News Feed Item

Energold Drilling Group Announces 2013 Annual Financial Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/10/14 -- Energold Drilling Corp. ("Energold" or "the Company") (TSX VENTURE:EGD) announces annual revenue in 2013 of $122.8 million across four business divisions, representing a 15% decrease over 2012 revenue of $141.5 million. Challenging market conditions continued to persist in the mineral segment although this was partially offset by revenue increases in the energy and manufacturing segments of 9% and 65% compared to 2012. These results highlight the successful diversification objectives of the Company over the last several years.

The Company's overall gross margin fell in 2013 to 17% from 23% in 2012 due to reduced mineral drilling activity, a changing business mix in the energy segment including higher setup costs and the effect of cost allocation timing in the manufacturing segment. The adjusted net loss(ii) in 2013 was $9.1 million or $(0.19) per share compared to net earnings of $2.3 million or $0.05 per share in 2012.

Fourth quarter 2013 revenue totalled $29.1 million, representing an increase of 13% compared to $25.7 million in the same period in 2012. The fourth quarter is historically one of the slowest periods in mineral drilling for the Company while the energy segment begins to ramp up for the winter season but typically carries associated setup costs. The manufacturing business increased more than four-fold year over year as the division successfully delivered multiple units to large customers. Gross margin for the quarter was 6% on a Company-wide basis compared to 8% in the same period in 2012. There was a net loss of $(0.26) per share in the period compared of $(0.11) in the fourth quarter 2012. In the fourth quarter, the Company recorded several one-time charges including a $4.0 million payment in lieu of future earnout payments to previous shareholders of Bertram Drilling (announced in Q4/2013), a write-down on non-core exploration properties of $0.5 million and a write-down on available for sale investments of $0.6 million.

Energold's balance sheet for 2013 remains well capitalized with $26.6 million in cash and $65.4 million in working capital.

2013 Annual Results Comparison ($CAD '000s except per-share amounts and meters drilled)

                                     For Three Months     Year over Year   
                                           Ended            Performance    
                                        December 31         Comparison     
                                         2013      2012      2013      2012
                 Mineral                6,084    14,971    48,620    80,439
                 Energy                11,840     8,220    51,258    47,148
                 Manufacturing         11,191     2,513    22,929    13,927
Total Revenue                          29,115    25,704   122,807   141,514
Earnings (Loss)                                                            
                 Mineral              (4,285)     (393)   (2,921)     3,709
                 Energy               (8,411)   (4,318)  (12,208)  (11,781)
                 Manufacturing            387     (284)   (2,308)     (578)
Total Earnings                       (12,309)   (4,995)  (17,437)   (8,650)
Earnings Per                                                               
 Share           Basic and diluted     (0.26)    (0.11)    (0.36)    (0.19)
EBITDA(i)                            $(8,816)  $(2,442)  $(4,421)    $6,548
Adjusted Earnings(ii)                $(6,243)  $(4,392)  $(9,143)    $2,339
Adjusted Earnings                                                          
 Per Share       Basic and diluted    $(0.13)   $(0.10)   $(0.19)     $0.05
                                     As of December 31,  As of December 31,
                                                   2013                2012
Cash                                            $26,608             $28,493
Working Capital                                 $65,450             $81,847
(i) EBITDA - Earnings before interest, taxes, depreciation and amortization
 (see non-GAAP (generally accepted accounting principles) financial        
(ii) Adjusted Earnings - Extraordinary and non-cash items include earn-out 
 payment related to Bertram, accretion expense on debenture, finance cost  
 for sales leaseback financing, share-based payments, foreign exchange,    
 dilution and equity gain/loss on IMPACT, impairment/write-down of assets. 


Demand has not recovered to the levels seen in March 2011. During the fourth quarter of 2013, Energold's mineral division drilled 44,300 meters compared to 86,600 meters in the same period of 2012, a decrease of 49%. Revenues for 2013 were $48.6 million compared to $80.4 million in the same period of 2012, reflecting the greatly diminished junior mining activity save for certain one-off circumstances.

Revenues for the fourth quarter of 2013 were $6.1 million compared to $15.0 million for the same period in 2012. Average revenue per meter for 2013 decreased to $164 from $188 due to competitive pricing pressures from customers seeking to maximize exploration budgets. The majority of the decline in junior exploration activity has likely already occurred and while intermediate and senior players continue to focus on reserve replacement through exploration, those companies appear to remain cautious about the size of their programs and prudent in their commitments to drilling activity.

Gross margin(1) percentage remains heavily impacted by the type of drilling the Company performs, the region and country in which it works, and the type of client. Junior miners typically explore more frontier style environments that allow for higher margin frontier drilling, and there is now increased presence of senior miners exploring the frontier regions. Gross margin percentage from mineral drilling in 2013 and Q4-2013 was 23% and 1%, respectively, compared to 27% and 25% in 2012 and Q4-2012. Some stabilization took place earlier this year which has translated into a new environment of lower rates and utilization levels. The Company maintains a strong infrastructure network in all regions where it operates, which allows for a relatively lean operation.

(1) Gross margin and gross margin percentage are non-IFRS measures.

