/R E P E A T -- Petrowest Corporation Announces Second Quarter 2014 Financial Results/

CALGARY, Aug. 13, 2014 /CNW/ - Petrowest Corporation ("Petrowest") (TSX:PRW) announced today its consolidated financial results for the three and six month periods ended June 30, 2014.

Rick Quigley, Chief Executive Officer, stated that "the financial results for the second quarter have historically been the weakest quarter of the year due to seasonal conditions.  However, despite these conditions and the fact that road bans came off later in the year compared to the prior year, the Company still managed to generate revenues of $55.4 million for the quarter, an increase of $6.1 million over the second quarter of 2013.  Adjusted EBITDA came in at $3.0 million for the quarter, a decrease from the $4.1 million in the second quarter of 2013. This decrease is primarily due to increased fuel and operating personnel costs, significant one time non-recurring business development costs and lower margins relating to the subcontractor work on the Highway 43 project. Also contributing to the lower Adjusted EBITDA were repair and maintenance costs (approximately $0.7 million over the comparable quarter in 2013) which were incurred in preparing our equipment for the third quarter, which is usually our most active. Even with the lower Adjusted EBITDA in the second quarter, our first half of the year results were still considerably ahead of the comparable period of 2013". Mr. Quigley further stated that "the Company was excited to complete the acquisition of Enviro-Mulch Land Clearing Solutions Ltd. during the quarter.  This vertically integrated acquisition truly allows Petrowest to be the 'first in' for oilfield and general construction services, while adding another highly qualified team to the Petrowest group".

FINANCIAL HIGHLIGHTS

In the three months ended June 30, 2014 compared to the same period in 2013, the Company:

• Reported revenue of $55.4 million, an increase of $6.1 million compared to the same quarter in 2013,
• Reported Adjusted EBITDA of $3.0 million compared to $4.1 million for the same quarter in 2013,
• Reported Adjusted EBITDA margin of 8.8% compared to 11.3% for the same quarter in 2013,
• On May 27, 2014, the Company acquired all of the issued and outstanding shares of Enviro-Mulch Land Clearing Solutions Ltd.

In the six months ended June 30, 2014 compared to the same period in 2013, the Company:

• Reported revenue of $116.5 million, an increase of $21.3 million compared to the same period in 2013,
• Reported Adjusted EBITDA of $14.1 million compared to $10.4 million for the same period in 2013,
• Reported Adjusted EBITDA margin of 12.1% compared to 10.9% in the same period in 2013,
• Completed a significant amount of the crushing sub-contracts awarded on the expansion of the Highway 63 project.

FINANCIAL RESULTS

		Three months ended June 30,		Six months ended June 30,
($000's)		2014	2013	2014	2013
Revenue		55,439	49,272	116,499	95,198
Operating expense		50,540	43,697	98,663	81,945
Gross margin		4,899	5,575	17,836	13,253
General and administrative		1,863	1,456	3,747	2,886
Adjusted EBITDA		3,036	4,119	14,089	10,367
Amortization of property and equipment		4,843	5,177	9,834	9,905
Amortization of intangible assets		89	85	288	261
Share-based compensation		337	198	645	431
Gain on disposal of property and equipment		(97)	(267)	(144)	(164)
Foreign exchange loss		-	-	-	642
Operating (loss) profit		(2,136)	(1,074)	3,466	(708)
Net finance expense		1,071	2,271	2,138	8,076
Loss on fair value of financial instruments		-	2	-	6
Net (loss) income and comprehensive (loss) income before income tax		(3,207)	(3,347)	1,328	(8,790)
Deferred income tax (recovery) expense		(970)	(22)	39	(1,117)
Net and comprehensive (loss) income		(2,237)	(3,369)	1,289	(7,673)
Total assets		166,466	134,840	166,466	134,840
Total long-term liabilities		62,920	64,373	62,920	64,373
Funds from Operations		2,106	2,359	12,231	5,867

SELECTED FINANCIAL INFORMATION AND NON-IFRS MEASURES

Selected financial information for the three and six month periods ended June 30, 2014 and 2013 is set out above and includes the following non-IFRS financial measures: Gross margin, Gross margin percentage, Adjusted EBITDA, Adjusted EBITDA margin percentage and Funds from Operations. This information should be read in conjunction with the consolidated financial statements for the three and six months ended June 30, 2014 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.

FORWARD LOOKING INFORMATION

This news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are identified by their use of terms and  phrases such as "anticipate",  "achievable",  "believe", "expect",  "estimate",  "plan",  "intend",  "project",  "may",  "should",  "could",  "predict",  "will",  or similar words suggesting future outcomes or language suggesting an outlook. 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 performance. 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

Please contact Richard Quigley, President and Chief Executive Officer, at [phone], or Lloyd Wiggins, Chief Financial Officer, at [phone], or [email protected].