Industrial companies have come under pressure in the last two years as some of their end markets have struggled. The biggest impact has been felt by companies that provide equipment to oil & gas producers and mining companies. Construction equipment makers have also taken a hit, though.
Demand from the oil & gas industry has slowed down considerably in the wake of lower prices. Several oil & gas producers, especially in North America, have cut back on their capital spending in order to adjust to the low price environment. The story is similar for mining companies.
The good news for industrial companies, though, is that some of the end markets could be recovering. Indeed, while oil prices are not likely to see $100 per barrel anytime soon, they have stabilized somewhat. In the mining sector, the copper market is expected to move into a deficit by as early as 2018. This should boost demand for equipment makers.
Luxor Industrial Corporation (TSX-Venture:LRL) is a Vancouver, Canada-based company focusing on the development, engineering, manufacturing and marketing of engineered wood products. The company operates in two segments; industrial, where it manufactures wood mat products which have applications in transmission lines, pipelines, wind farms, staging areas, boardwalks and pathways, and oil and gas and mining operations; and commercial, where the company distributes and designs engineered wood products (laminated beams) for use in wood structures.
Friday morning, Luxor Industrial announced that its U.S. subsidiary, Mill Frame LLC, has been awarded a turnkey framing contract for the Sonata project in Seattle, Washington by Venture General Contracting. The contract is valued at $1.2 million. The project is expected to commence in March 2017.
With this contract, Luxor’s 2016 and 2017 U.S. framing contracts now total approximately $27 million. The company’s U.S. and Canadian framing contracts total approximately $35 million. The company’s U.S. subsidiary continues to quote on 2017 projects as well as additional business for 2016.
Today’s news, though, has not had any major impact on Luxor Industrial shares. In fact, the company’s shares were lower in mid-day trading. At last check, the stock was trading 1.32% lower at $0.375 on volume of 116,089, which was more than double the daily average volume of 54,454.
The stock though hit a 52-week high of $0.40 earlier in the day. Year-to-date, Luxor Industrial shares have gained nearly 168%.
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