CALGARY (CP) -- Precision Drilling Trust [TSX:PD.UN] said Wednesday that fourth-quarter operating earnings per unit more than tripled compared with a year earlier, but one-time items related to asset sales and its conversion into an income pulled down net earnings.
Canada's largest energy-industry driller said revenue from its continuing Canadian operations was C$427.9 million in the final three months of 2005, up from C$314 million a year earlier.
Operating profit rose to C$175.9 million from C$113.9 million. Excluding one-time items, earnings per unit from continuing operations rose to C$1.49 from 49 cents, benefiting from the trust's favourable tax treatment.
Precision, which sold its non-Canadian operations during the year and completed its trust conversion in early November, said fourth-quarter earnings from continuing operations rose to C$120.9 million from C$60.6 million, before a C$37.3-million after-tax loss on discontinued operations.
Net earnings of C$83.5 million, 66 cents per unit, compared with a year-earlier profit of C$88.2 million, equivalent to 71 cents per unit.
Precision said full-year revenue was C$1.27 billion, up from C$1.03 billion in 2004.
Annual net earnings of C$1.63 billion, C$13.00 per unit, included C$1.41 billion in gains from divestments, and compared with 2004 earnings of C$247.4 million, or C$2.11 on a per-unit basis
The 204% improvement in ex-items earnings from continuing operations was attributed to ''the increase in demand and underlying profit margins for all of Precision's Canadian oilfield service offerings, lower interest expense with repayment of outstanding debentures and lower income tax expense with the conversion to an income trust during the fourth quarter.''
The quarter's one-time negative items included C$6.4 on repayment of debentures, a C$50.7-million markdown of Weatherford International Ltd. shares received in exchange for Precision's energy services and international contract drilling divisions, and C$17.5 million in costs to become an income trust.
''Precision will continue to benefit from the pricing leverage and demand established in the fourth quarter of 2005,'' stated Gene Stahl, who took over from father-in-law Hank Swartout as president and CEO when the trust conversion was completed.
''While demand for our services is remaining very strong, the additional supply of industry equipment and recent softening of natural gas commodity pricing in North America may serve to weaken the favourable equipment demand versus supply imbalance that currently exists.''
(c) The Canadian Press 2006
