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Ceiba Energy Services Announces its Year-End 2016 Financial and Operating Results and 2017 Outlook

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Ceiba Energy Services Announces its Year-End 2016 Financial and Operating Results and 2017 Outlook

Ceiba Energy Services Announces its Year-End 2016 Financial and Operating Results and 2017 Outlook

CALGARY, ALBERTA--(Marketwired - Mar 8, 2017) - Ceiba Energy Services Inc. ("Ceiba" or the "Company") (TSX:CEB), a growing environmental fluids processing and disposal company, announces its year-end 2016 financial results. Ceiba has filed its Financial Statements and related Management's Discussion and Analysis for the year-ended December 31, 2016 on the Company's profile at www.sedar.com.

Ceiba has positioned itself as a growing energy services company with an ability to improve cash flow and profitability in 2017 and beyond. In a challenging year of low commodity prices and slower overall industry activity, Ceiba deployed growth capital to develop new facilities in strategic areas that will contribute to the Company's future growth:

  • Opened its Obed Class II facility in February 2016;
  • Opened its Athabasca Class 1B facility in March 2016 which contributed to nearly 20% of the Company's 2016 volumes;
  • Commissioned its Kaybob Class 1B facility in November 2016 (see further discussion below); and,
  • Repaid $7.3 million 12% convertible debentures at their maturity in July 2016.

The Company is reporting lower volumes and lower margins in the fourth quarter of 2016 compared to the fourth quarter of 2015. Ceiba received 87,000 m3 in volumes during the fourth quarter of 2016, a 26% reduction from the same period in 2015. Volume reductions were caused by slower industry activity and abnormally wet weather in Northwestern Alberta. Ceiba's Eastern Alberta facilities were affected by increased competition and lower oil sands activity.

For the full year, volumes were 381,000 m3, or down 13% compared to 2015. Year over year volume decreases at existing sites due to slower market activity were partially offset by the three new facilities opened in 2016 and a full-year of contributions from the Gordondale facility.

In November 2016, Ceiba announced the opening of its fourth Class 1B facility in the Fox Creek Area of Alberta. Market demand in the area remains strong, however injection expectations for the disposal well have not been met. Ceiba is planning to remediate the well in the second half of 2017.

Ceiba's near term focus for 2017 is to increase volumes, reduce costs and prudently manage capital spending. Early indications for Q1 2017 show increasing industry activity which is driving volume increases in the first two months of 2017 that are 45% higher than the first two months of 2016 and 30% higher than the first two months of Q4 2016. Additionally, the Company was recently awarded a four-year contract for disposal of specific oil sands related waste fluids, worth over $1,200,000 over the term of the contract, commencing March of 2017.

All tabular amounts are in CDN$ thousands except for per share amounts and where otherwise noted.

ANNUAL OPERATIONAL AND FINANCIAL HIGHLIGHTS

For the years ended December 31,
($millions unless noted) 2016 2015 % Change 2014
Total received volume (000's m3) 381 437 (13 %) 420
Revenue 7.8 7.8 - 6.8
Gross margin(1) 3.2 3.6 (11 %) 3.3
Gross margin %(1) 40 % 47 % (7 %) 48 %
Adjusted EBITDA(1) 1.2 1.6 (27 %) 0.9
Adjusted EBITDA(1)as a % of revenue 15 % 21 % (6 %) 13 %
Net loss and comprehensive loss (4.2 ) (2.3 ) (83 %) (12.8 )
Net loss per share, basic and fully diluted ($0.03 ) ($0.02 ) (50 %) ($0.13 )
Funds from (used in) operations 0.2 0.6 (67 %) (0.9 )
Total assets 34.6 37.6 (8 %) 35.7
Net working capital(1)
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