Entrec up 20% in first quarter 2014

By Alex Dahm27 May 2014

Heavy lifting and transport specialist Entrec Corporation in Canada increased revenue by 20 % to US$62.0 million in the first quarter of 2014 over the $52.0 million in the same quarter a year earlier.

Earnings before interest, tax and depreciation (EBITDA), however, was $10.7 million compared with the $13.4 million in Q1 a year earlier. Utilisation was lower in the most recent quarter, the company said, largely due to a lag in construction projects in the Alberta oil sands region and in other industries. More competitive pricing in the transportation sector and higher fuel costs were additional factors. Strong demand was reported from Northeast British Columbia and Northwest Alberta on LNG-driven natural gas projects.

Entrec reiterated its guidance that full year 2014 revenue could range between $230 and $250 million.

“In the short term, we expect the reduced activity levels to continue into the second quarter of 2014 and that our equipment utilisation levels will remain lower than last year,” said John Stevens, Entrec president and CEO. “We are also entering our seasonal spring break-up period where the spring snow melt and wet conditions make the ground unstable and less capable of supporting vehicles with heavy loads.

“Over the longer term, we continue to expect revenue will trend upward in the second half of 2014 and into 2015 as project work begins to ramp up and utilisation levels increase. Higher utilisation levels could also continue into 2016 and 2017 due to the long-term nature of many oil sands projects. In Northeast B.C. and Northwest Alberta, we anticipate continued robust activity levels through the remainder of 2014 from our operations which are supporting numerous LNG-related natural gas projects in those regions.”

For 2014 Entrec’s fleet expansion plan includes $29 million for cranes and $4 million for heavy transport equipment. In the first quarter of 2014 capital expenditures was $15.3 million in growth capital expenditures and $2.6 million in maintenance capital expenditures. Of that, $7.2 million was for cranes and trailers. Entrec reduced its salaried workforce by 15 % and consolidated two branches in March. It is also working to increase rates and apply fuel surcharges.

Growth at Entrec in 2014 included the 15 April acquisition of Superior Oilfield Hauling (2005) Ltd, an oilfield transportation service supplier in the Cold Lake, Alberta oil sands region, for $5.1 million. Included were Superior’s fleet of nine winch tractors, two bed trucks, one picker truck and 24 conventional trailers.

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