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Petrowest Corporation Announces Second Quarter 2014 Financial Results

CALGARY, Aug. 13, 2014 /CNW/ - Petrowest Corporation ("Petrowest") (TSX:PRW) announced today its consolidated financial results for the three and six month periods ended June 30, 2014.

Rick Quigley, Chief Executive Officer, stated that "the financial results for the second quarter have historically been the weakest quarter of the year due to seasonal conditions.  However, despite these conditions and the fact that road bans came off later in the year compared to the prior year, the Company still managed to generate revenues of $55.4 million for the quarter, an increase of $6.1 million over the second quarter of 2013.  Adjusted EBITDA came in at $3.0 million for the quarter, a decrease from the $4.1 million in the second quarter of 2013. This decrease is primarily due to increased fuel and operating personnel costs, significant one time non-recurring business development costs and lower margins relating to the subcontractor work on the Highway 43 project. Also contributing to the lower Adjusted EBITDA were repair and maintenance costs (approximately $0.7 million over the comparable quarter in 2013) which were incurred in preparing our equipment for the third quarter, which is usually our most active. Even with the lower Adjusted EBITDA in the second quarter, our first half of the year results were still considerably ahead of the comparable period of 2013". Mr. Quigley further stated that "the Company was excited to complete the acquisition of Enviro-Mulch Land Clearing Solutions Ltd. during the quarter.  This vertically integrated acquisition truly allows Petrowest to be the 'first in' for oilfield and general construction services, while adding another highly qualified team to the Petrowest group".

FINANCIAL HIGHLIGHTS

In the three months ended June 30, 2014 compared to the same period in 2013, the Company:

  • Reported revenue of $55.4 million, an increase of $6.1 million compared to the same quarter in 2013,
  • Reported Adjusted EBITDA of $3.0 million compared to $4.1 million for the same quarter in 2013,
  • Reported Adjusted EBITDA margin of 8.8% compared to 11.3% for the same quarter in 2013,
  • On May 27, 2014, the Company acquired all of the issued and outstanding shares of Enviro-Mulch Land Clearing Solutions Ltd.

In the six months ended June 30, 2014 compared to the same period in 2013, the Company:

  • Reported revenue of $116.5 million, an increase of $21.3 million compared to the same period in 2013,
  • Reported Adjusted EBITDA of $14.1 million compared to $10.4 million for the same period in 2013,
  • Reported Adjusted EBITDA margin of 12.1% compared to 10.9% in the same period in 2013,
  • Completed a significant amount of the crushing sub-contracts awarded on the expansion of the Highway 63 project.

FINANCIAL RESULTS



Three months ended
June 30,

Six months ended
June 30,

($000's)

2014

2013

2014

2013

Revenue

55,439

49,272

116,499

95,198

Operating expense

50,540

43,697

98,663

81,945

Gross margin

4,899

5,575

17,836

13,253

General and administrative

1,863

1,456

3,747

2,886

Adjusted EBITDA

3,036

4,119

14,089

10,367

Amortization of property and equipment

4,843

5,177

9,834

9,905

Amortization of intangible assets

89

85

288

261

Share-based compensation

337

198

645

431

Gain on disposal of property and equipment

(97)

(267)

(144)

(164)

Foreign exchange loss

-

-

-

642

Operating (loss) profit

(2,136)

(1,074)

3,466

(708)

Net finance expense

1,071

2,271

2,138

8,076

Loss on fair value of financial instruments

-

2

-

6

Net (loss) income and comprehensive (loss) income

before income tax

(3,207)

(3,347)

1,328

(8,790)

Deferred income tax (recovery) expense

(970)

(22)

39

(1,117)

Net and comprehensive (loss) income

(2,237)

(3,369)

1,289

(7,673)






Total assets

166,466

134,840

166,466

134,840

Total long-term liabilities

62,920

64,373

62,920

64,373

Funds from Operations

2,106

2,359

12,231

5,867







SELECTED FINANCIAL INFORMATION AND NON-IFRS MEASURES

Selected financial information for the three and six month periods ended June 30, 2014 and 2013 is set out above and includes the following non-IFRS financial measures: Gross margin, Gross margin percentage, Adjusted EBITDA, Adjusted EBITDA margin percentage and Funds from Operations. This information should be read in conjunction with the consolidated financial statements for the three and six months ended June 30, 2014 and the Company's Management, Discussion and Analysis ("MD&A"), available under the Company's profile on the SEDAR website at www.sedar.com. Further information respecting the non-IFRS financial measures is contained in the Company's MD&A.

FORWARD LOOKING INFORMATION

This news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are identified by their use of terms and  phrases such as "anticipate",  "achievable",  "believe", "expect",  "estimate",  "plan",  "intend",  "project",  "may",  "should",  "could",  "predict",  "will",  or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements and information are based on Petrowest's current beliefs as well as assumptions made by and information currently available to Petrowest concerning anticipated business performance. Although management of Petrowest considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements are subject to many external variables that are beyond Petrowest's control, such as fluctuating prices for crude oil and natural gas, changes in drilling activity, and general local and global economic, political, business and weather conditions. If any of these or other uncertainties materialize, the actual results of Petrowest may vary materially from those expected.

ABOUT PETROWEST

Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.

SOURCE Petrowest Corporation

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