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March 2020


Macro Enterprises Inc. Announces 2019 Fourth Quarter and Year End Results


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Fort St. John, British Columbia–(Newsfile Corp. – March 24, 2020) – Macro Enterprises Inc. (TSXV: MCR) (the “Company” or “Macro”) is pleased to announce its fourth quarter and year end results for 2019.

Summary of financial results
(thousands of dollars except per share amounts)
Three months ended
December 31
Year ended
December 31
2019 2018 2019 2018
Revenues $80,821 $137,595 $413,728 $191,060
EBITDA1 8,718 22,318 58,790 21,705
Net income (loss) 2,400 14,054 25,209 8,965
Net income (loss) per share $0.06 $0.46 $0.82 $0.30
Weighted average common shares outstanding (thousands) 30,733 30,256

Note 1References to EBITDA are to net income from continuing operations before interest, taxes, amortization and impairment charge. EBITDA is not an earnings measure recognized by International Financial Reporting Standards (“IFRS”) and does not have a standardized meaning prescribed by IFRS. Management believes that EBITDA is an appropriate measure in evaluating the Company’s performance. Readers are cautioned that EBITDA should not be construed as an alternative to net income (as determined under IFRS) as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) as a measure of liquidity and cash flow. The Company’s method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Company’s EBITDA may not be comparable to similar measures used by other issuers.


  • Macro Enterprises Inc. (“Macro” or the “Company”) generated $59.3 million in positive cash flows from operations before taxes paid and changes for non-cash working capital items compared to $21.6 million generated in prior year.
  • Total working capital as at December 31, 2019 was $52.4 million of which the Company’s net cash of debt position was $43.1 million. The Company continues to remain unleveraged and undrawn on its credit facilities.
  • The normal course issuer bid was renewed for another 12 months in December 2019.
  • Assuming that the current pandemic is brought under control and business resumes as usual, the Company expects revenue to exceed $200.0 million in fiscal 2020. This estimate does not provide for any amounts for Trans Mountain Pipeline, core maintenance and integrity business beyond 90 days after year end, outstanding bid work for prospective pipelines and facilities projects or any anticipated changes to scope for construction on existing work.
  • The Company is reporting shareholders’ equity of $114.9 million or $3.74 per share based on the weighted average common shares outstanding as at December 31, 2019.

Fourth quarter results

Three months ended December 31, 2019 vs. three months ended December 31, 2018

Consolidated revenue was $80.8 million compared to $137.6 million in the fourth quarter last year representing a decrease of $56.8 million or 41%. The decrease in revenues during the quarter was anticipated as a result of a number of projects concluding with on-going work slowing down for a two week period late in December. Approximately 83% or $67.3 million of the revenue earned related to pipeline and facilities construction with the balance or $13.5 million relating to maintenance and integrity services being performed under existing master service agreements. Total recurring revenue relating to master service agreements picked up during the period compared to the first 9 months of the year as a result of added resources being allocated to these services being provided. Revenue recognized for the quarter ended December 31, 2019 also included revenue from its joint operations on the Coastal GasLink Pipeline project and to a very limited degree work on the Trans Mountain Expansion project. Prior year revenue relating to pipeline and facilities construction projects was approximately 84% or $127.1 million while the balance related to maintenance and integrity work. The fourth quarter in 2018 was a record quarter that included the commencement of the Company’s first major pipeline project.

Operating expenses were $70.9 million or 88% of revenue compared to $111.8 million or 81% of revenue in the fourth quarter last year. The Company incurred added operational costs and overheads during the quarter which impacted margins by concluding work on various projects, bidding future larger project opportunities and generally investing in its processes to continue to scale the business. All aspects of operations will continue to be monitored and streamlined to ensure efficiencies and savings are achieved while maintaining the highest degree of health, safety and environmental standards possible. Margins are expected to be slightly lower than the three previous quarters in fiscal 2020 due to current market uncertainty, potentially increased overheads, input costs and larger scale operations.

General and administrative expenses were $2.2 million, down $0.2 million from the $2.4 million recorded prior year. Included in the Company’s general and administrative expenditures are professional fees, corporate wages, burdens and other overheads, including rents, insurance, travel and administrative supplies that are not charged directly to projects. The fourth quarter was representative of the current spending expected in fiscal 2020.

