French drilling contractor Foraco International says better pricing and productivity helped it lift September-quarter margins, resulting in a 67% year-on-year increase in Q3 EBITDA to US$23 million on 30% higher revenue of $91.4m in the period.
CFO Jean-Pierre Charmensat said Q3 trailing 12-month EBITDA was $58.8m, “a new record high over the last decade”.
Revenue for the first nine months of 2022 totalled $245.7m compared with $200.8m at the same time last year. Year-to-date EBITDA was $49.4m (20.1% of revenue) compared with $33.6m (16.7% of revenue) for the same period last year.
Foraco had net debt of $86.9m at the end of September, compared with $85.7m at the end of 2021, representing 1.5-times the trailing 12-month EBITDA number.
“The global demand for electrification continues to fuel a growing market dynamic for copper and battery metals,” co-CEO Daniel Simoncini said.
“Major customers representing 85% of our activity continue to grow their reserves while juniors start to be affected by the tightening access to financing.
“Our revenue increase mainly comes from the utilisation of larger rigs, the mix in our geographical revenue and price adjustments. This explains why our utilisation rate remained substantially unchanged year-on-year at 57%. In addition, we continued to record increased demand for our complex water drilling services.”
Q3 activity in North America increased by 11% with revenue at $27.9m versus $25.1m in Q3 last year despite “continuing crewing issues”. EMEA revenue of $19m was down 4% yoy “mainly due to a Euro-to-USD adverse foreign exchange variance”; South America was up 109% yoy to $29.4m; and Asia Pacific was 30% higher yoy at $15.2m.
TSX-listed Foraco’s share price (FAR) is down about 14% in the past month, capitalising the company at about C$117 million.