Foraco’s Simoncini maintains faith in market

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Foraco's view of drilling market remains positive
‘We do believe the market will eventually realise we are undervalued and put the stock back where it should be’

Foraco CEO Daniel Simoncini believes the French drilling contractor is knocking on the door of better market treatment in Canada after the company posted strong fourth-quarter and full-year financials and promised more of the same in 2023.

One of the world’s biggest mineral and water drilling contractors, with circa-300 rigs and 2800 employees, Foraco’s Toronto share price has been tracking back up to the plus-C$2 levels achieved a year ago, before it sank as low as 92c in October. The price is up more than 23% year-to-date to $1.91, capitalising the company at nearly C$190 million (but still down about 11% in the past 12 months).

Simoncini told analysts after Foraco booked a 55% year-on-year EBITDA rise to US$66.5 million on 23% higher 2022 revenue of $330.6m he felt C$200m was the “magic number” for Toronto Stock Exchange-listed mining services companies vis-à-vis market capitalisation, and “we are not far from this threshold”.

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