Meters Drilled During the Quarter

                             Q4 2013      Q4 2012  2013 Annual  2012 Annual
Meters Drilled                44,300       86,600      296,500      428,300
Drill Rigs                       N/A          N/A          138          133


Revenue for 2013 was $50.5 million compared to $47.1 million and revenues for Q4-2013 was $11.1 million compared to $8.2 million Q4-2012. For the year ended December 31, 2013, 91% of revenue was generated in Canada with the remainder contributed from the U.S. Meters were drilled in the following areas:

Meters Drilled

                             Q4 2013      Q4 2012  2013 Annual  2012 Annual
Oil Sands coring               7,600       14,300       63,000       64,500
Seismic (Track and Heli                                                    
 portable)                     4,500            -      178,700      335,500
Geothermal &                                                               
 geotechnical                 28,100       25,100       93,500      230,600
TOTAL                         40,200       39,400      335,200      630,600

The gross margin for 2013 was 12% compared to 16% in 2012. The gross margin for Q4-2013 was (6)% compared to (27)% in Q4-2012. The negative gross margin during the period relates to generally higher than expected logistical costs associated with helicopter expenses being much higher than anticipated for one project in particular. Additionally, there was a delayed start on another project which inflated wage costs and the Company had to absorb stand-by fees and associated wages until the actual drilling process commenced. In 2013, Bertram drilled approximately 248,900 meters in Canada and approximately 86,300 in U.S. In 2012, Bertram drilled approximately 380,400 meters in Canada and approximately 250,200 in the U.S.

The Company's oil sands operations generated over $8.6 million in revenue in the fourth quarter of 2013, compared with $7.2 million in the comparable period in 2012. Year-to-date oils sands revenue in 2013 totaled $40.4 million in 2013, compared with $31.1 million in 2012. Programs conducted on behalf of major operators accounted for all the Company's oil sands revenue.

In the fourth quarter of 2013, geothermal and geotechnical drilling accounted for $2.1 million compared to $1.0 million in the comparable period in 2012. For the year to date, this sector generated $6.3 million of year-to-date revenues in 2013 compared to $9.0 million in 2012. Track seismic represents the remainder of the revenues.

As discussed above, the Company entered into a joint venture, called EESI, with a local partner in Colombia who is a leader in the seismic drilling business and expects considerable growth from this region in general and Colombia in particular over the next several years. Energold holds 60% ownership of EESI and the partner holds 40%. In the fourth quarter of 2013, the Company commenced its drilling operations in Colombia in the energy industry. EESI accounted for $0.7 million of the Company's revenues and had gross margin of 13%.


Revenues for manufacturing in 2013 were $21.7 million with an operating margin of 15% compared to revenues of $13.9 million with an operating margin of 23% in 2012. Revenues for manufacturing in the fourth quarter of 2013 were $10.5 million with 20% gross margin compared to revenues of $2.5 million with an operating margin of 24% in the fourth quarter of 2012. Revenues for 2013 for the water drilling division, Hydrofor Togo, were $1.2 million with an operating margin of 10%. Revenues in the fourth quarter of 2013 for Hydrofor Togo were $0.7 million with negative gross margin of 4%. Approximately $1.0 million of the $2.3 million 2013 loss in the manufacturing segment relates to Hydrofor Togo and relates primarily to start-up costs for Hydrofor Togo.

During the year, Dando sold 57 rigs which included a variety of drills such as the Geotec 6 rig, Terrier mini rigs, cable percussion site investigations rigs, Watertec 40 heavy water well drills, Mintec 12.8, Watertec 6000, Multitec 9000, and geotechnical rigs (2000 and 3000 models).

Demand for rigs and equipment remains high and the Company is actively participating in multiple tender processes. Dando continues to receive strong enquiries for its products and has inquiry quotations of approximately GBP 80 million. As part of its plans to service future growth, Dando continues to build additional small rigs for stock. While this strategy tends to increase costs in the short run, revenue generally follows in latter periods. The Company remains on target to achieve a substantial increase in revenues and profit driven by a faster delivery schedule and increased momentum in certain key markets where larger numbers of rigs are being ordered at a time.


Management believes majority of the mineral drilling downturn has already occurred due to lower levels of financing activity for junior miners. Over the next 12-18 months, the Company sees a gradual increase in drilling activity in the areas in which it operates.

The Company's energy business remains strong in its Western Canadian, U.S. and South American markets. Higher sustained oil prices and a recovery in natural gas demand and pricing have helped keep demand for field services strong in most markets. Costs remain an issue for the industry due to skilled labour shortages and component costs, which are compounded by higher overall setup costs associated with preparing for busier seasons in late fall and winter. Management is working with its customers to address these costs to ensure profitability over the near and long terms.

The manufacturing business should continue to improve as brand recognition increases in existing and new markets. As well, certain existing customers have indicated they may expand purchase programs which would bode well for both the Company's backlog but also as a feeder base for its parts, service and components business over time.

The Company remains well capitalized and is continuously looking for new acquisitions and joint venture partnerships. Management will continue to monitor overall costs and capital expenditures, deploying capital to specific areas of growth as opportunities present themselves.

A conference call is planned for April 10, 2014 at 4:30pm Eastern. Dial-in numbers are 647-426-1845 or 1-866-782-8903.

Energold Drilling Corp. is a leading global specialty drilling company that services the mining, energy, water, infrastructure and manufacturing sectors in 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, based in the United Kingdom. Energold also holds 6.98 million shares of IMPACT Silver Corp., a profitable silver producer in Mexico.

On behalf of the Directors of Energold Drilling Corp.,

Frederick W. Davidson, President, CEO

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news 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.

Energold Drilling Corp.
Steven Gold
Chief Financial Officer
(416) 275-4070
[email protected]

Energold Drilling Corp.
Jerry Huang
Investor Relations Manager
(604) 681-9501
[email protected]

Energold Drilling Corp.
1100 - 543 Granville St.
Vancouver, BC V6C 1X8
604 681 9501
604 681 6813 (FAX)
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.