- Calgary-based Precision Drilling (PD) joins a growing list of other resource and energy-based companies that have had a tough second quarter
- For the three months ending June 30, the company reported a 254 per cent increase in net loss, from a loss of C$13.8 million in the second quarter of 2019 to a loss of $48.9 million this year
- Revenue also fell from more than $359 million in 2019 to just over $190 million this year
- The underwhelming results were driven by a sweeping drop in demand for oil, which has led to a significant over-supply in the market
- Precision Drilling (PD) is currently steady at 87 cents per share
Calgary-based Precision Drilling (PD) joins a growing list of other resource and energy-based companies that have had a tough second quarter.
For the three months ending June 30, 2020, the oil and gas service provider reported a 254 per cent increase in net loss, from a loss of C$13.8 million in the second quarter of 2019 to a loss of $48.9 million this year.
Revenue for the period also fell by 47 per cent, more than $359 million in 2019 to just over $190 million.
The decline in financial performance comes off the back of global travel bans, self-imposed quarantine periods and social distancing, which in turn led to a significant economic slowdown and decreased demand for oil.
Between the substantial oversupply and, in many cases, government-mandated suspensions to operations, energy companies and service providers have seen a substantial downturn in business.
Kevin Neveu, President and CEO of Precision Drilling, said the immediate steps the company took at the outbreak of the pandemic have strengthened its resilience.
“During the quarter, we executed structural cost reductions beyond those previously announced, which we expect will lead to an additional $14 million in annualised savings.
“We expect these cash preservation measures, combined with capital expenditure reductions and Canadian wage subsidy program, will reduce total 2020 cash outflows by up to $150 million, an increase from our previously communicated target of over $100 million,” he added.
The second quarter results follow a similarly disappointing performance in the first quarter of the year.
Total revenue for the quarter ending March 31 was down 12.6 per cent to $379 million, compared to $434 million in the same period last year. Operating earnings also dropped by 63.6 per cent from $62 million to $22.5 million.
Precision Drilling (PD) is currently steady at 87 cents per share at 2:15pm EDT.