CALGARY, April 29, 2016 /CNW/ – Gemini Corporation (GKX-TSXV) today announced its financial results for the fiscal year ended December 31, 2015.
Gemini experienced very mixed results in 2015. Revenue increased 16% to a record $167 million from $144 million in 2014. This was driven principally by the rail loading terminal project that commenced in September, 2014 and was completed in the fourth quarter of 2015. The facility has been commissioned and tested with operating results exceeding the designed performance targets. Although this project was successful in driving revenue, there were significant cost overruns on the facility that seriously impaired profitability.
Gross profit for 2015 was profoundly impacted by the cost overruns on the rail loading terminal project, which resulted in negative margins for the Field Solutions segment. The majority of the excess costs incurred on this project were related to the site civil work and construction of the facility. Project commencement was delayed in 2014 and the schedule lengthened into 2015, with winter construction, and other construction challenges resulting in significant unplanned incremental costs being incurred in 2015.
The net loss for 2015 was $17.2 million (22¢ per share) compared to the net earnings of $3.0 million (5¢ per share) in 2014. The fourth quarter loss was $3.8 million (5¢ per share) compared to net earnings of $1.5 million (2¢ per share) in 2014. Non-cash goodwill impairment charges of $2.3 million for 2015 and $2.0 million in the fourth quarter were recognized due to the current challenging market conditions.
Looking beyond the cost challenges of the rail loading terminal project, the Corporation’s fabrication, field projects and environmental business units all performed well in relation to the challenging conditions that existed throughout 2015 in the oil and gas services market. The fabrication operations in particular, have been engaged to construct modules for some of the most prominent projects in Alberta at the present time. Their reputation for quality and on-time delivery is generating increasing opportunities for this business unit.
The ongoing decline of commodity prices has created significant pressure to reduce costs throughout the oil and gas industry. The Corporation has taken action to align costs to revenue by reducing staff, pay rates and other variable and fixed costs. Management is monitoring industry information carefully to position the organization for success as the market stabilizes and begins to recover.
“Downsizing has occurred in all aspects of our business as the drive for efficiency, cost effectiveness and smart technical and operational solutions for our clients becomes paramount”, stated Gemini’s newly appointed President and CEO, Peter Sametz. “We have excellent personnel at our Ponoka fabrication shop, our construction and maintenance group located in Fort Saskatchewan, and our environmental and regulatory groups in Calgary and Fort St. John. All of these units are busy and developing new business in this difficult environment. We remain optimistic that we will come out of the current economic downturn stronger, nimbler and more efficient.”
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About Gemini Corporation
Gemini Corporation is a professional services firm that provides engineering, regulatory, fabrication, installation and maintenance solutions for clients through stand-alone or integrated service delivery models. For more than 30 years, Gemini has been harnessing the energy of its staff and clients to power innovation in conventional and unconventional oil and gas, in-situ heavy oil and industrial facilities across western Canada. Our integrated design-build project delivery model differentiates Gemini and provides tremendous value-added benefits for clients, such as constructability advice at the design phase, schedule compression and one point of accountability.
Shares of Gemini trade on the TSX Venture Exchange under the symbol “GKX”. For more information about the Corporation and its services, go to www.geminicorp.ca. Gemini’s 2015 annual financial report will be filed with SEDAR at http://www.sedar.com on April 29, 2016.
This news release may contain forward looking information that represents Gemini’s internal projections, expectations, estimates or beliefs concerning, among other things, future operating results and various components thereof or Gemini’s future economic performance. All statements other than the statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expects”, “projects”, “plans”, “anticipates”, and similar expressions. The projections, estimates and beliefs contained in such forward-looking statements are based on management’s assumptions relating to Gemini’s performance and competition within the sectors in which it competes, the continuation of the current regulatory and tax regimes in the jurisdictions in which Gemini operates, and necessarily involve known and unknown risks and uncertainties, including risks and assumptions relating to client service demand, field service costs, labour rates, and other factors that may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted or suggested. The Corporation does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Gemini Corporation