CALGARY, AB-- Black Diamond Group Limited, a leading provider of workforce accommodation and modular workspace solutions, is pleased to announce it has been awarded a workforce housing camp renewal in the Duvernay region of northwest Alberta. The renewal for 354 beds will generate rental revenue of $6.6 million over its three year term and will commence July 1, 2016.
"We believe this renewal is indicative of the oil and gas market stabilizing in Western Canada and the improving confidence of resource developers making longer term commitments. Furthermore, our business is beginning to strengthen with the commodity price recovery, along with increased infrastructure spend across North America," said Trevor Haynes, Chairman and Chief Executive Officer.
In addition to the renewal, Black Diamond is providing the following update on its two main operating business units:
Black Diamond believes that the Camps & Lodging business unit is stabilizing and will continue to benefit from increased activity relating to a recovery in commodity prices. Given that we are in the early stages of a recovery, management has not changed its revenue and earnings expectations for 2016. The Fort McMurray fires have caused some disruption in May operations, which management expects will contribute to revenue and earnings being lower than anticipated in the Company's second quarter. Management anticipates that such weakness will be offset by the recovery and rebuild activity in the Fort McMurray area through the balance of the year.
Black Diamond believes its BOXX Modular business unit will continue to benefit from the increased infrastructure spend across Canada and the United States, and anticipates realizing growth through its recently opened Saskatoon and Vancouver branches. In addition to this organic growth, the Company's management is continuously evaluating opportunities to expand this business unit both in Canada and the United States.