A drilling company says its services didn’t even meet the lowest expectations because customers are keeping their spending tight. Precision Drilling reported a 76 per cent drop in profits for the first few months of the year. It made $24 million compared to last year’s $102 million first quarter profit.
“We have been able to mitigate the full impact of the industry slowdown through effective execution of Precision’s variable cost business model, preemptive fixed cost management and customer contract coverage on our Tier 1 asset base.” CEO Kevin Neveu says in a news release. “Despite the lower activity environment and revenue base, we achieved EBITDA margins of 32% in the quarter, compared to 35% in the first quarter of 2014.”
The Calgary-based company says it reached its peak in November 2014, but cut 14 per cent of its salaried workers and reduced headcount in the field by 2,500. It’s hoping the industry moves in a different direction.
“Should activity levels improve, Precision will respond as it has in the past and I am certain we will work to bring back many of our dedicated employees. We understand our people will distinguish us in the end and will continue to deliver the High Performance, High Value services our customers expect from Precision,” stated Neveu.
The company says industry spring break-up activity in Canada was 53 per cent below 2014 levels.
