WesternOne winding down Australian operations
Aug. 7, 2014 - WesternOne Inc. has announced that it is winding-down its operations in Australia. In order to ensure an efficient wind-down process, the Australian operations have been placed into voluntary administration. WesternOne is taking this action in order to focus both its management and its capital resources on significant opportunities in North America, including ongoing capital investments in Northern Alberta's oil and gas sector, new major investments in the shale oil and gas sector in the United States, and the liquefied natural gas (LNG) and related infrastructure projects proposed for British Columbia.
"The decision to wind-down these operations follows a thorough review of the current challenging business environment in Australia and the impact it was having on the financial results of our Australian operations," said Mr. Robert King, Chief Executive Officer. "The downturn in Australia's resource market started in 2012 when economic growth in China decelerated. We acquired the Australian business in early 2013 with the expectation that the downturn had largely bottomed out. Unfortunately, the weakness in this market has persisted and despite continual downsizing of that business we do not see the prospects for a turnaround in the performance of our Australia operations in the near-term. The Australian operations do not constitute a substantial portion of WesternOne's overall business."
Britco, WesternOne's modular building platform, continues to execute major workforce accommodations projects in Western Canada, including a 2,000 bed complex in northern Manitoba for Manitoba Hydro and a 1,600 room facility for Devon Energy in northern Alberta. WIS, WesternOne's infrastructure services platform, continues to benefit from the robust construction and infrastructure sectors within Western Canada and is expanding its market through fleet investments and launching new branches in strategic locations.
As previously announced, Peter Blake becomes Chief Executive Officer of WesternOne effective September 1, 2014.
"Peter's extensive knowledge and experience will help refocus our long-term growth strategy in the construction and infrastructure sectors within Western Canada and the United States," said Mr. King. "Our pipeline of work in North America has never been stronger and we are booked well into 2015 at all of our Britco modular facilities in Canada and the United States."
WesternOne's preliminary financial results for the three months ended June 30, 2014 indicate estimated consolidated revenue of approximately $112.1 million and consolidated adjusted EBITDA (see "Non-IFRS Measures" below for details) of approximately $10.5 million. Excluding the impact of the Australian business, estimated consolidated revenue was approximately $98.7 million and consolidated adjusted EBITDA was approximately $12.6 million. As a result of its intention to wind-down its operations in Australia, WesternOne expects to write-off from these operations the remaining intangible assets totaling $6.2 million and deferred income tax assets and tangible capital assets of $4.0 million in 2014, representing less than 2.9% of WesternOne's estimated total consolidated assets of $353.9 million as of June 30, 2014. This is in addition to a goodwill and intangibles impairment charge of $25.9 million that was recognized for WesternOne's Australian operations for the year endedDecember 31, 2013.
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