CALGARY – A construction company that does contract work for oilsands producers warns it will report lower revenue and earnings because of the Fort McMurray wildfires that erupted last month.
Calgary-based Stuart Olson (TSX:SOX) says revenue for its industrial division will fall by about 30 per cent for the three-month period ended June 30 to between $70 million and $80 million from $107 million in the same period last year. It says adjusted earnings will fall to between $2 million and $3 million, down from $8.5 million.
The company says the division that provides maintenance, repair and operations support for oilsands customers is also facing increased costs related to having to restart operations after employees were forced to flee from three oilsands producing sites because of the blaze.
CEO David LeMay said in a news release that hundreds of employees were evacuated from the region during the crisis and that only about 60 per cent have since returned to work.
Stuart Olson says it expects to continue to see lower revenue from oilsands customers this year as some have reduced the size of certain contracted projects or deferred projects until later in 2016 as they try to recover from the fires.
Financial analysts estimate the wildfire will result in the loss of 30 million barrels of oilsands production worth upwards of $1.4 billion.