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Bri-Chem Corp T.BRY

Alternate Symbol(s):  BRYFF

Bri-Chem Corp. is a Canada-based independent wholesale supplier of drilling fluids and chemicals for the oil and gas industry operating from owned or leased warehouses located throughout Canada and the United States. It is engaged in the distribution and blending of oilfield drilling, completion, stimulation, and production of chemical fluids. The Company’s segments include Fluids Distribution Canada, Fluids Distribution USA, Fluids Blending & Packaging Canada, Fluids Blending & Packaging USA, and Other. Its business activity is to provide 24/7 coverage of oilfield chemicals in a variety of weights and clays, loss circulation materials and oil mud products to mud engineering companies who sell directly to drilling firms engaged by the oil and gas companies. Its subsidiaries include Bri-Chem Supply Ltd., Sodium Solutions Inc., Solution Blend Service Ltd., and Bri-Corp USA, Inc. Sodium Solutions Inc. is a fully integrated chemical supplier, toll blender, and packager.


TSX:BRY - Post by User

Post by nozzpackon Jun 30, 2021 3:01pm
166 Views
Post# 33474307

Inventory management forecasts Good Q2

Inventory management forecasts Good Q2Inventory management is an essential requirement for business.
Having too little or too much  is costly.

BRY is no different.
The Covid crash caught them off guard as it did with most energy businesses.

As a consequence, inventory levels were set at normal levels at March 31/20.
However, by  Q2, oil prices collapsed and  as a consequence, revenues were just half of the forecast level of inventory ( $15.7 m ).

By Q3, they were beginning to get control of inventories, and were back to expected requiement levels by Exit Dec 2020.

At that time, Inventory levels were $11.3 million which was almost identical to Q1 revenues of $11,5 m.

Inventory levels going into Q2 were $11.4 million, almost identical to the level at Dec 30/20.

Since then, the oil and gas actvity in the US and Canada have increased substantially.

This means that forecast needs of $11.4 m at March 31/21 will not be sufficient to meet demand and more inventory will have to be produced during Q2.

What this indicates is that management expected sales in Q2 to be the same as Q1 ( about $11.5 m ) .

Demand has obviously increased, so $11.5 m in Q2 will be a low ball estimate.

More likely, Q2/21 revenues will be much higher than $11.5 m and  probably in the range of $15 m to $18 m in Q2. 
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