CALGARY – A company that operates workcamps for the oilsands industry in northern Alberta says demand for its services has been weaker than expected over the summer in the wake of the Fort McMurray wildfire.
Calgary-based Horizon North Logistics Inc. (TSX:HNL) says rebuilding efforts in the oilsands region of northern Alberta have proceeded at a much slower pace than expected and demand for its camp, catering and modular building services fell off “significantly” in September.
Horizon North’s 665-unit Blacksand Executive Lodge near Fort McMurray was destroyed by the wildfire in May. It says it expects to settle its insurance claim by year-end, without giving any dollar target.
On a conference call, CEO Rod Graham blamed lower activity for a 27 per cent drop in Horizon’s revenue to about $60 million in the quarter ended Sept. 30 versus the same period last year. The company posted a loss of $4.7 million, compared with a gain of $313,000 in the third quarter of 2015.
He said progress has been made on cleaning up areas of Fort McMurray affected by the fire but the approach of winter has slowed efforts to replace the 1,800 single-family homes and other buildings that were destroyed.
Graham said he believes softer demand and downward pressure on pricing will persist through the rest of 2016 and into the first half of 2017.