Fiscal 2023 Highlights
- Revenue of
$735.7 million , an increase of 13.1% over the prior year. - EBITDA(1) of
$144.2 million (or$1.74 per share), up from$114.1 million last year. - Net earnings of
$74.9 million (or$0.90 per share), up 40% from last year. - Net cash(1) grew by
$60.9 million during the year to$59.3 million . - Achieved new milestone of 9.4 million Lost Time Injury (“LTI”) free hours and an LTI Rate of 0.05, a new record in the Company’s history.
Q4 2023 Highlights
- Revenue of
$185.0 million , a decrease of 2.6% over the same period last year. - EBITDA of
$37.2 million (or$0.45 per share), down from$40.7 million over the same period last year. - Net earnings of
$20.8 million (or$0.25 per share), down 7% over the same period last year. - Robust activity levels returned after a slower start to the quarter.
“In fiscal year 2023, Major Drilling generated the second highest annual revenue in the Company’s history at a time where mineral exploration expenditures are still only at 60% of the amount spent at the peak in 2012. Our strong EBITDA allowed us to grow our net cash position by over
“A solid financial performance allowed the Company to generate
“Looking ahead to fiscal 2024, the outlook for Major Drilling remains extremely positive as most industry experts believe the anticipated copper supply deficit will further drive the urgent need to replenish reserves. We see an increasing number of global governments begin to address the energy transition every year, turning to renewable energy sources and upgrading their electric grids. This will require an enormous volume of copper, and likely uranium, increasing pressure on the existing supply/demand dynamic. The growing global demand for electric vehicles will only increase the need for metals like copper, nickel and lithium. We expect all of this to lead to substantial additional investments in copper and other base metal exploration projects as we help our customers discover the metals that will allow the world to accelerate its efforts toward decarbonization,” said
“Gold continues to lead exploration efforts globally with the average gold mine life decreasing due to the lack of exploration over the last several years. With this growing supply shortfall, several of our senior gold customers have committed to prioritizing value-adding grassroots exploration and development. Many of the new mineral deposits are located in areas challenging to access, requiring complex drilling solutions, and increasing demand for Major Drilling’s specialized services. Our position as the leader in specialized drilling continues to be a factor in attracting business from senior companies, at a time where juniors are facing difficulty financing projects.”
“Despite the urgent need to replenish mineral reserves, both for gold and base metals, the industry is still early in the exploration cycle. According to
“As part of our ongoing efforts to prepare for future increases in activity, and what is lining up to be a busy calendar 2024, the Company expects to spend approximately
In millions of Canadian dollars (except earnings per share) | Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | ||||||||
Revenue | $ | 185.0 | $ | 190.0 | $ | 735.7 | $ | 650.4 | ||||
Gross margin | 25.0 | % | 25.5 | % | 24.0 | % | 21.5 | % | ||||
Adjusted gross margin (1) | 30.8 | % | 31.0 | % | 30.0 | % | 27.7 | % | ||||
EBITDA (1) | 37.2 | 40.7 | 144.2 | 114.1 | ||||||||
As percentage of revenue | 20.1 | % | 21.4 | % | 19.6 | % | 17.5 | % | ||||
Net earnings | 20.8 | 22.4 | 74.9 | 53.5 | ||||||||
Earnings per share | 0.25 | 0.27 | 0.90 | 0.65 |
(1) See “Non-IFRS Financial Measures”
Fourth Quarter Ended
Total revenue for the quarter was
Revenue for the quarter from
South and Central American revenue decreased by 5.5% to
Australasian and African revenue increased by 20.8% to
Gross margin percentage for the quarter was 25.0%, compared to 25.5% for the same period last year. Depreciation expense, totaling
General and administrative costs were
Other expenses were
The income tax provision for the quarter was an expense of
Net earnings were
Fiscal Year Ended
Total revenue for the year was
Revenue for the year from
South and Central American revenue increased by 10% to
Australasian and African revenue increased by 24% to
Gross margin percentage for the year was 24.0%, compared to 21.5% for the previous year. Depreciation expense totaling
General and administrative costs were
Other expenses were
Foreign exchange loss was
The income tax provision for the year was an expense of
Net earnings were
Non-IFRS Financial Measures
