- Horizon North Logistics (TSX:HNL) has announced their COVID-19 response
- Horizon North are reducing their Capital spending program by two thirds
- Joint Venture with Dexterra is proceeding as planned, albeit with revised financials
- The company is reducing executive salaries significantly for the year
- Horizon North Logistics (HNL) is down 7.8 per cent at C$0.295 with a market cap of $48 million
Horizon North Logistics (TSX:HNL) has updated its outlook for the year along with a bevy of operational changes to combat COVID-19.
The logistics company, which provides modular and demountable housing and commercial space, is implementing a suite of policies to protect against COVID-19.
The company is reducing their net capital outlook by two-thirds, reducing sustained capital spending and deferring the remaining spend on projects.
The company has reduced sustaining capital from $13 million to approximately $8 million, including pausing the manufacture of select products.
They have deferred projects, including no further spend on their Fairfield by Marriott hotel in Kitimat, British Columbia, and the deferral of the remaining construction of modular units and large complexes for a client that supports LNG development.
This has meant a drop in budgeted spending for the year, down from $24 million to $8 million for the year.
The company has also written down expected proceeds from dispositions from $10 million to $8 million for the year.
All of these measures bring the combined net capital outlook for 2020 down from $30 million to $10 million.
The company has also brought in a suite of COVID-19 protocols.
Horizon North’s executive team has agreed to substantial pay cuts to ensure business continuity, with the Board, President and CEO taking a reduction of 25 per cent.
Senior VP’s will also have pay reduced by 15 per cent, and regular VP’s will be reduced 10 per cent.
The company has also reaffirmed its commitment to the joint venture it is entering into with Dexterrra, a subsidiary of Fairfax Financial Holdings.
Both companies have however announced they will be withdrawing financial guidance with respect to the transaction and the parties’ projected financial results for the year.
President and Chief Executive of Horizon North, Rod Graham, said the company and the country were in an unprecedented situation.
“We remain committed to a transformational combination with Dexter that will provide a premier, made-in-Canada company that brings size, scope, scalability and sophistication to the markets we serve.
“We look forward to leveraging the synergies of this combination over the next several years,” he said.
Horizon North Logistics (HNL) is down 7.8 per cent to C$0.295 per share at 3:00pm EST.
