Boart boosts 2023 revenue, earnings

Staff reporter

US drilling services and products company Boart Longyear has reported 2023 net profit of US$13.2 million on a 1.2% year-on-year improvement in annual revenue to $1.05 billion ahead of its planned return to private ownership.

Boart said it expected New York-based private equity firm American Industrial Partners’ $371 million acquisition of the company to close in April, which would be followed by its exit from the Australian Securities Exchange. Boart’s ASX listing in 2007 coincided with a A$2.35 billion initial public share issue.

Modest growth in the company’s dominant contract drilling business in 2023, which saw revenue rise 2.1% yoy on higher average pricing to $738.9 million, offset a 0.6% retraction in product sales to $305.6 million (after inter-company activity).

Boart’s fledgling Veracio drilling technology unit contributed $7.1m of full-year revenue ($9m with internal sales).

The group had fewer drilling rigs working in 2023 – an average 288 of 609 ‘available’ units for 47% average fleet utilisation (down again in the December quarter to 46%) – but gained from higher pricing to boost services division EBITDA for the year to $116.5m, up 7.1% yoy.

Total consolidated revenue of $1.1 billion was up 1.2% yoy.

“Adjusted EBITDA of $128.4m expanded 3.4% over 2022, primarily from global products’ improved costs as well as price and volume gains within drilling services,” Boart said.

The company’s $29m acquisition of Sweden’s Minalyze last year “solidified” Veracio’s leadership position in the mineral-drilling core scanning space, it said. Veracio’s 2023 revenue benefitted from “growth of the TruScan and TruGyro product lines”.

“Our business grew during 2023 as mining clients continued to benefit from long-term demand for metals,” Boart CEO Jeff Olsen said.

“We accomplished this growth in the face of some regional softness in exploration spending, predominately in Canada and Australia, largely the result of a weak financing environment for junior and intermediate firms.

“Revenue for the year was driven by strong growth in Latin America and the US, as well as increased demand for sonic drilling services, rigs, and tooling.”

Olsen said American Industrial Partners’ offer for Boart represented “attractive value for shareholders”.

The company’s share price is up about 8% in 2024 to A$2.97, capitalising Boart at circa-A$880 million (US$577m).

The price has doubled since the PE offer.


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