CERF Inc., Canadian parent company to Alberta-based 4-Way Equipment Rental posted CDN $9.3 million in revenue during the second quarter (about U.S. $7 million), a 7.24-percent decline. The decrease was primarily the result of declines in the Industrial Rentals and Waste Management segments, partially offset by a $1.1 million increase from the company’s Oilfield Rentals segment, which benefited from the addition of the operations of Winalta, an oilfield accommodations firm, and the assets of Empire, an outfit that rents tools used in directional drilling applications.
Net income decreased from $300,000 in the second quarter of 2014 to a net loss of $2 million in the recently concluded quarter. The loss was largely based on weaker revenue resulting from fewer active drilling rigs, increased competition in the Edmonton construction rentals market, and a decrease in special waste volumes originating from the oil and gas sector.
“The second quarter of 2015 continued to be a challenging time for the energy industry,” said Wayne Wadley, president and CEO of CERF. “While the prolonged weakness in oil prices resulted in sharp year-over-year rig count declines, CERF continues to be well-positioned to withstand this current downturn. Our diversified business platforms continue to help mitigate the full impact of the lower energy price environment. We have prudently managed our assets, headcount and expenses in the context of these weak economic conditions. When coupled with our strong balance sheet, CERF is well positioned to weather this downturn and has the ability to capitalize on investment opportunities as they arise.”
Adjusted EBITDA for the quarter was $1.3 million, half of the EBITDA in the second quarter of 2014 when it was $2.6 million.
Industrial rental revenue declined by $0.5 million or 16 percent compared to the second quarter last year because of reduced rental day rate pricing caused by increased competition and decreased fleet utilization. CERF said some construction projects have been delayed because of the weakened economy.
4-Way Equipment Rentals, based in Edmonton, Alberta, is No. 75 on the RER 100.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.