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Ivanhoe Energy Q2 net loss $18 million

Staff writer |
Ivanhoe Energy reported its financial results for the second quarter of 2014. Net loss from continuing operations for the six months ended June 30, 2014 was $18 million.

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This was $2.4 million lower compared to a net loss from continuing operations of $20.4 million incurred during the same period in 2013. The decrease is due to a $7.8 million decrease in general and administrative (G&A) expenses and a $0.6 million net decrease in other expense items impacting net loss from continuing operations.

These collective savings were offset by a $2.9 million decrease in foreign currency exchange gains, a $1.7 million decrease in deferred income tax recoveries and a $1.4 million increase in finance expense.

Net loss from continuing operations for the three months ended June 30, 2014 was $10.2 million, which was $1.8 million higher compared to the net loss from continuing operations of $8.4 million incurred during the same period in 2013. The increase is primarily due to net change of $3.5 million in foreign currency exchange losses over the two periods offset by a $2.4 million decrease in G&A expenses due to various cost-reducing measures implemented by the company.

Cash used in operating activities for the first six months of 2014 was $15.5 million, which is $5.1 million less compared to cash used in the same period of 2013 of $20.6 million. The decrease is primarily due to a $7.8 million reduction in G&A expenses for the six months ended June 30, 2014, as compared to the six months ended June 30, 2013 partially offset by a number of miscellaneous operating items reducing the impact of the corporate overhead reductions.

General and administrative (G&A) expenses for the first six months of 2014 were $13.3 million, as compared to $21.1 million incurred during the same period in 2013. The decrease of $7.8 million is primarily due to $2.3 million decrease in staff costs related to severance and retention of key employees in the Asia segment incurred in 2013 as well as reduced staffing levels in 2014, $1.9 million decrease in legal costs, $1.5 million decrease in accrued bonuses as no bonuses were accrued in 2014, $1.2 million decrease in travel and business expenses due to reduced business activities and a $0.9 net decrease related to other miscellaneous G&A items.

The Company continues its efforts to restructure the business to further reduce G&A spending and extend its working capital reserves.

At June 30, 2014, Ivanhoe Energy had approximately $4.6 million in cash and cash equivalents. These reserves are sufficient to conduct base operations into the beginning of the fourth quarter. Moreover, the Company continues to source alternatives to replenish its treasury in order to execute its business plan. These alternatives range in form and complexity but all have the goal of establishing a solid financial base for the Company.


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