Red Deer, Canada – August 13, 2012 – High Arctic Energy Services Inc. (TSX: HWO) (“High Arctic” or the “Company”) today announced its operating and financial results for the second quarter of 2012.
High Arctic continued its strong year over year growth in revenue, EBITDA and net earnings in the second quarter of 2012. Adjusted EBITDA increased 33.3% to $5.2 million in the quarter and by 35.4% to $19.5 million for the six months to June 30 as compared to the same periods of last year.
Highlights
- Adjusted EBITDA increased 33.3% to $5.2 million in the quarter and by 35.4% to $19.5 million for the six months to June 30 as compared to the same periods of last year. Papua New Guinea generated higher revenue and contributed to the strong improvements in profitability in the quarter as the Company continued to benefit from the capital additions made during 2011.
- Net earnings for the quarter and six months improved to $5.7 million and $16.4 million, respectively, compared to earnings (loss) of $(0.1) million and $7.2 million in the same periods for 2011. The 2012 net earnings include the benefit of a $5.0 million tax adjustment booked in the second quarter.
- Consolidated revenue for the second quarter increased 18.9% to $29.6 million compared to $24.9 million for the quarter last year. Year to date revenues of $71.8 million are up 18.1% compared to 2011.
- Consolidated operating margins improved to 25% for the quarter from 23.7% in 2011 and to 33.3% for 2012 year to date compared to 30.3% last year. This result is indicative of improved day rates in Canada and the strong returns generated in 2012 on capital invested in new rental equipment during 2011.
- The growth in revenue for the quarter was driven by activity in PNG where the second quarter revenue was $25.1 million compared to $20.5 million in 2011, primarily from the benefit of Rig 102 operating throughout the quarter and growth in the matting and equipment rental business. Year to date revenue in PNG of $48.6 million is up 19.1%.
- Revenue for Canada was relatively flat improving slightly to $4.5 million for the quarter compared to $4.4 million in 2011. The quarter saw some reduction in activity levels in the core snubbing business due largely to weather conditions, but benefited from the start up during June of a 250K UB unit that generated $0.5 million of revenue during the quarter. Year to date, Canadian revenue was $23.2 million in 2012 compared to $20.0 million driven by strong activity levels during the first quarter in the liquids rich natural gas plays in Alberta and British Columbia.
- At June 30, 2012, the Company had $27.6 million of cash on hand, well in excess of the total debt of $14.8 million. The Company continues to generate strong cash flows from its operations. For the second quarter, High Arctic generated $3.4 million (2011- $2.7million) of cash flows provided by operations and $16.8 million (2011 – $13.1 million) year to date. The 12 months trailing Adjusted EBITDA is $38.4 million at June 30, 2012 compared to $31.9 million for the 12 months ended June 30, 2011.
- As a result of its strong financial position, High Arctic instituted a monthly dividend with the first monthly dividend of $0.01 per share paid on June 14, 2012. At that monthly rate, the annual dividend would total $6.0 million, which should leave the Company with most of its current operating cash flow available for investment in its business.
“We have continued to execute on our business plan during 2012 as demonstrated by our strong growth in revenue and EBITDA” commented Bruce Thiessen, Chief Executive Officer of High Arctic. “We are seeing more opportunities in PNG where the Company has already committed $11.3 million in 2012 for growth capital. That matches the total budgeted amount for 2012 resulting in the board of directors approving a further $6 million for the 2012 PNG capital budget to take advantage of the strong demand for our services in the country. The benefits from these new investments will start to accrue in the fourth quarter of 2012 as the new equipment is put into service.”
Further Information
A full copy of High Arctic’s third quarter results including Management’s Discussion and Analysis, Consolidated Financial Statements and Notes to the Consolidated Financial Statements can be found on the Investor Relations page of High Arctic’s website haes.ca or at www.sedar.com.
Dennis Sykora
Executive Vice President and General Counsel
Phone: 403 340 9825
Email: dennis.sykora@dev.haes.ca
[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][fusion_alert type=”error”]NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW[/fusion_alert]
[fusion_button color=”lightgray” size=”small” gradient1=”” gradient2=”” link=”http://dev.haes.ca/wp-content/uploads/HAES-Press-Release-2012-08-13.pdf” target=”blank”]Download this News Release[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]