Petrowest Corporation Announces Second Quarter 2013 Financial Results and New Contract Award for Civil Division

CALGARY, Aug. 13, 2013 /CNW/ - Petrowest Corporation (TSX:PRW) announced today its consolidated financial results for the three and six month periods ended June 30, 2013 and the award of a new contract for the Civil division.

Rick Quigley, Chief Executive Officer, stated that "the financial results for the second quarter of 2013 were significantly affected by unseasonably wet weather which affected all sectors in which we operate. There was substantial lost time as a result of these conditions. While these conditions affected revenue to a degree, the margins were impacted to a much greater extent, as additional costs were incurred to stop and recommence projects. The interruptions resulted in significant unrecoverable costs, including water removal and increased labour and machine time, negatively affecting margins. The wet weather impaired our ability to execute on most of our projects and caused the deferral of committed work to subsequent periods." Mr. Quigley added that he "remains encouraged by the amount of backlog currently in place and the activity levels in the areas we operate. We expect a return to historical margins with a return to normal operating conditions."

FINANCIAL HIGHLIGHTS

For the three months ended June 30, 2013 compared to the same period of 2012 the Company:

• Reported revenue of $49.3 million, an increase of $5.4 million compared to the same quarter in 2012
• Reported adjusted EBITDA margin of 8.0% compared to 18.5% in the same quarter in 2012

For the six months ended June 30, 2013 compared to the same period of 2012 the Company:

• Reported revenue of $95.2 million, an increase of $0.5 million compared to the same period in 2012
• Reported adjusted EBITDA margin of 10.4% compared to 16.7% in the same period in 2012
• Commenced construction on the $78.0 million Highway 43 twinning project

FINANCIAL RESULTS

						Three months ended June 30					Six months ended June 30
(In thousands of Canadian dollars)						2013	2012				2013	2,012
Revenue						49,272	43,900				95,198	94,674
Operating expense						(43,697)	(34,482)				(81,945)	(75,839)
Gross margin						5,575	9,418				13,253	18,835
General and administrative						(1,654)	(1,308)				(3,317)	(3,009)
Adjusted EBITDA						3,921	8,110				9,936	15,826
Amortization of property and equipment						(5,177)	(3,981)				(9,905)	(7,768)
Amortization of intangible assets						(85)	(215)				(261)	(556)
Gain on disposal of property and equipment						267	120				164	19
Foreign exchange gain (loss)						-	(806)				(642)	15
Operating profit (loss)						(1,074)	3,228				(708)	7,768
Net finance expense						(2,271)	(2,660)				(8,078)	(5,279)
Loss of fair value of financial instruments						(2)	(13)				(6)	(270)
Net income (loss) and comprehensive income (loss) before income tax						(3,347)	555				(8,790)	1,987
Deferred income tax recovery (expense)						(22)	2,778				1,117	2,778
Net and comprehensive income (loss)						(3,369)	3,333				(7,673)	4,765
Total assets						134,682	111,735
Total long-term liabilities						64,373	56,177
Net cash generated from operating activities						4,534	3,010				7,423	(1,385)

SELECTED FINANCIAL INFORMATION AND NON-IFRS MEASURES

Selected financial information for the three and six month periods ended June 30, 2013 and 2012 is set out above and includes the following non-IFRS financial measures: Gross margin, Gross margin percentage, adjusted EBITDA and adjusted EBITDA margin percentage. This information should be read in conjunction with the consolidated financial statements for the three and six month periods ended June 30, 2013 and the Company's Management, Discussion and Analysis ("MD&A"), available under the Company's profile on the SEDAR website at www.sedar.com. Further information respecting the non-IFRS financial measures is contained in the Company's MD&A.

CONTRACT AWARD

The Civil division is to provide aggregate crushing for the successful consortium bid for the next phase of the expansion of Highway 63, the main highway connecting Edmonton to Fort McMurray, Alberta. Work is expected to commence in the fourth quarter of 2013 and be completed in 2014. The value of the contract is expected to be $13.5 million.

OFFICE MOVE

Petrowest also announced that its corporate head office in Calgary will relocate to Suite 800, 407 - 2^nd Street S.W., Calgary, Alberta, T2P 2Y3, effective September 1, 2013.

FORWARD LOOKING INFORMATION

This news release contains forward-looking statements regarding future levels of activity by the Company and by industry in the areas in which the Company operates. Forward-looking statements and information are based on Petrowest's current beliefs as well as assumptions made by and information currently available to Petrowest concerning anticipated business conditions and normal weather conditions. Although management of Petrowest considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements are subject to many external variables that are beyond Petrowest's control, such as fluctuating prices for crude oil and natural gas, changes in drilling activity, and general local and global economic, political, business and weather conditions. If any of these or other uncertainties materialize, the actual results of Petrowest may vary materially from those expected.

ABOUT PETROWEST

Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia. 

SOURCE: Petrowest Corporation

Richard Quigley, President and Chief Executive Officer, at [phone], or Ian Hogg, Vice President, Corporate Affairs, at [phone], or Lloyd Wiggins, Chief Financial Officer, at [phone], or [email protected]