November 17 - Entrec Corporation has recorded a 30 percent year-on-year decrease in revenue for the third quarter of 2015, down from USD58.9 million in 2014 to USD41.2 million in the same period this year.
On a year-to-date basis, revenue declined by 25 percent to USD130.5 million from USD173.8 million in 2014.
Entrec explained that it experienced downward pricing pressure from its customers as they worked to reduce operating and capital expenditures, against a backdrop of declining crude oil prices and a depressed natural gas environment. Entrec estimates that these pricing reductions negatively impacted revenue by approximately 10 to 15 percent.
Due to the declining oil price, Entrec noted that customer pricing and activity levels in the oil and gas industry for both cranes and specialised transportation services has been negatively affected.
The company added that there also remains significant uncertainty as to the magnitude and timing of any future recovery in oil and natural gas prices, and doubt over how future changes in these prices will impact activity levels in the oil and gas industry and in particular the Alberta oil sands region.
In light of this situation, the company says that it has significantly curtailed future capital expenditures until the business outlook improves.
Given the uncertainties, Entrec's outlook remains weak for both the remainder of 2015 and 2016. Ongoing downward pricing pressure from customers, along with lower demand for the company's services supporting oil and natural gas exploration and production activities, will continue to negatively impact Entrec's financial results.
"Over the longer term, our overall competitive position continues to be positive," said Entrec president and ceo John M. Stevens. "Despite short-term uncertainties and challenges, we are well-positioned geographically, with the right equipment fleet, and a complete range of crane and specialised transportation services in each of our key markets across western Canada and in North Dakota."
"While we expect the remainder of 2015 and 2016 will continue to be a challenging period from an operating perspective, we continue to aggressively manage our costs, and remain well-positioned to capture future growth opportunities as industry fundamentals improve."