The Company’s financial data has been prepared in accordance with IFRS, with the exception of certain financial measures detailed below. The measures below have been used consistently by the Company’s management team in assessing operational performance on both segmented and consolidated levels, and in assessing the Company’s financial strength. The Company believes these non-IFRS financial measures are key, for both management and investors, in evaluating performance at a consolidated level and are commonly reported and widely used by investors and lending institutions as indicators of a company’s operating performance and ability to incur and service debt, and as a valuation metric. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted gross profit/margin - excludes depreciation expense:
(in $000s CAD) | Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | |||||||||||
Total revenue | $ | 184,966 | $ | 189,975 | $ | 735,742 | $ | 650,415 | |||||||
Less: direct costs | 138,680 | 141,527 | 558,841 | 510,642 | |||||||||||
Gross profit | 46,286 | 48,448 | 176,901 | 139,773 | |||||||||||
Add: depreciation | 10,760 | 10,416 | 43,651 | 40,579 | |||||||||||
Adjusted gross profit | 57,046 | 58,864 | 220,552 | 180,352 | |||||||||||
Adjusted gross margin | 30.8 | % | 31.0 | % | 30.0 | % | 27.7 | % | |||||||
EBITDA - earnings before interest, taxes, depreciation, and amortization:
(in $000s CAD) | Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | |||||||||
Net earnings | $ | 20,790 | $ | 22,433 | $ | 74,922 | $ | 53,459 | |||||
Finance (revenues) costs | (668 | ) | 385 | (832 | ) | 1,629 | |||||||
Income tax provision | 5,317 | 6,471 | 22,650 | 15,025 | |||||||||
Depreciation and amortization | 11,778 | 11,440 | 47,478 | 43,981 | |||||||||
EBITDA | $ | 37,217 | $ | 40,729 | $ | 144,218 | $ | 114,094 | |||||
Net cash (debt) – cash net of debt, excluding lease liabilities reported under IFRS 16 Leases:
(in $000s CAD) | |||||||
Cash | $ | 94,432 | $ | 71,260 | |||
Contingent consideration | (15,113 | ) | (22,907 | ) | |||
Long-term debt | (19,972 | ) | (50,000 | ) | |||
Net cash (debt) | $ | 59,347 | $ | (1,647 | ) | ||
Forward-Looking Statements
This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this news release that address future events, developments, or performance that the Company expects to occur (including management’s expectations regarding the Company’s objectives, strategies, financial condition, results of operations, cash flows and businesses) are forward-looking statements. Forward-looking statements are typically identified by future or conditional verbs such as “outlook”, “believe”, “anticipate”, “estimate”, “project”, “expect”, “intend”, “plan”, and terms and expressions of similar import. All forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management related to the factors set forth below. While these factors and assumptions are considered reasonable by the Company as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information.
Such forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to: the level of activity in the mining industry and the demand for the Company’s services; competitive pressures; global and local political and economic environments and conditions; the level of funding for the Company’s clients (particularly for junior mining companies); exposure to currency movements (which can affect the Company’s revenue in Canadian dollars); the integration of business acquisitions and the realization of the intended benefits of such acquisitions; efficient management of the Company’s growth; currency restrictions; safety of the Company’s workforce; risks and uncertainties relating to climate change and natural disaster; the Company’s dependence on key customers; the geographic distribution of the Company’s operations; the impact of operational changes; changes in jurisdictions in which the Company operates (including changes in regulation); failure by counterparties to fulfill contractual obligations; disease outbreak; as well as other risk factors described under “General Risks and Uncertainties” in the Company’s MD&A for the year ended
Forward-looking statements made in this document are made as of the date of this document and the Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events, or for any other reasons, except as required by applicable securities laws.
About Major Drilling
Webcast/Conference Call Information
To participate in the conference call, please dial 416-340-2217, participant passcode 7282992# and ask for Major Drilling’s Fourth Quarter Results Conference Call. To ensure your participation, please call in approximately five minutes prior to the scheduled start of the call.
