Civeo Corp (CVEO), a housing provider for workers in the oil industry reduced its workforce by more than 1,000 jobs.
The shares of the company rebounded by 4.59% to $4.10 per share at the time of this writing around 11:56 A.M. in New York. Civeo Corp suffered more than 50% decline over the past two days after announcing its operating guidance for 2015.
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Civeo closed two lodges in Canada
Civeo Corp decided to reduce the number of its employees in Canada by 30% and 45% in the United States for its levels in the beginning of 2014. The company had 4,068 workers by the end of 2013.
The company shut down its Athabasca and Lakeside lodges in Canada. Civeo Corp primarily provides housing for workers in the Canadian oil sands industry. The company is evaluating similar actions in other locations, according to its president and CEO Bradley Dodson.
Civeo Corp said the occupancy rates for its lodge rooms dropped by approximately 35% to 40% in Canada as it enters the fiscal 2015. The company expected its occupancy rate to be around 44% to 47% with an average daily rate of C$139 to C$145 for 2015.
The company also reported that the occupancy rate of its village rooms in Australia contracted by 35% to 45%. By 2015, Civeo Corp estimated its occupancy rate in its Australian village rooms will be 55% to 57% with an average daily rate of A$88 to A$95 next year.
Civeo Corp abandoned dividend
The board of directors of Civeo Corp decided to abandon its dividend to maintain its financial flexibility. The company plans to use its excess cash flow to repay its debt instead of paying dividend to shareholders.
Civeo Corp maintained its revenue guidance in the range of $200 million to $210 million and EBITDA margin of 32% to 34% for the fourth quarter of 2014. However, the company cautioned investors that it expected its financial results to weaken in 2015.
The company estimated that it will be able to achieve revenues of around $540 million to $600 million for the full-year 2015. Its EBITDA is expected to be around $135 million to $160 million.
Civeo Corp was negatively impacted by several factors including declining global crude oil prices, low metallurgical coal prices and the continuing weakness of the Australian and Canadian dollars against the U.S. dollar.
The declining oil prices prompted major oil companies in North America to reduce capital spending particularly in Canada next year. Oil companies are expected to cuts jobs including Halliburton Company (HAL) and BP Plc (BP).