In Q2 2023,
As previously announced, Co-founders
Key facts of the Q2 2023 include:
Robust Revenue Growth: | Revenue reached |
Strong EBITDA Margin: | Standing at |
Consistent Rig Utilization Rates: | Maintained at 59%, comparable to Q2 2022. While there were regional disparities, the |
Solid TTM Performance: | Trailing Twelve Months (TTM) revenue and EBITDA were reported at |
Income Statement
(In thousands of US$) | Three-month period | Six-month period | ||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenue | 100,066 | 86,498 | 188,444 | 154,239 | ||||
Gross profit (1) | 25,964 | 18,787 | 47,082 | 28,348 | ||||
As a percentage of sales | 25.9 % | 21.7 % | 25.0 % | 18.4 % | ||||
EBITDA | 23,812 | 17,867 | 42,943 | 26,394 | ||||
As a percentage of sales | 23.8 % | 20.7 % | 22.8 % | 17.1 % | ||||
Operating profit | 18,857 | 12,617 | 33,071 | 16,227 | ||||
As a percentage of sales | 18.8 % | 14.6 % | 17.5 % | 10.5 % | ||||
Net profit for the period | 11,054 | 7,164 | 19,055 | 7,942 | ||||
Attributable to: | ||||||||
Equity holders of the Company | 8,814 | 5,059 | 15,449 | 4,887 | ||||
Non-controlling interests | 2,240 | 2,105 | 3,606 | 3,055 | ||||
EPS (in US cents) | ||||||||
Basic | 8.92 | 5.12 | 15.61 | 4.95 | ||||
Diluted | 8.73 | 4.99 | 15.29 | 4.82 |
(1) This line item includes amortization and depreciation expenses related to operations
Highlights – Q2 2023
Revenue
- In Q2 2023, Foraco's revenue rose to
US$ 100.1 million , marking a 16% increase from theUS$ 86.5 million generated in Q2 2022. This growth is attributed to the solid performance of main contracts.
Profitability
- Q2 2023 gross margin, including depreciation within cost of sales, reached
US$ 26.0 million (representing 25.9% of revenue), a substantial increase of 39% from theUS$ 18.8 million (or 21.7% of revenue) recorded in Q2 2022. The uplift was driven by the satisfactory performance of contracts and an increase contribution of value-added drilling services. - For the quarter, EBITDA totaled
US$ 23.8 million (or 23.8% of revenue), a 33% increase from theUS$ 17.9 million (or 20.7% of revenue) for the corresponding quarter of the previous year." - The Free Cash Flow before debt service for the period stood at
US$ 11.3 million . The company had anticipated the increased working capital requirements corresponding to the robust revenue growth seen in H1.
Highlights – H1 2023
Revenue
- For the six-month period ending
June 30, 2023 (H1 2023), the revenue amounted toUS$ 188.4 million , a 22% increase fromUS$ 154.2 million in H1 2022. This surge in revenue is due to the solid performance of main contracts and the delivery of more-added drilling services.
Profitability
- In H1 2023, the gross margin, inclusive of depreciation within cost of sales, was
US$ 47.1 million (or 25.0% of revenue), a significant 66% increase fromUS$ 28.3 million (or 18.4% of revenue) in H1 2022. This boost resulted from good contract performance, improved selling prices, and the delivery of more value-added drilling services. - During H1, EBITDA amounted to
US$ 42.9 million (or 22.8% of revenue), a 63% increase fromUS$ 26.4 million (or 17.1% of revenue) for the same period last year.
Financial results
Revenue
(In thousands of US$) - (unaudited) | Q2 2023 | % change | Q2 2022 | H1 2023 | % change | H1 2022 |
Reporting segment | ||||||
Mining................................................................................. | 87,933 | 20 % | 73,453 | 162,452 | 22 % | 132,804 |
Water.................................................................................. | 12,133 | -7 % | 13,045 | 25,992 | 21 % | 21,435 |
Total revenue..................................................................... | 100,066 | 16 % | 86,498 | 188,444 | 22 % | 154,239 |
Geographic region | ||||||
39,016 | 56 % | 25,001 | 70,158 | 54 % | 45,700 | |
31,176 | 17 % | 26,598 | 60,902 | 26 % | 48,198 | |
16,731 | 20 % | 13,910 | 32,738 | 35 % | 24,184 | |
13,143 | -37 % | 20,989 | 24,645 | -32 % | 36,158 | |
Total revenue..................................................................... | 100,066 | 16 % | 67,740 | 188,444 | 22 % | 154,239 |
Q2 2023
The company's quarterly revenue experienced a 16% surge, escalating from
The uptick in the Mining segment's revenue can be attributed to favorable market dynamics. Long-term rolling contracts, renegotiated and extended last year, coupled with the company's proven delivery capability, played a crucial role. In the water segment, revenue experienced a slight dip due to the phasing of contracts.
North American operations reported a 17% revenue increase, reaching
South American revenue swelled by 56% to
In the
Revenue for the EMEA region saw a 37% decrease, moving down to
H1 2023
The uptick in revenue for the Mining and Water segments can be attributed to favorable market dynamics, with the Company having renegotiated and extended its long-term rolling contracts since the previous year. Coupled with the Company's proven capacity to deliver, this has generated significant growth.
