CERF Inc., Canadian parent company to Alberta-based 4-Way Equipment Rental posted CDN $9.3 million in revenue during the second quarter (about U.S. $7 million), a 7.24-percent decline. The decrease was primarily the result of declines in the Industrial Rentals and Waste Management segments, partially offset by a $1.1 million increase from the company’s Oilfield Rentals segment, which benefited from the addition of the operations of Winalta, an oilfield accommodations firm, and the assets of Empire, an outfit that rents tools used in directional drilling applications.
Net income decreased from $300,000 in the second quarter of 2014 to a net loss of $2 million in the recently concluded quarter. The loss was largely based on weaker revenue resulting from fewer active drilling rigs, increased competition in the Edmonton construction rentals market, and a decrease in special waste volumes originating from the oil and gas sector.
“The second quarter of 2015 continued to be a challenging time for the energy industry,” said Wayne Wadley, president and CEO of CERF. “While the prolonged weakness in oil prices resulted in sharp year-over-year rig count declines, CERF continues to be well-positioned to withstand this current downturn. Our diversified business platforms continue to help mitigate the full impact of the lower energy price environment. We have prudently managed our assets, headcount and expenses in the context of these weak economic conditions. When coupled with our strong balance sheet, CERF is well positioned to weather this downturn and has the ability to capitalize on investment opportunities as they arise.”
Adjusted EBITDA for the quarter was $1.3 million, half of the EBITDA in the second quarter of 2014 when it was $2.6 million.
Industrial rental revenue declined by $0.5 million or 16 percent compared to the second quarter last year because of reduced rental day rate pricing caused by increased competition and decreased fleet utilization. CERF said some construction projects have been delayed because of the weakened economy.
4-Way Equipment Rentals, based in Edmonton, Alberta, is No. 75 on the RER 100.
