ProSep Posts 1Q10 Results
ProSep announced its financial results for the three-month period ended March 31, 2010. All amounts are reported in Canadian dollars unless otherwise stated.
- Recorded revenues of $9.4 million, a decrease of 29% when compared to $13.2 million for the corresponding period of 2009.
- Generated gross margin of $2.6 million (27% of revenues) compared to $3.2 million (24% of revenues) for the corresponding period of 2009.
- Recorded net loss of $1.3 million compared to a net loss of $2 million for the corresponding period of 2009.
- Concluded a $2.7 million equity financing to support working capital requirements
- Obtained an additional $3 million short-term credit facility to finance temporary working capital requirements.
- Announced approximately $11.6 million in new contracts during the quarter to supply process equipment to large national and international oil and gas producers.
- Announced its proprietary technology will be used at an important large-scale carbon capture testing facility owned by Statoil, Norske Shell and Gassnova.
- Sales backlog stood at $ 11.3 million at April 1, 2010.
- Announced in May the sale of an offshore water treatment solution to be installed on a Pemex Platform in the Gulf of Mexico.
"Our first quarter revenues reflect lower order intake levels experienced in the second half of last year. Encouragingly, oil and gas capital expenditure spending has picked-up since the start of 2010 and we are experiencing a significant increase in the level of quotations and are currently entertaining many promising proposals. We believe that our backlog should significantly improve in the latter half of this year and into 2011," said Jacques L. Drouin, President and CEO.
"As we enter a new economic cycle, ProSep faces strong competition. While continuing to focus on managing our costs, our objective is to accelerate the commercialization of our proprietary technologies in growing markets where we have a stronger competitive advantage such as produced water markets in the Gulf of Mexico, Middle East and South East Asia."
For the three-month period ended March 31, 2010, ProSep reported revenues of $9.4 million, a 29% decrease from $13.2 million recorded during the quarter ended March 31, 2009. Affected by residual weakness in upstream capital expenditure programs, delays in contracts as well as unfavorable exchange rates, the Company's US and Asia Pacific operations reported negative revenue growth during the quarter, offsetting a positive performance at European and Middle East operations.
ProSep's US operations generated revenues of $5.6 million during the quarter ended March 31, 2010, a decrease of 44% from $10 million reported in 2009. Lower sales levels are explained by lower order intake and unfavorable US currency exchange rate that affected revenues by $1.2 million. European and Middle East operations reported revenues of $2.2 million during the first quarter of 2010, an increase of 90% over revenues of $1.2 million reported in the corresponding period of 2009. This increase is explained by the $3.6 million order for a proprietary CTour produced water treatment for a water treatment system for an offshore redevelopment project located on the Norwegian Continental Shelf. Asia Pacific operations' revenues for the first quarter of 2010 were $1.6 million, a decrease of 28% when compared to $2.2 million in 2009. Delays in contract completion of fuel gas packages partly related to changes in orders and requisitioning has limited the operation's ability to recognize more revenues in the quarter. However, CAPEX programs remain strong in the region fueled by National Oil Companies which are looking to mitigate overall declining oil production and bolster gas reserves and production.