For those unable to participate, a taped rebroadcast will be available approximately one hour after the completion of the call until
For further information:
Tel: (506) 857-8636
ir@majordrilling.com
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands of Canadian dollars, except per share information) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
TOTAL REVENUE | $ | 184,966 | $ | 189,975 | $ | 735,742 | $ | 650,415 | |||||||
DIRECT COSTS | 138,680 | 141,527 | 558,841 | 510,642 | |||||||||||
GROSS PROFIT | 46,286 | 48,448 | 176,901 | 139,773 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
General and administrative | 16,290 | 15,219 | 64,957 | 57,043 | |||||||||||
Other expenses | 3,978 | 3,419 | 13,358 | 11,767 | |||||||||||
(Gain) loss on disposal of property, plant and equipment | (143 | ) | (135 | ) | (912 | ) | (546 | ) | |||||||
Foreign exchange (gain) loss | 722 | 656 | 2,758 | 1,396 | |||||||||||
Finance (revenues) costs | (668 | ) | 385 | (832 | ) | 1,629 | |||||||||
20,179 | 19,544 | 79,329 | 71,289 | ||||||||||||
EARNINGS BEFORE INCOME TAX | 26,107 | 28,904 | 97,572 | 68,484 | |||||||||||
INCOME TAX EXPENSE (RECOVERY) | |||||||||||||||
Current | 5,458 | 5,833 | 22,788 | 13,285 | |||||||||||
Deferred | (141 | ) | 638 | (138 | ) | 1,740 | |||||||||
5,317 | 6,471 | 22,650 | 15,025 | ||||||||||||
NET EARNINGS | $ | 20,790 | $ | 22,433 | $ | 74,922 | $ | 53,459 | |||||||
EARNINGS PER SHARE | |||||||||||||||
Basic | $ | 0.25 | $ | 0.27 | $ | 0.90 | $ | 0.65 | |||||||
Diluted | $ | 0.25 | $ | 0.27 | $ | 0.90 | $ | 0.65 | |||||||
Condensed Consolidated Statements of Comprehensive Earnings | |||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
NET EARNINGS | $ | 20,790 | $ | 22,433 | $ | 74,922 | $ | 53,459 | |||||||
OTHER COMPREHENSIVE EARNINGS | |||||||||||||||
Items that may be reclassified subsequently to profit or loss | |||||||||||||||
Unrealized gain (loss) on foreign currency translations | 1,813 | 3,523 | 16,882 | 7,407 | |||||||||||
Unrealized gain (loss) on derivatives (net of tax) | (1,844 | ) | 854 | (1,573 | ) | 469 | |||||||||
COMPREHENSIVE EARNINGS | $ | 20,759 | $ | 26,810 | $ | 90,231 | $ | 61,335 | |||||||
Condensed Consolidated Statements of Changes in Equity | |||||||||||||||||||||||
For the twelve months ended | |||||||||||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||||||||||
Retained | |||||||||||||||||||||||
earnings | Other | Share-based | Foreign currency | ||||||||||||||||||||
Share capital | (deficit) | reserves | payments reserve | translation reserve | Total | ||||||||||||||||||
BALANCE AS AT | $ | 243,379 | $ | (22,456 | ) | $ | 1,067 | $ | 5,559 | $ | 52,614 | $ | 280,163 | ||||||||||
Share issue | 12,911 | - | - | - | - | 12,911 | |||||||||||||||||
Exercise of stock options | 6,893 | - | - | (1,913 | ) | - | 4,980 | ||||||||||||||||
Share-based compensation | - | - | - | 369 | - | 369 | |||||||||||||||||
Stock options expired/forfeited | - | 19 | - | (19 | ) | - | - | ||||||||||||||||
263,183 | (22,437 | ) | 1,067 | 3,996 | 52,614 | 298,423 | |||||||||||||||||
Comprehensive earnings: | |||||||||||||||||||||||
Net earnings | - | 53,459 | - | - | - | 53,459 | |||||||||||||||||
Unrealized gain (loss) on foreign currency translations | - | - | - | - | 7,407 | 7,407 | |||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | 469 | - | - | 469 | |||||||||||||||||
