RE:RE:RE:HNL and EBITDA for 2014 and 2015
I agree, but you fail to get the point. Yes, 50%+ of CERF's business is now Energy Services, but 70% of that Energy Services related business comes from Winalta and the accommodations business.
HNL's leverage is not a significant concern. That is overblown. They will generate free cash in 2015 even after funding the dividend because maintenance capex is pretty insignificant.
Don't fool yourself into thinking that CERF is going to have a great year in 2015. Their balance sheet is decent. But fact of the matter is that many of their divisional lines are going to suffer.
Winalta (accommodations) - going to be down significantly year over year. Lower rig count, lower pricing power, huge number of available structures from other competitors (Apex, Auburn, Northgate, HNL, etc., etc.)
TRAC (oilfield rentals) - again, going to have a very tough year. Nothing proprietary about drill pipe, collars, 400 bbl tanks. These are commodity rentals in a lower O&G activity year so both utilization and pricing should come off. At a minimum, pricing will.
As for the other almost 50% of the business:
Construction rentals - probably should stay flat YoY. No real halt to this but you may see some of the more O&G exposed guys enter this market with goofy pricing because their stuff is not getting used in the patch. Probably on generators, flameless heaters, etc.
Waste Management - I think this is a great business and will see modest growth in 2015. Unfortunately, it is a very small part of the overall business.
Don't get me wrong, CERF is a decent business, but it is going to have its fair share of challenges in the next year. Right alongside HNL. The difference between the two is that, in my opinion, HNL has substantially more upside.