Alberta-based Bri-Chem Corp. said Thursday that during Q1 2013, net earnings were $1.8 million compared to net earnings of $2.9 million for 2012, a decrease of 36.6 percent. Bri-Chem is wholesale distributor and manufacturer of oil and gas drilling fluids and steel pipe.
The steel pipe distribution division recorded sales of $3.8 million for the three months ended March 31, 2013, compared to revenues of $7.1 million for the same period in 2012. The steel distribution division experienced a decrease in demand for seamless pipe in November 2012 and it continues to be negatively affected by reduced demand from steel pipe service suppliers into Q1 2013. The Canadian market has excess steel pipe inventory as many distributors were anticipating a more robust demand for steel pipe product during the winter drilling season. Bri-Chem said that the steel pipe distribution division will concentrate on reducing inventory and increasing turns.
The steel manufacturing division generated sales of $4.3 million for the three months ended March 31, 2013 compared to sales of $2 million for the comparable period in 2012, an increase of 113 percent. Notwithstanding the increase in sales, the company continues to be challenged by volatile crude oil prices, increasing crude oil price differentials and distribution and pipeline constraints.
The company's North American oil and gas drilling fluids divisions recorded sales of $41.5 million for the three months ended March 31, 2013, a decrease of 4.7 percent compared to the same period in 2012.
