Environmental services company Newalta has released its fourth quarter results. The company says the results were below management's expectations as outlined in its Q3 2012 outlook, primarily due to the following key factors:
“Sharp decline in recovered crude oil and base oil prices in the latter part of the quarter, directly impacting our results. Our pricing for conventional and heavy oil fell dramatically from October over the latter part of the quarter, by 22 per cent and 37 per cent, respectively, due to the wider differentials experienced across the Western Canadian Sedimentary Basin. The prices we receive for conventional and heavy oil are tied to Edmonton Par and Bow River. Further, Motiva (base oil) prices followed a similar pattern declining by 7 per cent during the quarter.”
Results of Q4 2012 Compared to Q4 2011
- Revenue increased 8 per cent, Adjusted EBITDA and net earnings declined 9 per cent and 32 per cent, respectively. Lower prices for recovered productsimpacted Adjusted EBITDA by $5.3 million;
- Revenue and gross profit from Facilities were $122.9 million and $21.7 million, down one per cent and 17 per cent, respectively. Active rigs decreased by 28 per cent and meters drilled were down 20 per cent. Cost efficiencies realized in the quarter at our Western Facilities were offset by lower oilfield activity and the impact of lower recovered product prices. Lower sales volumes and increased procurement costs at Ville Ste-Catherine also impacted results year-over-year;
- Onsite revenue and gross profit in the quarter grew 26 per cent and 5 per cent,respectively, to $75.5 million and $17.3 million. Strong demand for our contract and project services was impacted by reduced drilling activityand lower recovered oil prices;
- Adjusted SG&A (SG&A before stock-based compensation and amortization) was flat compared to last year at $19.5 million.
See the financial highlights here