CERF Inc., Calgary, Alberta, Canada-based equipment rental and oilfield rental company, posted CDN $10.69 million in third quarter revenue, compared to $15 million in the third quarter of 2014, a 28.8-percent decrease resulting from the decline in oil-and-natural gas prices. Still, for the first nine months of 2015, revenue is $37.64 million, compared to $37.45 million for the first nine months of 2014, a slight increase.
“The third quarter of 2015 was again characterized by its challenging market conditions,” said Wayne Wadley, president and CEO of CERF. “However, we continue to believe that our diversified businesses, cost management strategies and strong balance sheet will enable CERF to mitigate the effects of a protracted economic downturn. Over the past nine months, we have undertaken cost reduction initiatives which included reducing personnel in our Energy Service Division by 47 percent. We will continue to review the cost side of our business and focus on initiatives that allow us to maintain flexibility in the current environment.”
The Industrial Rentals Segment, including 4-Way Equipment Rentals, reported revenues of $3.5 million, a decline of 30 percent or $1.5 million compared to the same quarter in 2014. The decrease in rental revenues was primarily the result of reducing pricing because of increased competition in the Edmonton equipment rental market.
TRAC, the Energy Services division, reported revenues of $3 million, a 51-percent year-over-year plunge. Lower revenues resulted from the continuing low oil and gas price environment that has resulted in a 52-percent decrease in drilling rig utilization that negatively impacts TRAC’s utilization and day rates.
Management in the division reduced staff 50 percent, as well as labor hours, overtime, repair and maintenance, and discretionary spending.
CERF’s Waste Management Segment increased revenues 8 percent to $4.2 million.
The company expects continued pricing pressures in the Energy Services Division into the first quarter of 2016. It expects new aerial equipment inventory, introduced in the third quarter, to increase revenue according to customer demand in the fourth quarter, as well as solid heating equipment revenue.
“We remain cautiously optimistic regarding commitments made by Alberta’s new NDP government to increase infrastructure spending,” the company added. “Increased public works spending can be expected to benefit CERF favorably as rental products are needed by contractors.”