Citing a restructuring plan formulated to deal with poor 1998earnings, Aquila Energy’s Aquila Gas Pipeline Corp. (AQP)announced Tuesday it will cut 60 people from its staff of 310. Thecuts will inflict a $1.7 million pre tax charge on the company’searnings.
In 1998, AQP fell prey to low oil and gas prices. The companywas set to be auctioned off over the summer but was taken off theauction block when low gas liquids prices threatened AquilaEnergy’s ability to realize full value.
For the year, AQP’s net income was $4.9 million or $.17 pershare compared to 1997 net income of $25.2 million or $.86 pershare. Cash flow from operations was $32.6 million in 1998, downfrom the 1997 level of $56.7 million.
“To be viable in this environment, we had to take a hard look atour business processes and our structure to determine the best wayto run our business going forward,” said Joe Becraft, CEO of AquilaGas Pipeline. “The reorganization announced today was developed asa result of this undertaking.”
The company, which is 82% owned by Aquila Energy, expects themeasures to save up to $5 million annually. The layoffs will occurin the San Antonio headquarters and various field locations.
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