Total comprehensive earnings | - | 53,459 | 469 | - | 7,407 | 61,335 | |||||||||||||||||
BALANCE AS AT | 263,183 | 31,022 | 1,536 | 3,996 | 60,021 | 359,758 | |||||||||||||||||
Exercise of stock options | 2,888 | - | - | (808 | ) | - | 2,080 | ||||||||||||||||
Share-based compensation | - | - | - | 508 | - | 508 | |||||||||||||||||
266,071 | 31,022 | 1,536 | 3,696 | 60,021 | 362,346 | ||||||||||||||||||
Comprehensive earnings: | |||||||||||||||||||||||
Net earnings | - | 74,922 | - | - | - | 74,922 | |||||||||||||||||
Unrealized gain (loss) on foreign currency translations | - | - | - | - | 16,882 | 16,882 | |||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | (1,573 | ) | - | - | (1,573 | ) | |||||||||||||||
Total comprehensive earnings | - | 74,922 | (1,573 | ) | - | 16,882 | 90,231 | ||||||||||||||||
BALANCE AS AT | $ | 266,071 | $ | 105,944 | $ | (37 | ) | $ | 3,696 | $ | 76,903 | $ | 452,577 | ||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
OPERATING ACTIVITIES | |||||||||||||||
Earnings before income tax | $ | 26,107 | $ | 28,904 | $ | 97,572 | $ | 68,484 | |||||||
Operating items not involving cash | |||||||||||||||
Depreciation and amortization | 11,778 | 11,440 | 47,478 | 43,981 | |||||||||||
(Gain) loss on disposal of property, plant and equipment | (143 | ) | (135 | ) | (912 | ) | (546 | ) | |||||||
Share-based compensation | 131 | 96 | 508 | 369 | |||||||||||
Finance (revenues) costs recognized in earnings before income tax | (668 | ) | 385 | (832 | ) | 1,629 | |||||||||
37,205 | 40,690 | 143,814 | 113,917 | ||||||||||||
Changes in non-cash operating working capital items | (29,772 | ) | (33,210 | ) | (6,911 | ) | (11,601 | ) | |||||||
Finance revenues received (costs paid) | 668 | (385 | ) | 832 | (1,629 | ) | |||||||||
Income taxes paid | (7,559 | ) | (2,146 | ) | (24,549 | ) | (5,814 | ) | |||||||
Cash flow from (used in) operating activities | 542 | 4,949 | 113,186 | 94,873 | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||
Repayment of lease liabilities | (284 | ) | (363 | ) | (1,688 | ) | (1,371 | ) | |||||||
Repayment of long-term debt | - | - | (30,000 | ) | (355 | ) | |||||||||
Issuance of common shares due to exercise of stock options | 212 | 2,079 | 2,080 | 4,980 | |||||||||||
Proceeds from draw on long-term debt | - | - | - | 35,000 | |||||||||||
Cash flow from (used in) financing activities | (72 | ) | 1,716 | (29,608 | ) | 38,254 | |||||||||
INVESTING ACTIVITIES | |||||||||||||||
Business acquisitions (net of cash acquired) | - | - | (8,789 | ) | (38,050 | ) | |||||||||
Acquisition of property, plant and equipment | (16,610 | ) | (14,958 | ) | (58,690 | ) | (49,939 | ) | |||||||
Proceeds from disposal of property, plant and equipment | 199 | 242 | 3,501 | 2,144 | |||||||||||
Cash flow from (used in) investing activities | (16,411 | ) | (14,716 | ) | (63,978 | ) | (85,845 | ) | |||||||
Effect of exchange rate changes | 809 | 1,005 | 3,572 | 1,619 | |||||||||||
INCREASE (DECREASE) IN CASH | (15,132 | ) | (7,046 | ) | 23,172 | 48,901 | |||||||||
CASH, BEGINNING OF THE PERIOD | 109,564 | 78,306 | 71,260 | 22,359 | |||||||||||
CASH, END OF THE PERIOD | $ | 94,432 | $ | 71,260 | $ | 94,432 | $ | 71,260 | |||||||
Condensed Consolidated Balance Sheets | |||||||
