VANCOUVER, British Columbia, Feb. 11, 2023 (GLOBE NEWSWIRE) — Hanwei Energy Services Corp. (TSX: HE) (“Hanwei” or the “Company”), today reported its financial results for the third quarter and nine months ended December 31, 2023 (“Q3 2023” and “YTD”). All amounts are in Canadian Dollars unless otherwise noted.
Financial and Operating Update
Prior to the sale of its oil & gas business and FRP pipe business, Hanwei’s principal business operations are in two segments of the oil and gas industry as an operator and developer of its oil and gas assets in Canada and as a specialized pipe supplier internationally.
Q3 2023
No revenues were recorded for Q3 2023 due to the divestment of its FRP pipe business as of October 1, 2023 and divestment of its oil and gas business as of August 1, 2023, compared to $3.21 million for the same quarter of the prior year.
In January 2023, the Company completed the sale of its FRP pipe business with October 1, 2023 as the transaction effective date; therefore, no revenues, gross profit and expenses related were recognized in Q3 2023. The Company recognized a gain of $80,000 and cumulative foreign exchange gain of $13.51 million on the sale of its FRP pipe business.
Adjusted EBITDA for Q3 2023 was negative $102,000 as a result of Adjusted EBITDA attributable to FRP pipe business and oil & gas business were excluded, as compared to Adjusted EBITDA of negative $109,000 for the same quarter in the prior year.
The Company made a profit of $13.42 million in Q3 2023 as compared to a net income of $0.18 million in the quarter of the prior year. The substantial difference was mainly due to the gain of $80,000 and the reclassification of cumulative translation exchange gain of $13.51 million as finance income on sale of the Company’s FRP pipe business.
Nine months ended December 31, 2023
YTD total revenues were $3.21 million, a 40% decrease from prior year’s revenues of $5.32 million.
- YTD FRP pipe sales totalled $2.55 million versus $4.56 million for the same period of the prior year. The decrease of $2.01 million was mainly because of the divestment of FRP pipe business as mentioned before and the timing of sales orders.
- YTD oil & gas business revenue totaled $0.66 million as compared to $0.76 million for the same period in the prior year and the decrease was because only 4 months’ revenue was included in this period, the effect of which was partially offset by the improved monthly production volumes and higher commodity prices.
YTD Adjusted EBITDA was negative $0.54 million, an improvement of $0.67 million from negative $1.21 million for the same period of the prior year mainly because YTD Adjusted EBITDA from oil and gas business had an improvement of $0.78 million as compared to the same period in the prior year.
YTD net income was $13.32 million as compared to a loss of $1.70 million for the same period of the prior year. The significant difference was mainly due to the gain of $1.65 million on sale of the Company’s subsidiaries and the reclassification of cumulative translation exchange gain of $13.51 million as finance income as previously stated.
At the end of December 2023, the Company’s current ratio (current assets divided by current liabilities) was 1.07.
About Hanwei Energy Services Corp.
Hanwei’s principal business is the identification and evaluation of assets or businesses for future merger and acquisition after the sale of its oil & gas business and FRP pipe business.
For more information, please contact:
Mary Ma
Chief Financial Officer
604-685-2239
[email protected]
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 AND NON-GAAP MEASURES
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 24, 2023, and Management Discussion and Analysis for the year ended March 31, 2023, 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.
