same period of 2014, due to increased projects and continuing focus on cost control.

The company's oil sands operations generated over $10.6-million in revenues year to date in 2015 compared with $29.5-million in 2014. The company's oil sands operations generated $1.8-million in revenues in the third quarter of 2015 and 2014. Geothermal and geotechnical drilling accounted for $4.6-million in the third quarter of 2015 compared with $4.4-million in the comparable period in 2014. The remainder of revenues were earned in seismic drilling and other drilling-related activities.

Manufacturing and water drilling -- Dando

Revenues for Dando in the third quarter of 2015 were $5.9-million with a gross margin of 17 per cent compared with revenues of $4.0-million with a gross margin of 24 per cent in the third quarter of 2014. During the first nine months of 2015, Dando delivered 25 smaller rigs and 20 larger rigs.

Seasonal trends affect the performance of the manufacturing business in each quarter. The beginning of the year is typically reserved for participating in the annual tendering process with non-government organizations and various layers of governments worldwide. Contracts are awarded in the second and third quarters and revenue recognition is generally earned in the latter portion of the year.

Industry outlook

Industry headwinds continue to persist as energy prices test new multiyear lows while precious metal prices appear to show only some signs of stabilization rather than upward momentum required to improve the financing climate.

The company is preparing for a lighter-than-usual first quarter in 2016 in the energy drilling market. While management expects to continue to work with its key customers in the Canadian oil sands region, work levels will be reduced until hydrocarbon prices begin to recover. Management is evaluating several international opportunities using its energy drilling fleet to offset the decline in North American activity levels.

The mineral drilling segment continues to reflect lower precious and base metal prices although there is still work being tendered and performed in the majority of the company's geographical markets. Management expects this to continue given that many jurisdictions require continuing work to satisfy agreements. Despite excess capacity in most markets, pricing levels should remain stable going forward.

Energold remains well capitalized and management continues to invest in new markets and technologies for broad distribution on a case-by-case basis for its customers. A conference call is planned for Nov. 27, 2015, at 11 a.m. Eastern Time. Dial-in numbers for the call are 416-640-5946 or 1-866-233-4585.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.