Sedna Geotech Announces 1997 Year-End Results
BALTIMORE, MARYLAND--Sedna Geotech Inc. (TSE: SOT) today announced 1997 year-end revenues of US$ 12.0 million, compared with revenues of US$ 6.6 million for the previous year. Net income for 1997 was US$ 1.5 million or US$ 0.12 per share and EBITDA was US$ 4.2 million or US$ 0.32 per share. The 1997 results represent Sedna's
first full year as a public company. The dramatic rise in revenues is based upon several components including the addition of several new reverse circulation (R/C) drilling rigs in Peru, establishment of a new business unit in Brazil and the diversification into water well drilling. At the end of 1997, the Company had nine R/C drill rigs operating in Peru, an increase of 50 percent over the number that we had working in that country at the end of 1996. In August, Sedna
entered the Brazilian market and had two R/C drill rigs operating
there by the end of the year. In addition, the Company purchased
two water well drill rigs during the year, providing opportunities
to diversify Sedna's revenue base. As a direct result of this growth, both Field Operating expenses and General and Administrative costs more than doubled from the previous year. While these factors affected earnings in the short term, management is confident that the Company's revenues will continue to grow and far outpace the rate of increase of the associated costs, which will improve future earnings.
Amongst the outstanding factors influencing the 1997 results were
the unusual weather patterns in Latin America caused by El Nino
which began in the third quarter and gained momentum throughout
the fourth quarter. The resulting ground condition problems and
deterioration in Peru's transportation infrastructure caused
delays in drilling by mining companies operating in the area.
This slowed the fourth quarter especially, a period already
affected by the planned suspension of activities at all mine sites
for several weeks around the Christmas holidays.
In October, the Company completed a private equity issue which
raised approximately US$ 6.0 million dollars. Proceeds from this
offering will assist the Company in its growth and working capital
position. Shares outstanding at the end of the year were 13,287,140.
Sedna Geotech provides drilling and geotechnical services in Latin
America. The Company's shares trade on the Toronto and Vancouver
Stock Exchanges under the ticker symbol "SOT".
For and on Behalf of the Board of SEDNA GEOTECH INC.
"Hans H. Kuppers", President and C.E.O. |
