VANCOUVER, British Columbia, June 26, 2020 (GLOBE NEWSWIRE) -- Hanwei Energy Services Corp. (TSX: HE) (“Hanwei” or the “Company”) today reported its financial results for the year ended March 31, 2020 (the “2020 Fiscal Year”). All amounts are in Canadian Dollars unless otherwise noted.
Financial and Operating Update
Hanwei's principal business operations are in two complementary segments of the oil and gas industry as an operator and developer of its own oil and gas assets in Canada and as a specialized pipe supplier to the industry, both in Canada and internationally. For the financial year ended March 31, 2020, a summary of the Company’s annual financial results are as follows:
Summary of the 2020 Fiscal Year Financial Results from Continuing Operations | ||||||||||||||||
in thousands of CDN$ except percentages and per share data | ||||||||||||||||
FY2020 | FY2019 | |||||||||||||||
Pipe | Oil & Gas | Corporate | Total | Pipe | Oil & Gas | Corporate | Total | |||||||||
Revenue | 8,310 | 1,986 | - | 10,296 | 7,746 | 2,964 | - | 10,710 | ||||||||
Adjusted EBITDA | 759 | (967 | ) | (696 | ) | (904 | ) | 807 | (533 | ) | (808 | ) | (534 | ) | ||
Adjusted EBITDA Margin | 9 | % | -49 | % | n/a | -9 | % | 10 | % | -18 | % | n/a | -5 | % | ||
Adjusted EBITDA per share | 0.00 | (0.00 | ) | (0.00 | ) | (0.00 | ) | 0.00 | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||
Net Income (loss) | 777 | (3,310 | ) | (935 | ) | (5,022 | ) | 31 | (16,083 | ) | (1,285 | ) | (17,337 | ) | ||
Diluted EPS (Basic and diluted) | 0.00 | (0.02 | ) | (0.01 | ) | (0.03 | ) | 0.00 | (0.08 | ) | (0.01 | ) | (0.09 | ) | ||
Weighted average number of outstanding shares | Basic | 194,201,234 | Basic | 194,201,234 | ||||||||||||
Diluted | 194,201,234 | Diluted | 194,201,234 | |||||||||||||
Update on COVID-19 Impact
Global commodity prices have declined significantly due to a collapse in demand attributed to COVID-19 in combination with an oversupply of oil due to disputes between major oil producing countries. With the low and volatile commodity price environment due to COVID-19, subsequent to the year-end the Company temporarily shut-in part of its production that was considered uneconomic at low crude oil prices.
The Company’s FRP pipe manufacturing plant in China was closed for most of the last quarter of the 2020 Fiscal Year due to the Chinese New Year in January 2020 and COVID-19 restrictions put in place by the Chinese government. The plant started reopening in early March 2020 with a graduated, multi-phase plan taking into account health and safety protocols particular to the COVID-19 situation.
The COVID-19 situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company is not known at this time. Estimates and judgments made by management in the preparation of our MD&A and financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period.
Oil and Gas Reserves
Remaining Reserves | Net Present Values After Tax | ||||||||||||||
Mboe; After Tax (M$) | Company | Company | @ 0% | @ 5.0% | @ 10.0% | @ 15.0% | @ 20.0% | ||||||||
Gross | Net | M$ | M$ | M$ | M$ | M$ | |||||||||
2020 Reserves Report | |||||||||||||||
Total Proved | 702 | 591 | 14,221 | 9,410 | 6,734 | 5,078 | 3,968 | ||||||||
Total Proved + Probable | 1,300 | 1,128 | 24,038 | 14,756 | 10,044 | 7,232 | 5,376 | ||||||||
2019 Reserves Report | |||||||||||||||
Total Proved | 681 | 585 | 15,552 | 11,931 | 9,322 | 7,419 | 6,001 | ||||||||
Total Proved + Probable | 1,110 | 956 | 24,418 | 17,655 | 13,087 | 9,913 | 7,636 | ||||||||
Variance | |||||||||||||||
Total Proved | 21 | 6 | (1,331 | ) | (2,521 | ) | (2,588 | ) | (2,341 | ) | (2,033 | ) | |||
YoY Variance % | 3.1 | % | 1.0 | % | -8.6 | % | -21.1 | % | -27.8 | % | -31.6 | % | -33.9 | % | |
Total Proved + Probable | 190 | 172 | (380 | ) | (2,899 | ) | (3,043 | ) | (2,681 | ) | (2,260 | ) | |||
YoY Variance % | 17.1 | % | 18.0 | % | -1.6 | % | -16.4 | % | -23.3 | % | -27.0 | % | -29.6 | % | |
About Hanwei Energy Services Corp.
Hanwei Energy Services Corp.’s principal business operations are in two complementary key segments of the oil and gas industry as both an equipment supplier to the industry (as a manufacturer of high pressure, fiberglass reinforced plastic (“FRP”) pipe products serving energy customers in the global energy market) and as oil and gas producer with properties in Alberta and joint venture interests in Manitoba.
For more information, please contact:
Graham Kwan
Executive Vice President, Strategic Development and Corporate Affairs
604-685-2239
gkwan@hanweienergy.com
Irene Mai
Chief Financial Officer
604-685-2239
imai@hanweienergy.com
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
FORWARD-LOOKING INFORMATION
Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company’s Annual Information Form dated June 25, 2020 and Management Discussion and Analysis for the year ended March 31, 2020 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company’s expectations as of the date of this press release.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.