Mineral drilling products and contracting company Boart Longyear says blue chip miners are maintaining drilling volumes but there are some signs of softening demand among junior companies.
Boart’s drilling services arm lifted Q3 revenue 20% year-on-year to US$189m, buttressing a 12% yoy rise in total revenue for the period to $265m.
“Drilling services revenue growth was driven by strong operational performance in Latin America, the US and EMEA,” the company said.
For the first nine months of 2022 Boart increased revenue 16% yoy to $793m, with drilling services contributing $554m (plus-21% yoy) and products $239m (plus-7%).
Group EBITDA for Q3 was $17m, less than half last year’s $39m for the same period. Nine-month EBITDA was down 21% yoy at $70m.
“Adjusted EBITDA in Q3 2022 of $33m was flat over the prior year, mainly driven by drilling services’ price and volume growth,” the company said.
“Global products EBITDA was negatively impacted by increased manufacturing costs, input price inflation and higher freight rates.”
Boart CEO Jeff Olsen said: “From all indications, near-term metals demand is expected to remain healthy with limited impact from broader economic headwinds. Our major mining clients, who form most of our portfolio, continue to execute drilling programs, although demand is softening with some junior mining customers.
“Products continues to navigate a challenging operating environment with EBITDA negatively impacted by increased manufacturing costs, input cost inflation and higher freight rates.”
Boart’s net debt was $152m at the end of September this year, compared with $93m a year ago.