Adk Group Of Companies Update
Financial Improvement Continues:
With the change in management structure for the ADK Group of Companies that occurred in 2020 (with not replacing the President and CEO after his resignation), we have witnessed the improvement of the financial position for the ADK Group of Companies and this was maintained with 2023-2024 fiscal year (June 1/23 to May 31/24).
We had hoped to see more work for Beaver Enterprise with oil and gas reclamation activities but while not as strong as the years 2021 to 2023 financially we still drastic improvements compared to the years 2015 to 2020.
Acho Dene Koe First Nation received their first payment (for the last 10 years) for shareholder’s dividends in 2023. The ADK Group of Companies paid the Shareholder [Acho Dene Koe First Nation] $279,805 for the years 2015-2023, A calculation was based on social capital profits of 5%, with all the profits originating from the years 2021 to 2023. For the years 2015 to 2020 the companies paid no payment of dividends as for each of those years the combined profit margin for all the companies – Beaver Enterprise LP, Liard Fuel Centre LP, Acho Camps & Catering LP (and Acho Horizon North Camps & Catering), and Liard Fuel Centre LP was a net zero. In some of those years, the companies even operated at a loss, which if had been left to continue the companies would have bankrupt.
In 2024, the Group of Companies will be making a small dividends payment of $11, 431 to its Shareholder – Acho Dene Koe First Nation. While small, this is respectable as Beaver Enterprises LP witnessed a decline in activities as most of the oil and gas companies paused their activities in 2023 and the highways contract for remediation of the Liard Highway was near conclusion and the Prairie Creek Mine All-Seasons Road remains delayed in tendering.
Putting People to Work:
All of this has allowed for greater profits to occur, and this has resulted in more profit sharing with employees (through hourly rate increases occurring each of the last three years inline with cost of inflation) and providing of dividends to the Shareholder. In the last two years we have increased the pension plan contributions of the employer, implemented group benefits and instilled a sick and vacation benefits accordance to legislation.
Reflecting on the 2020-2025 Business Plan
Mid-2019 under the previous management, work was undertaken by the former President and CEO and the Directors to prepare the first Business Plan for the Group of Companies. Facilitated by Western Business Consultants a plan was created to focus the efforts of the companies strategically.
The world however changed drastically just shortly after the plan was created and there for it has been challenging to advance the initiatives identified. Covid hit the world, the pandemic impacted business operations and opportunities changed, the Northwest Territories was closed off to Canada and the rest of the world for all sense and purposes and the oil and gas industry has since taken a drastic hit with the shift to greener energy and how the oil and gas industry assesses opportunities has changed which for the most part has left Northern Canada on the sidelines as the cost of producing gas and oil out of the North is just not profitable currently.
This dramatic change in the world economy for oil, gas, and mining was unfortunately not anticipated by the Government of Northwest Territories nor Indigenous businesses and business planning didn’t reflect or anticipate. The pandemic and the impacts following have addressed the critical need to develop new relationships and partnerships outside of oil and gas.
A little later in this report we will speak to those new opportunities being created through ADK Holdings Ltd.’s business development arm.
This dramatic change in the world economy for oil, gas, and mining was unfortunately not anticipated by the Government of Northwest Territories nor Indigenous businesses and business planning didn’t reflect or anticipate. The pandemic and the impacts following have addressed the critical need to develop new relationships and partnerships outside of oil and gas.
A little later in this report we will speak to those new opportunities being created through ADK Holdings Ltd.’s business development arm.
What Has Been Accomplished In The Last 4 Years
Strategic Performance: Create Diversified Growth
To achieve profitability increase the Group of Companies needed to diversify and optimize the existing revenue streams and be less dependent on Beaver Enterprises relationship to Oil and Gas. To achieve this, new partnerships needed to be created, securing government contracts, and expanded into new businesses.
Strategic Performance: Retain Qualified People
To develop and sustain the personnel and culture required to pursue strategic initiatives by developing human resources plans and practices that are aligned with principle of hiring qualified people and supporting values of accountability and staff development.
The success can be seen in key governance position of the Board being filled with qualified and experienced businesspeople who can contribute to the strategic direction for the Group of Companies and the second the percentage of key leaders completing governance training that leads to an increase in their capacity to carry out their leadership roles as directors.
Third, key management positions are defined and hired including Chief Financial Officer, Business Development Manager, Human Resources Manager, and Senior Projects Manager.
And four, that the Group of Companies work with its Shareholder to develop a database of qualified and ready citizens of the membership for the workforce.
Strategic Performance: Beneficial Relationships
To intentionally build relationships with partners and allies that support and contribute to the business strategy. Key target groups are industry, financial/funding, First Nations, federal, provincial and municipal governments and Indigenous industry associations.
The key success factors can be seen by having mutually beneficial relationships with First Nations – in particular Fort Nelson First Nation and our closest Dehcho First Nation neighbors, having access to resources, being seen as a preferred supplier for key industries, and being aware of and act ahead of government policy changes.
The key success factors can be seen by having mutually beneficial relationships with First Nations – in particular Fort Nelson First Nation and our closest Dehcho First Nation neighbors, having access to resources, being seen as a preferred supplier for key industries, and being aware of and act ahead of government policy changes.
Strategic Performance: Engaged Community
To build and manage the relationship with the community of Fort Liard and the citizens of the Acho Dene Koe First Nation both through Chief and Council engagement and active engagement of the citizens. Key principles include honest communication and transparency. Issues raised are addressed and communicated.
The success factors appear to be simple but often the most complex of strategic initiatives. They are that the Stakeholder (Chief and Council of Acho Dene) is informed and supportive of the business operations and development and that the citizens of Acho Dene Koe First Nation are informed and supportive of activities of the business of the First Nation.
Strategic Performance: Financial Stability
To develop and maintain the financial capacity to enable growth in a risk averse fashion. The key success factors identified at the time in 2020 included: Our financial (banking) partner is supportive. Key ratio standards in place and achieved: Income statement, Gross margins; Operating expense ratio: revenue/expenses; Earnings before interest, taxes, depreciation, and amortization. Plus, return on Assets; Managed Debt/Equity; and Access to capital required for growth strategy.