Depreciation of property, plant and equipment was $6.0 million and significantly higher than in previous years. The increase in depreciation directly correlated to the $37.2 million in new capital assets acquired and deployed and the added recognition of right of use assets under lease which concluded the year in excess of $10 million. In prior years the Company was not required to recognize depreciation on assets under rental leases as is the case under the newly adopted IFRS 16 accounting standard. Depreciation is calculated at various declining balance methods across the Company’s multiple categories of property, plant and equipment and is used in guiding the annual capital expenditure estimates. Residual values, methods of amortization and useful lives of the assets are reviewed annually and adjusted if appropriate.

During the fourth quarter the Company recognized non-recurring other income of $1.7 million which included some gains on disposals of equipment and interest income on the significant cash balances carried throughout the year.

During the fourth quarter the Company recognized a non-cash loss of $331,000 on the mark-to-market fair value re-measurement of its preferred shares at period end. The loss adjustment is indicative of a 5.7% increase to the Company’s net book value over the prior reported period.

During the fourth quarter the Company recognized non-cash stock-based compensation charges of $315,000. The Company anticipates recognizing an additional $0.4 million in stock-based compensation charges amortized over the remaining vesting period of the outstanding options. The non-cash stock-based compensation charge relates to options granted in August 2019 and December 2018.

Finance costs of $193,000 were lower than prior year due to the adjustments the Company recognized under IFRS 16 right of use asset lease obligations and the associated implicit interest charges, the amortization of deferred finance costs recorded on its credit facilities and the issuance of its letters of credit relating to contract financial assurances. In addition to the non-cash deferred transaction costs, interest charges on its capital leases, standby and administration fees associated with the Company’s credit facility, other finance costs included $41,000 of effective interest rate payments made on its preferred shares.

Income tax expense in the quarter of $0.1 million was at an effective rate of 5.1% which approaches the enacted tax rates of 27% after reversing non-cash charges and timing differences.

Net income was $2.4 ($0.06 per share) compared to a net income of $14.1 million ($0.46 per share) recognized during the three months ended December 31, 2018. EBITDA was $8.7 million compared to $22.3 million recognized during the three months ended December 31, 2018. As a result of decreased margins, significant non-cash adjustments to depreciation, mark-to-market adjustments to the preferred shares and stock-based compensation net income and EBITDA was adversely impacted despite strong cash flows maintained during the quarter.


Presently, the Company’s ability to provide reliable outlook guidance for the 2020 fiscal year is materially impaired due to the prevailing uncertainty about the short and long term economic and geo-political effects of the current COVID-19 pandemic and the coincident collapse of oil and gas prices. Despite this, the Company will continue to work when it can and ensure it will take all necessary steps to maintain and preserve its balance sheet during this potentially prolonged period of uncertainty.

When the pandemic is brought under control to the extent that the businesses on which the Company’s operations are dependent are relieved of the current pandemic emergency measures such that they are able to resume customary operations, and if the projects under contract continue as anticipated, then, based on its current committed back log of business which includes pipeline maintenance and integrity work underway, ongoing facilities construction and its proportionate share of the Coastal GasLink Pipeline project, the Company would expect revenue to exceed $200 million in fiscal 2020. This amount does not include any amounts for the commencement of the Trans Mountain pipeline expansion nor does it include any additional large project bid work for prospective pipeline construction and facilities jobs nor anticipated increases to the scope of construction on existing projects. There are no immediate near term needs for the Company to spend any capital on property, plant and equipment.

Joint Venture Update:

The Company and its joint venture with Spiecapag Canada Corp. are currently undertaking construction activities for pipeline construction services on the Coastal GasLink Pipeline Project that consists of approximately 166 kilometers of a 48 inch pipeline. Construction commenced in Q1 2019.

