Precision Drilling (TSX: PD) this morning reported its fourth quarter financing results for 2020 this morning. Within, the company revealed that it had conducted share buybacks throughout 2020, a strategy that continued through to 2021 – despite the firm taking money from the government for wage subsidies.
Within the firms news release this morning, the company indicated that it had posted revenues of $202 million for the fourth quarter of 2020, a 46% decline from 2019’s results, along with a net loss of $38 million. Despite the failing results however, the company felt that proper stewardship of its capital would be to continue with share buybacks in the open market.
The company reported that it had repurchased and cancelled a total of 265,382 common shares for a total of $6 million, in what is believed to be just the fourth quarter – with a total of 420,588 common shares repurchased throughout 2020. The firm also announced that it had repurchased an additional 108,962 common shares for $3.0 million subsequent to year end.
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Normally, the repurchasing of shares would be without issue or controversy. However, despite having the ability to repurchase shares and provide a stronger return to shareholders, the company felt the need to access the Canadian government’s Canada Emergency Wage Subsidy – a subsidy meant to “re-hire workers, help prevent further job losses, and ease your business back into normal operations.”
In total, the company reportedly accessed $10.0 million in government assistance under CEWS in the fourth quarter of 2020 – the same quarter it spent $6.0 million buying back shares. The company has also since spent a further $3.0 million buying back shares in the current quarter.
The company reportedly used the funds from the Emergency Wage Subsidy to reduce operating costs by $8.0 million, and general administrative costs by $2.0 million.
Overall, Precision has reportedly accessed a total of $26 million since April 1, 2020, under the Canada Emergency Wage Subsidy.
Precision Drilling last traded at $32.02 on the TSX.
Information for this briefing was found via Sedar and Precision Drilling. The author has no securities or affiliations with any of the mentioned securities. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
