Petrowest consolidates
On November12, 2014 Petrowest released it's third quarter and nine month results after purchasing three small companies in the oil and gas service industry.It purchased a company called Trans Carrier and Trans Carrier Rentals as well as a company called CJM Trucking. All are located in the Grand Prairie,Alberta or northeastern British Columbia area.Lastly it purchased a company called Enviro-Mulch and Cleaning Solutions.The effect of this is that it increased Petrowest's synergies and service offerings; it also increased revenue by $16 million or almost 25% to $90 million.However financial charges caused a small decrease in EBITDA from $14.6 million to $13.5 million.The new companies were obtained by having a new equity issue of 18.4 million shares at a price of $1.25 a share for proceeds of $23 million.It also increased it's operating credit facility to $40 million and extended it's maturity date to 2017.
Nine month performance
Revenue increased for the third quarter by 25 to 30% and for nine months increased by around 25%.While adjusted EBITDA increased to $28 million or by about 10%.Petrowest still is paying off some financial charges related to it's three 100% owned acquisitions.So the revenue increases have not translated completely into EBITDA gains yet.There may be some more non-cash items to pass through in Q4. So expect Q4 to be very similar to Q3; good increases in revenue on a year over year basis and small changes in EBITDA.But this also diversifies Petrowest somewhat as it now will not rely solely on one kind of business.This reduces somewhat the downside risks on Petrowest.This blog predicts that there will be increases in EBITDA for 2015.Petrowest has traditionally had lower earnings in the first and second quarters and this will improve revenues and EBITDA for these two quarters likely.This will put Petrowest in the $40 to $50 million EBITDA range for it's annual EBITDA.And that should produce annual earnings per share of about $.25 to $.28 .That will make it one of the cheapest oil service stocks on the TSX, especially trading at $.90 to $.95 per share. send comments or consultant invitations to this blog
Nine month performance
Revenue increased for the third quarter by 25 to 30% and for nine months increased by around 25%.While adjusted EBITDA increased to $28 million or by about 10%.Petrowest still is paying off some financial charges related to it's three 100% owned acquisitions.So the revenue increases have not translated completely into EBITDA gains yet.There may be some more non-cash items to pass through in Q4. So expect Q4 to be very similar to Q3; good increases in revenue on a year over year basis and small changes in EBITDA.But this also diversifies Petrowest somewhat as it now will not rely solely on one kind of business.This reduces somewhat the downside risks on Petrowest.This blog predicts that there will be increases in EBITDA for 2015.Petrowest has traditionally had lower earnings in the first and second quarters and this will improve revenues and EBITDA for these two quarters likely.This will put Petrowest in the $40 to $50 million EBITDA range for it's annual EBITDA.And that should produce annual earnings per share of about $.25 to $.28 .That will make it one of the cheapest oil service stocks on the TSX, especially trading at $.90 to $.95 per share. send comments or consultant invitations to this blog
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