Business
AKITA Drilling Ltd. Announces Second Quarter Earnings and Cash Flow
CALGARY , July 30, 2014 /CNW/ - AKITA Drilling Ltd.'s net income for the three months end...
About this update from Akita Drilling Ltd. Class A
[{"type":"text","content":"\n\nCALGARY, July 30, 2014 /CNW/ - AKITA Drilling Ltd.'s net income for the three months ended June 30, 2014 was $2,082,000 ($0.12 per share) on revenue of $28,365,000 compared to $2,757,000 ($0.15 per share) on revenue of $28,170,000 for the corresponding period in 2013.  Funds flow from operations for the quarter ended June 30, 2014 was $10,609,000 compared to $9,121,000 in the corresponding quarter in 2013.\n\nNet income for the six months ended June 30, 2014 was $12,231,000 ($0.68 per share) on revenue of $82,708,000.  Comparative figures for 2013 were net income of $15,252,000 ($0.85 per share) on revenue of $89,085,000.  Funds flow from operations for the January to June period in 2014 was $28,273,000 compared to $29,106,000 for the comparative period in 2013.\n\nDuring 2013 and 2014, the Company entered into forward foreign exchange contracts in order to mitigate foreign exchange exposure for capital purchases made outside of Canada.  In that regard, AKITA recorded an unrealized foreign exchange loss of $945,000 during the second quarter of 2014 (YTD 2014 - $647,000) which was partially offset by a realized foreign exchange gain of $376,000 during the second quarter of 2014 (YTD 2014 - $499,000).  The Company did not have similar foreign exchange exposures during the comparative periods during 2013.\n\nThe increase in operating days in the second quarter of 2014 compared to the corresponding quarter in 2013 (i.e., 1,220 in 2014 compared to 1,017 in 2013) was attributable to additional pad rig activity as well as having several conventional rigs working during this period.  Lower operating margins and higher depreciation expense along with the foreign currency hedge loss noted above resulted in lower net income in the second quarter of 2014 compared to the corresponding quarter in 2013.\n\nThe Company is continuing with its major capital projects that form the backbone of the largest capital program in AKITA's history.  In addition to two new build pad rigs under construction, the Company is refitting a recently purchased pad rig, upgrading an existing pad rig to increase its drilling capabilities and is in the final stages of construction and commissioning of its first slant pad rig.  Management anticipates that these additions and improvements to the fleet will result in meaningful...