STEP Energy Services reports wage, job, spending cuts with lower Q1 earnings

STEP Energy Services reports wage, job, spending cuts with lower Q1 earnings

CALGARY — STEP Energy Services Ltd. is reporting job cuts, wage rollbacks, a reduction of manned equipment and reduced capital spending as it adjusts to lower oilfield activity during the COVID-19 pandemic.

The Calgary-based company says adjusted earnings before interest, taxes, depreciation and amortization fell by 12 per cent to $22.8 million in the three months ended March 31, despite a 10 per cent increase in consolidated revenue to $194 million.

It attributes the decrease to a $2.5 million provision for bad debt and $1.9 million in severance for unspecified workforce reductions in mid-March in reaction to an oilfield slowdown in Canada and the United States.

Despite a recent rise in U.S. benchmark oil prices to above US$30 per barrel, STEP says it has further reduced its 2020 capital program to $15.5 million, down from $24 million previously and its initial plan of $47 million.

It repeated its warning of a potential breach of its debt-to-adjusted-earnings bank agreements within the next two quarters that could enable a demand for immediate repayment of all amounts due, adding it is seeking relief from its lenders.

It reported a first-quarter net loss of $52.2 million, compared with a net loss of $600,000 for the same period in 2019, mainly due to $58.8 million in non-cash impairment charges against its Canadian well-fracturing assets.

Analysts had expected a net loss of $2.56 million, according to financial markets data firm Refinitiv.

This report by The Canadian Press was first published May 20, 2020.

Companies in this story: (TSX:STEP)

The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Still no confirmed active COVID-19 cases in Red Deer, central zone

There are 15 new confirmed cases were in Alberta, the province said Thursday

Bashaw Farmers market ready for first event on June 12

Pandemic restrictions pushed start back more than a month

Halkirk 2 wind project will get new hearings

Alberta Court of Appeal sides with the appellants

Alberta discussing early Stage 2 economic relaunch

Nineteen new COVID-19 cases confirmed by government Wednesday

Israeli, Chinese policies ‘concern’ Canada, undermine freedom, says Trudeau

Israeli, Chinese policies ‘concern’ Canada, undermine freedom, says Trudeau

Alberta Opposition calls on government to consult on provincial parks

Alberta Opposition calls on government to consult on provincial parks

Alberta overhauls real estate regulator in wake of prior dysfunctional board

Alberta overhauls real estate regulator in wake of prior dysfunctional board

Alberta registrar reverses rejection, man gets to have FREE AB licence plate

Alberta registrar reverses rejection, man gets to have FREE AB licence plate

Alberta imposing steep penalties but no charges on first-time impaired drivers

Alberta imposing steep penalties but no charges on first-time impaired drivers

No separate lockup for man beaten after arrest with police vehicle: Nunavut RCMP

No separate lockup for man beaten after arrest with police vehicle: Nunavut RCMP

Limit gun capacity to five bullets, victims group urges Trudeau government

Limit gun capacity to five bullets, victims group urges Trudeau government

RCMP say gunman behind mass killing in Nova Scotia was ‘injustice collector’

RCMP say gunman behind mass killing in Nova Scotia was ‘injustice collector’

Women’s group angered by ‘intoxication’ ruling but concern called overblown

Women’s group angered by ‘intoxication’ ruling but concern called overblown

Most Read