As at | |||||||
(in thousands of Canadian dollars) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash | $ | 94,432 | $ | 71,260 | |||
Trade and other receivables | 137,633 | 142,621 | |||||
Income tax receivable | 2,336 | 2,037 | |||||
Inventories | 115,128 | 96,782 | |||||
Prepaid expenses | 10,996 | 8,960 | |||||
360,525 | 321,660 | ||||||
PROPERTY, PLANT AND EQUIPMENT | 215,085 | 198,196 | |||||
RIGHT-OF-USE ASSETS | 5,637 | 5,479 | |||||
DEFERRED INCOME TAX ASSETS | 4,444 | 4,351 | |||||
22,690 | 22,798 | ||||||
INTANGIBLE ASSETS | 3,304 | 4,596 | |||||
$ | 611,685 | $ | 557,080 | ||||
LIABILITIES | |||||||
CURRENT LIABILITIES | |||||||
Trade and other payables | $ | 102,144 | $ | 102,596 | |||
Income tax payable | 3,674 | 5,022 | |||||
Current portion of lease liabilities | 1,617 | 1,502 | |||||
Current portion of contingent consideration | 7,138 | 8,619 | |||||
114,573 | 117,739 | ||||||
LEASE LIABILITIES | 3,965 | 3,885 | |||||
CONTINGENT CONSIDERATION | 7,975 | 14,288 | |||||
LONG-TERM DEBT | 19,972 | 50,000 | |||||
DEFERRED INCOME TAX LIABILITIES | 12,623 | 11,410 | |||||
159,108 | 197,322 | ||||||
SHAREHOLDERS' EQUITY | |||||||
Share capital | 266,071 | 263,183 | |||||
Retained earnings | 105,944 | 31,022 | |||||
Other reserves | (37 | ) | 1,536 | ||||
Share-based payments reserve | 3,696 | 3,996 | |||||
Foreign currency translation reserve | 76,903 | 60,021 | |||||
452,577 | 359,758 | ||||||
$ | 611,685 | $ | 557,080 | ||||
SELECTED FINANCIAL INFORMATION FOR THE THREE AND TWELVE MONTHS ENDED (in thousands of Canadian dollars) |
SEGMENTED INFORMATION
The Company’s operations are divided into three geographic segments corresponding to its management structure:
Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | ||||||||||||
Revenue | |||||||||||||||
$ | 99,769 | $ | 109,115 | $ | 405,049 | $ | 366,662 | ||||||||
South and | 45,054 | 47,663 | 166,759 | 151,613 | |||||||||||
40,143 | 33,197 | 163,934 | 132,140 | ||||||||||||
$ | 184,966 | $ | 189,975 | $ | 735,742 | $ | 650,415 | ||||||||
*
Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | ||||||||||||
Earnings from operations | |||||||||||||||
$ | 14,090 | $ | 24,183 | $ | 66,297 | $ | 59,098 | ||||||||
South and | 7,878 | 7,383 | 23,440 | 6,353 | |||||||||||
7,194 | 2,198 | 21,967 | 18,205 | ||||||||||||
29,162 | 33,764 | 111,704 | 83,656 | ||||||||||||
Finance (revenues) costs | (668 | ) | 385 | (832 | ) | 1,629 | |||||||||
General and corporate expenses** | 3,723 | 4,475 | 14,964 | 13,543 | |||||||||||
Income tax | 5,317 | 6,471 | 22,650 | 15,025 | |||||||||||
8,372 | 11,331 | 36,782 | 30,197 | ||||||||||||
Net earnings | $ | 20,790 | $ | 22,433 | $ | 74,922 | $ | 53,459 | |||||||
**General and corporate expenses include expenses for corporate offices, stock options and certain unallocated costs.
Q4 2023 | Q4 2022 | YTD 2023 | YTD 2022 | ||||||||||||
Depreciation and amortization | |||||||||||||||
$ | 5,653 | $ | 5,568 | $ | 23,205 | $ | 20,579 | ||||||||
South and | 2,593 | 2,450 | 10,612 | 9,896 | |||||||||||
3,386 | 3,803 | 13,020 | 12,953 | ||||||||||||
Unallocated and corporate assets | 146 | (381 | ) | 641 | 553 | ||||||||||
Total depreciation and amortization | $ | 11,778 | $ | 11,440 | $ | 47,478 | $ | 43,981 |
Source:
2023 GlobeNewswire, Inc., source