CALGARY, Alta. — The slowdown in oil and gas drilling activity in Western Canada during the fourth quarter resulted in a decline of revenue for Trimac, but the company has reduced its debt, maintained its average fleet age and has grown its revenue in Eastern Canada.
Operating earnings decreased $1.5 million in the fourth quarter. The company says it reduced administrative costs by $2.2 million and reduced its debt by $10.3 million to $82.8 million. It decreased capital expenditures by 40.5%, while still maintaining its average fleet age.
“The economic slowdown continued to negatively impact all of our segments in the fourth quarter with a 9.3% decrease in revenue and reduced income before income tax expense of 16.7%. However, from a balance sheet perspective, Trimac reduced its long-term debt by $10.3 million and increased working capital $6.9 million despite the revenue shortfalls,” said CEO Matt Faure.
“This was the direct result of the continued focus on operational excellence, which resulted in lower administration costs, reduced operating equipment and improved utilization. We finished the year with a strong balance sheet and earnings slightly below prior year despite a 5.1% decrease in revenue. The cost controls and process improvements implemented will allow us to continue lowering operating costs as we compete in the volatile markets across western Canada in 2016.”
Trimac is projecting demand for transportation services to remain relatively flat or slightly lower for 2016 and is not anticipating any real growth from customers in resource-based industries. It noted the weak Canadian dollar may boost transportation revenue for some commodities it hauls in Eastern Canada, as exports increased during the last half of 2015.
The company says 2016 will be another challenging year, and it will continue to remain diligent in managing costs while looking to achieve growth in segments where economic activity is improving.