On June 18, 2019, the Government of Canada announced its approval of the Trans Mountain pipeline expansion project, a crucial next step for the much-delayed pipeline project designed to carry oil from Alberta to British Columbia. The federal cabinet affirmed the National Energy Board’s conclusion that the project is in the national interest of Canada, having the potential to contribute tens of billions of dollars to the economy, and create and sustain thousands of jobs. The Company and its 50% joint venture partner continue working with its client to satisfy permitting and scheduling requirements. Previously, the Company reported that it expected to receive notice to proceed with construction in the first half of 2020. However, to date, the Company has not received any notifications for work to proceed nor have there be any commitments to timelines for construction to commence.

Company Activities:

  • In May 2019, the Company announced that it had been awarded a construction contract for the Saturn Compressor Station, a single-unit greenfield compressor station located near Dawson Creek, B.C., which is part of NGTL’s North Montney Mainline Project. Work commenced on the lump-sum contract in early May 2019, with a substantial completion and in-service scheduled for the second quarter of 2020.
  • Subsequent to year end, the Company secured new facility construction projects that aggregate in value in excess of $50 million of new work to be performed in fiscal 2020. Some of this work has not yet commenced and may be impacted due to current uncertainty.
  • The Company remains actively bidding and estimating costs on projects for its larger clients and anticipates both construction and core maintenance work continuing in the near to mid-term.

The continuation of these activities is subject to successfully resolving any near term and long term economic or market effects of the global pandemic outbreak of COVID-19 and the significant geo-political events impacting current commodity prices.

Macro’s core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta. The Company’s corporate office is in Fort St. John, British Columbia. Its shares are listed on the TSX Venture Exchange under the symbol MCR. Information on the Company’s principal operations can be found at

Forward Looking Statements

Certain statements in the Company’s Press Release for its 2019 fiscal year end, other than statements of historical fact, may include statements of forward-looking information. The Company cautions that such forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct; and, consequently, all such statements are expressly qualified by this cautionary statement.

Forward-looking information includes, without limitation, statements regarding the adverse impacts on the Company’s business due to the current COVID-19 pandemic and collapse of oil and gas prices, statements regarding expected revenues, anticipated project margins, expected general and administrative expenses, anticipated amounts of property and equipment purchases, the sufficiency of working capital, expectations regarding debt and equity financing and anticipated industry trends.

The associated risks and uncertainties include, but are not restricted to, economic and geopolitical disruptions caused by epidemics and other public health crises (such as the current COVID-19 pandemic), geopolitical instability causing significant volatility in oil and gas prices, government regulation of energy and resource companies and related infrastructure, construction disruptions caused by adverse weather, inability to maintain and increase market share due to competitive pressures, terrorist activity, the price and availability of alternative fuels leading to a reduction in demand for oil and gas, the demand for relative to the availability of pipeline capacity, adverse impacts on the supply and prices of oil and gas product due to potential instability or armed conflict in oil producing regions and the overall economic environment.

More specifically with respect to epidemics and other public health crises, such as the current COVID-19 pandemic, the risks and uncertainties faced by the Company include risks to supply chains, key project partners, and employee health and safety. The Company’s business could also experience a slowdown or temporary suspension in operations in geographic locations impacted by an outbreak of a contagious disease such as COVID-19. Any prolonged restrictive measures put in place by governmental authorities in order to contain such an outbreak (e.g. international travel restrictions) or other adverse public health development, in Canada, or in any other jurisdictions upon which the Company is reliant for supplies of construction materials, equipment or professional services, may have a material and adverse effect on the Company’s financial and/or operating performance. Any delay in the completion of the Company’s construction projects may require the Company to incur non-compensable costs such as standby time and for overtime work necessary to meet contracted project timelines.

All of the above-described risks and uncertainties may cause actual results and future events to differ materially from the information contained herein. Consequently, there can be no assurances that the Company’s forward-looking statements will prove to be accurate. Except as required by the laws and stock exchange policies to which the Company is subject, the Company assumes no obligation to update its forward-looking statements should circumstances or management’s estimates or opinions change. Readers are urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at for additional information regarding the risks and uncertainties associated with the Company’s business.

For further information please contact:

Frank Miles
President and C.E.O.
Phone: (250) 785-0033

Jeff Redmond
(250) 785-0033

To view the source version of this press release, please visit