The company said that the programme consists of growth capital expenditures of CAN34m and CAN12m in maintenance capital expenditures. Entrec also announced the appointment of John M Stevens as its president and CEO.
The company said that the 2014 growth capital expenditures would be specifically focused on growing its mobile crane capabilities. Entrec believe that continued investment in this area would increase access to the recurring onsite maintenance, repair and operation support work in the Alberta oil sands region as well as industrial construction work occurring in both the oil sands and in Northwest BC.
The 2014 growth capital expenditure will see CAN27m spent on cranes and CAN5m on heavy haul transportation. This includes the purchase of CAN6.5m worth of crane rental units. Entrec said that these machines carried favourable purchase options, allowing it to apply much of its previous rental payments against the purchase price.
Entrec intends to fund its 2014 capital expenditure program from its credit facilities, finance leases and cash from operating activities. The firm stressed that it also expects to have the flexibility to increase its capital expenditure program throughout 2014 should customer demand warrant it. Entrec does not believe it will need to raise any additional equity to fund the 2014 programme.
The company’s 2013 capital expenditure program was approximately CAN59m, subject to final year-end adjustments. This consisted of CAN53m in growth capital expenditures and CAN6m in maintenance. Crane equipment purchases accounted for approximately CAN36m in 2013 with the remainder directed to tractors and heavy haul trailers, as well as to other support equipment. The company said that last year its total net debt was approximately CAN131m subject to final year-end adjustments.
Describing the outlook for 2014 Entrec said that based on current expectations for future business activity it estimated that revenue for the year could range between CAN250m and CAN270m, an increase from last year’s total of CAN213m. The firm said that it expects revenue levels to trend upward throughout 2014 as project work begins to ramp up and utilisation levels rise.
Entrec also believes that oil sands demand will increase in the beginning of the first quarter of 2014 and would continue to gain momentum as the year progressed. Large heavy haul transportation contracts awarded to Entrec in the first half of 2013 would commence in the first and second quarters of 2014 and continue through 2017. The firm added that it was also working with oil sands customers on several large crane and heavy haul transportation projects that will commence at different times throughout the 2014 year.
