Entrec reported year-on-year revenue growth of 10 percent during the first quarter of 2019, but the company’s president and ceo John Stevens said revenue fell below the company’s expectations.
“Lower customer demand to start the year across many of our operating regions, combined with a very cold February in western Canada and North Dakota caused the majority of this shortfall. However, we finished off Q1 with a strong March and anticipate our revenue and financial results will improve as 2019 progresses,” Stevens said.
“The outlook for our US business continues to be very positive as we move through 2019. Growing demand for our services in the oil and gas sector has led to both increased activity levels as well as higher customer pricing.
“Assuming oil prices can be maintained at current levels or increase further in 2019, we should continue to see higher industry activity levels that should result in further improvements in profitability.”
Entrec has also expanded its operations in the USA to include Wyoming. Stevens said that this region is also driving demand for the company’s crane and transportation services.
The company’s outlook for western Canada, meanwhile, is cautious. Low oil and natural gas prices, pipeline constraints, rising carbon taxes and increasing regulatory requirements to achieve government approvals for large industrial projects are hampering the industry’s appetite for capital expenditure.
Looking ahead to the remainder of 2019 and 2020, Entrec expects the overall industry fundamentals to improve, which could lead to higher activity levels in western Canada as the year progresses.