Foraco International reports Q1 2024
- Revenue:
US$ 77.1 m compared toUS$ 88.4 m in Q1 2023 (-13%). - Q1 2024 revenue is the second-best Q1 quarter of the last decade (+14% vs Q1 2022).
- During Q1 2024, several customers postponed the resumption of activities in January compared to 2023 which was partially recovered in the second part of the quarter.
- Gross Margin:
US$ 16.8 m, or 21.8% of revenue (vs 23.9% in Q1 2023) - EBITDA:
US$ 17.6 m, or 22.8% of revenue (vs 21.6% in Q1 2023) - Net Profit:
US$ 8.5 m, or 11.0% of revenue (vs 9.1% in Q1 2023) - EPS to equity holders: 8.78 US cents vs 6.56 US cents in Q1 2023 (+34% QoQ)
Income Statement
(In thousands of US$) |
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Three-month period
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2024 |
2023 |
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Revenue |
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77,089 |
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88,378 |
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Gross profit (1) |
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16,812 |
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21,118 |
As a percentage of sales |
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21.8 % |
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23.9 % |
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EBITDA |
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17,574 |
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19,130 |
As a percentage of sales |
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22.8 % |
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21.6 % |
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Operating profit |
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12,624 |
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14,214 |
As a percentage of sales |
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16.4 % |
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16.1 % |
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Net profit for the period |
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8,464 |
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8,001 |
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Attributable to: |
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Equity holders of the Company |
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8,846 |
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6,635 |
Non-controlling interests |
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(382) |
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1,366 |
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EPS (in US cents) |
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Basic |
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8.96 |
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6.70 |
Diluted |
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8.78 |
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6.56 |
(1) includes amortization and depreciation expenses related to operations. |
Highlights – Q1 2024
Revenue
- Q1 2024 revenue amounted to
US$ 77.1 million compared toUS$ 88.4 million in Q1 2023, a decrease of 13%. - Q1 2024 revenue remains the second-best first quarter of the last decade (+14% vs Q1 2022).
- In Q1 2023, most contracts were remobilized particularly early. Delays noted in the first part of Q1 2024 were partially compensated by a robust rebound in activity towards the end of the quarter.
Profitability
- Q1 2024 gross margin including depreciation within cost of sales was
US$ 16.8 million (or 21.8% of revenue) compared toUS$ 21.1 million (or 23.9% of revenue) in Q1 2023, the temporary revenue dip, leading to some under-absorption of fixed costs. - During the quarter, EBITDA amounted to
US$ 17.6 million (or 22.8% of revenue) compared toUS$ 19.1 million (or 21.6% of revenue) for the same quarter last year. - The Free Cash Flow for the period was
US$ (19.0) million mainly explained by the working capital requirements resulting from the higher activity in the second part of the quarter and the capex required in the first quarter to support the upcoming activity.
(In thousands of US$) - (unaudited) |
Q1 2024 |
% change |
Q1 2023 |
Reporting segment |
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Mining |
69,046 |
-7 % |
74,519 |
Water |
8,043 |
-42 % |
13,859 |
Total revenue |
77,089 |
-13 % |
88,378 |
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Geographic region |
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27,023 |
-9 % |
29,726 |
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25,575 |
-18 % |
31,142 |
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14,671 |
-8 % |
16,008 |
|
9,820 |
-15 % |
11,502 |
Total revenue |
77,089 |
-13 % |
88,378 |
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Revenue for the quarter amounted to
During Q1 2024, several customers delayed the resumption of activities in January compared to 2023 which was partially recovered in the second part of the quarter. Rigs utilization rate was 42% in Q1 2024 compared to 53% in Q1 2023.
Activity in
Revenue in
In
In the EMEA, revenue for the quarter was
(In thousands of US$) - (unaudited) |
Q1 2024 |
% change |
Q1 2023 |
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Reporting segment |
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Mining |
15,446 |
-12 % |
17,644 |
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Water |
1,366 |
-60 % |
3,464 |
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Total gross profit |
16,812 |
-20 % |
21,118 |
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The Q1 2024 gross margin including depreciation within cost of sales was
(In thousands of US$) - (unaudited) |
Q1 2024 |
% change |
Q1 2023 |
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Selling, general and administrative expenses |
6,299 |
-9 % |
6,904 |
SG&A decreased compared to the same quarter last year. As a percentage of revenue, SG&A was stable at 8%.
(In thousands of US$) - (unaudited) |
Q1 2024 |
% change |
Q1 2023 |
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Reporting segment |
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Mining |
11,915 |
1 % |
11,823 |
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Water |
709 |
-70 % |
2,391 |
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Total operating profit |
12,624 |
-11 % |
14,214 |
The operating profit was
Liquidity and Capital Resources
The following table provides a summary of the Company's cash flows for Q1 2024 and Q1 2023:
(In thousands of US$) |
Q1 2024 |
Q1 2023 |
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Cash generated by operations before working capital requirements |
17,574 |
19,130 |
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Working capital requirements |
(26,716) |
(10,541) |
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Income tax paid |
(1,904) |
(2,402) |
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Purchase of equipment in cash |
(6,198) |
(8,572) |
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Free Cash Flow before debt servicing |
(17,244) |
(2,385) |
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Proceeds from / (repayment of) debt |
6,400 |
5,250 |
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Interests paid |
(1,710) |
(3,314) |
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Acquisition of treasury shares |
(269) |
(393) |
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Deconsolidation of EDC Russia |
(2,076) |
- |
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Dividends paid to non-controlling interests |
(330) |
(398) |
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Net cash generated / (used in) financing activities |
2,015 |
1,145 |
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Net cash variation |
(15,229) |
(1,241) |
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Foreign exchange differences |
(728) |
(556) |
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Variation in cash and cash equivalents |
(15,958) |
(1,797) |
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Cash and cash equivalents at the end of the period |
18,331 |
27,611 |
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In Q1 2024, the cash generated from operations before working capital requirements amounted to
In Q1 2024, the working capital requirement was
During the period, Capex totaled
As at
In thousands US$ |
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Credit lines |
9,145 |
7,072 |
Long-term debt |
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Within one year |
12,751 |
13,553 |
Between 1 and 2 years |
11,880 |
10,393 |
Between 2 and 3 years |
11,619 |
74,853 |
Between 3 and 4 years |
43,993 |
565 |
Between 4 and 5 years |
8,094 |
- |
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Total |
97,482 |
106,436 |
IFRS 16 |
5,886 |
6,428 |
Cash |
18,331 |
27,611 |
Net Debt |
85,016 |
85,253 |
As at
As at
Bank guarantees as at
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 Q1 2024.
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 as this 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 as 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 of payables related to acquisitions, net of cash and cash equivalents. The Company's lease obligations are included in the net debt calculation.
Reconciliation of EBITDA is as follows:
(In thousands of US$) (unaudited) |
Q1 2024 |
Q1 2023 |
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Operating profit / (loss) |
12,624 |
14,214 |
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Depreciation expense |
4,847 |
4,826 |
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Non-cash employee share-based compensation |
102 |
90 |
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EBITDA |
17,574 |
19,130 |
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"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."
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