Civeo Corp, an American accommodation services multinational corporation, forecast revenue for the first quarter and full year much lower than analyst estimates. The lackluster forecast figures plunged the company’s shares by almost 30 percent in extending trading.
The company also said that it will be adjusting its cost structure, limiting capital expenditures and suspending its quarterly dividend.
Civeo Corp said it expects first quarter 2015 revenues in the range of $160 million to $175 million with EBITDA in the range of $45 million to $55 million. Analysts were expecting revenue of $228 million, according to Thomson Reuters I/B/E/S.
Civeo’s 2015 revenue expectation of $540 million-$600 million is also lower than analysts’ estimate of $817.2 million.
In addition, the company has cut its workforce in its Canadian and U.S. operations by 30% and 45%, respectively, from levels at the beginning of 2014.
The Houston-based company’s shares have dropped by around 64 percent since their May 19 debut through Monday’s close of $8.27 on the New York Stock Exchange.
The company still plans on moving to Canada – an announcement it made in September.
President and Chief Executive Officer Bradley J. Dodson, stated:
”As it became evident during the fourth quarter that capital spending budgets among the major oil companies were going to be cut, we began taking steps to reduce marketed room capacity, control costs and curtail discretionary capital expenditures. In Canada, we have since closed our Athabasca and Lakeside lodges and are evaluating similar actions in select other locations.”
“We are limiting our discretionary capital spending in 2015 to those projects that are supported by customer contracts. From a revenue perspective, we are reassessing where in our regional markets we can profitably improve occupancy while maintaining the high safety and service levels for which our company is known. These efforts reflect our proactive approach to improving the company’s structural efficiency, managing cash flow and maintaining our balance sheet.”
Civeo has prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for housing hundreds or thousands of workers with its long-term and temporary accommodations and provides catering, facility management, water systems and logistics services.