MONTREAL – Alberta’s oilsands production may be thriving, but TransForce doesn’t foresee any improvement this year for North American oil drilling.
The trucking company, which among other things moves drilling equipment, posted weaker results in the first quarter as energy sector revenues dropped 24 per cent and margins plummeted.
Chief executive Alain Bedard told analysts Friday that he foresees an eventual improvement in the U.S. energy sector as the country seeks energy independence.
But he said the outlook is dark in Canada because of the challenges of moving oil to market.
The Montreal-based company has sold and mothballed drill moving equipment to reduce its capacity by more than 10 per cent.
TransForce (TSX:TFI) shares dropped nearly three per cent, or 57 cents to $19.43 in trading Friday morning on the TSX after reporting weaker results after markets closed on Thursday.
The transportation and logistics company’s profits dropped 37 per cent to $18.9 million in the period ended March 31. It earned 20 cents per diluted share, compared with 31 cents in the prior year.
Revenue decreased 4.9 per cent to $749.7 million. Energy sector revenues were $29 million lower, but it was helped by a $24.9-million contribution from its acquisition of delivery company Velocity Express on Feb. 1.
Bedard said during a conference call that he expects the overall economy to remain weak. He added that demand for some of its trucking services have been hurt because the corruption scandal in Quebec has slowed the awarding of contracts.
TransForce offers courier and trucking services, including specialized services to the energy sector and waste management to customers across Canada and the United States.