Energold Drilling Corp. (EGD: TSX.V) ('Energold' or 'the Company' or 'Energold Group') announces third quarter revenue in 2015 of $22.8 million, representing a 13.1% 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% from 9.7% in the comparable period of 2014. EBITDA* in the third quarter improved significantly to $0.2 million, compared to 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 $0.08 compared to a net loss per share of $0.11 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%, 5.7% and 34.4% 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 $75.6 million in working capital.
Quarter-to-date and year-to-date results comparison
|
For three months ended September 30
|
For the year ended September 30
|
|
CAD$ (000) except per share amounts
|
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
|
(885)
|
(1,364)
|
(5,082)
|
(3,312)
|
|
|
Energy
|
(2,450)
|
(2,695)
|
(4,276)
|
(125)
|
|
|
Manufacturing
|
(368)
|
(550)
|
(1,346)
|
(2,717)
|
|
|
Corporate
|
(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
|
|
|
|
|
|
|
As of September 30, 2015
|
As of December 31, 2014
|
|
Cash
|
15,482
|
15,063
|
|
Working Capital
|
75,556
|
77,041
|
* EBITDA - Earnings before interest, taxes, depreciation and amortization (see non-IFRS (international financial reporting standards) financial measures in Energold's MD&A).
MINERAL DRILLING DIVISION
During the third quarter of 2015, Energold's mineral division drilled 65,000 meters compared to 67,500 meters in the same period in 2014, representing a minimal decrease of 3.7% despite ongoing 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 meter for the nine months of 2015 was $155 compared to $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% from 11.6% 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.
Meters Drilled
|
Q3 2015
|
Q3 2014
|
2015 Annual
|
2014 Annual
|
|
Meters Drilled
|
65,000
|
67,500
|
145,400
|
163,300
|
|
Drill Rigs
|
N/A
|
N/A
|
138
|
139
|
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 to $41.2 million in 2014. Revenue for the third quarter of 2015 improved slightly to $6.5 million compared to $6.2 million in the third quarter of 2014.
Meters Drilled
|
Q3 2015
|
Q3 2014
|
2015 Annual
|
2014 Annual
|
|
Oil sands coring
|
1,800
|
1,300
|
17,900
|
43,200
|
|
Seismic (Track and Heli portable)
|
-
|
-
|
66,300
|
-
|
|
Geothermal & geotechnical
|
64,400
|
81,000
|
238,400
|
251,900
|
|
TOTAL
|
66,200
|
82,300
|
322,600
|
295,100
|
Gross margin during the third quarter of 2015 improved significantly to 25% compared to (1)% in the same period of 2014, due to increased projects and ongoing focus on cost control.
The Company's oil sands operations generated over $10.6 million in revenues year-to-date in 2015 compared to $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 to $4.4 million in the comparable period in 2014. The remainder of revenues were earned in seismic drilling and other drilling related activities.
MANUFACTURING & WATER DRILLING - DANDO
Revenues for Dando in the third quarter of 2015 were $5.9 million with a gross margin of 17% compared to revenues of $4.0 million with a gross margin of 24% 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 multi-year 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 ongoing 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 November 27, 2015 at 11:00 am Eastern time. Dial-in numbers for the call are 416-640-5946 or 1-866-233-4585.
Energold Drilling Corp. is a leading global specialty drilling company that services the mining, energy, water, infrastructure and manufacturing sectors in approximately 25 countries. Specializing in a socially and environmentally sensitive approach to drilling, Energold provides a comprehensive range of drilling services from early stage exploration to mine site operations for all commodity sectors and has an established drill rig manufacturer, Dando Drilling International Ltd., based in the United Kingdom. Energold also holds 6.98 million shares of IMPACT Silver Corp., a silver producer in Mexico.
On behalf of the Directors of Energold Drilling Corp.,
'Frederick W. Davidson'
President, CEO
For further information, please contact:
Steven Gold - Chief Financial Officer
(416) 275-4070 or via email at [email protected]
or
Jerry Huang - Investor Relations Manager
(604) 681-9501 or via email at [email protected]
Neither 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 Statements: Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, work programs and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the effects of general economic conditions, a reduction in the demand for the Company's drilling services, the price of commodities, changing foreign exchange rates, actions by government authorities, the failure to find economically viable acquisition targets, title matters, environmental matters, reliance on key personnel, the ability for operational and other reasons to complete proposed activities and work programs, the need for additional financing and the timing and amount of expenditures. Energold Drilling Corp. does not assume the obligation to update any forward-looking statement.