North American operations saw a 26% surge in activity, with revenues climbing to
In
In the
In the EMEA region, revenue for H1 2023 was
Gross profit
(In thousands of US$) - (unaudited) | Q2 2023 | % change | Q2 2022 | H1 2023 | % change | H1 2022 |
Reporting segment | ||||||
Mining................................................................................. | 22,846 | 47 % | 15,511 | 40,490 | 74 % | 23,226 |
Water.................................................................................. | 3,118 | -5 % | 3,276 | 6,592 | 29 % | 5,121 |
Total gross profit / (loss) .................................................. | 25,964 | 38 % | 18,787 | 47,082 | 66 % | 28,347 |
Q2 2023
For Q2 2023, the gross margin, inclusive of depreciation within cost of sales, reached
H1 2022
In H1 2023, the gross margin, inclusive of depreciation within the cost of sales, rose to
Selling, General and Administrative Expenses
(In thousands of US$) - (unaudited) | Q2 2023 | % change | Q2 2022 | H1 2023 | % change | H1 2022 |
Selling, general and administrative expenses |
7,107 |
15 % |
6,170 |
14,011 |
16 % |
12,121 |
Q2 2023
SG&A increased compared to the same quarter last year mainly due to the level of activity. As a percentage of revenue, SG&A remained stable at 7.1% of the revenue.
H1 2023
SG&A increased compared to the same quarter last year mainly due to the level of activity. As a percentage of revenue, SG&A decreased from 7.9% in H1 2022 to 7.4% in H1 2023.
Operating result
(In thousands of US$) - (unaudited) | Q2 2023 | % change | Q2 2022 | H1 2023 | % change | H1 2022 | |
Reporting segment | |||||||
Mining ........................................................................................................... | 16,601 | 62 % | 10,272 | 28,424 | 123 % | 12,773 | |
Water............................................................................................................. | 2,256 | -4 % | 2,345 | 4,647 | 35 % | 3,453 | |
Total operating profit / (loss) ....................................................................... | 18,857 | 49 % | 12,617 | 33,071 | 104 % | 16,226 |
Q2 2023
The operating profit reached
H1 2023
The operating profit reached
Financial position
The following table provides a summary of the Company's cash flows for H1 2023 and H1 2022:
(In thousands of US$) | H1 2023 | H1 2022 |
Cash generated by operations before working capital requirements | 42,943 | 26,394 |
Working capital requirements | (14,264) | (12,427) |
Income tax paid | (5,636) | (3,980) |
Purchase of equipment in cash | (14,162) | (8,574) |
Free Cash Flow before debt servicing | 8,881 | 1,412 |
Debt variance | 5,328 | 3,252 |
Interests paid | (6,824) | (4,645) |
Acquisition of treasury shares | (609) | (749) |
Dividends paid to non-controlling interests | (699) | - |
Net cash generated / (used in) financing activities | (2,804) | (2,142) |
Net cash variation | 6,077 | (730) |
Foreign exchange differences | (595) | 397 |
Variation in cash and cash equivalents | 5,482 | (332) |
Cash and cash equivalents at the end of the period | 34,890 | 23,592 |
In H1 2023, the cash generated from operations before working capital requirements amounted to
During the same period, the working capital requirements reached
During the period, Capex totaled
Strategy
The Company's strategy is to assist its customers in exploring or managing their deposits throughout the entire cycle, with a special focus on the life of mines extension activity. The Company intends to continue developing and growing its services across the world with a focus on stable jurisdictions, high tech drilling services, optimal commodities mix including battery metals and gold - with a significant presence in water related drilling services - and a gradual implementation of advanced digital applications. The Company expects to execute its strategy primarily through organic growth and targeted acquisitions.
The Company addressed the environmental, social and governance (ESG) requirements, and implements a pragmatic and measurable approach to ESG with quantitative KPIs to maximize improvement and efficiencies.
Currency exchange rates.
The exchange rates for the periods under review are provided in the Management's Discussion and Analysis of Q2 2023.
Non-IFRS measures
EBITDA represents Net income before interest expense, income taxes, depreciation, amortization and non-cash share based compensation expenses. EBITDA is a non-IFRS quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations. The Company believes that the presentation of EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the drilling industry. EBITDA is not defined in IFRS and should not be considered to be an alternative to Profit for the period or Operating profit or any other financial metric required by such accounting principles.
Net debt corresponds to the current and non-current portions of borrowings and the consideration payable related to acquisitions, net of cash and cash equivalents.
Reconciliation of the EBITDA is as follows:
(In thousands of US$) (unaudited) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
Operating profit / (loss)................................................................................... | 18,857 | 12,617 | 33,071 | 16,227 |
Depreciation expense ...................................................................................... | 4,866 | 5,170 | 9,692 | 10,018 |
Non-cash employee share-based compensation............................................. | 90 | 70 | 180 | 150 |
EBITDA ............................................................................................................. | 23,812 | 17,867 | 42,943 | 26,394 |
Conference call and webcast
On
You can join the call by dialing 1-888-664-6392 or 1-416-764-8659. You will be put on hold until the conference call begins. A live audio webcast of the Conference Call will also be available
https://app.webinar.net/dOAgJKoJLl6
An archived replay of the webcast will be available for 90 days.
About
"Neither TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release."
Caution concerning forward-looking statements
This document may contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. These statements and information include estimates, forecasts, information and statements as to Management's expectations with respect to, among other things, the future financial or operating performance of the Company and capital and operating expenditures. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", and "scheduled" or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the heading "Risk Factors" in the Company's Annual Information Form dated
SOURCE
© Canada Newswire, source