Orbit Garant Drilling Inc (OBGRF) Q4 2024 Earnings Call Transcript Highlights: Improved ...

GuruFocus Research
6 min read

In This Article:

  • Revenue: $45.3 million for Q4, a 3% reduction compared to Q4 last year.

  • Canada Revenue: $32.8 million in Q4, a slight increase from $32.6 million in Q4 last year.

  • International Revenue: $12.5 million in Q4, down from $14.2 million in Q4 last year.

  • Gross Profit: $7.3 million for Q4, or 16.1% of revenue, compared to $0.7 million or 1.4% of revenue in Q4 last year.

  • Adjusted Gross Margin: 21.7% for Q4, excluding depreciation expense, compared to 15.9% in Q4 last year.

  • General and Administrative Expenses: $4 million or 8.9% of revenue for Q4, compared to $5.1 million or 10.9% of revenue in Q4 last year.

  • Adjusted EBITDA: $6.4 million for Q4, compared to $1.8 million in Q4 last year.

  • Net Loss: $1.2 million or $0.04 per share for Q4, compared to a net loss of $4.1 million or $0.11 per share in Q4 last year.

  • Full Year Revenue: $181.2 million for fiscal 2024, a decrease of 9.8% compared to fiscal 2023.

  • Full Year Adjusted Gross Margin: 16.7% for fiscal 2024, excluding depreciation expenses, compared to 16.2% in fiscal 2023.

  • Full Year Adjusted EBITDA: $14.4 million for fiscal 2024, a decrease of $4.7 million compared to fiscal 2023.

  • Full Year Net Loss: $1.3 million or $0.04 per share for fiscal 2024, compared to a net loss of $0.7 million or $0.02 per share last year.

  • Long-term Debt: $21.5 million at fiscal year end, compared to $22.2 million as of June 30, a year ago.

  • Working Capital: $48.9 million at fiscal year end, compared to $50.4 million at fiscal 2023 year end.

Release Date: September 20, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Improved profitability in Q4 with adjusted gross margin exceeding 20%, the highest since Q2 2021.

  • Successful exit from the unprofitable West African market, allowing focus on more stable markets in Canada and Chile.

  • Secured two large renewable and copper drilling projects in Chile with senior mining companies, including long-term contracts of three and five years.

  • Strong operating performance in Chile, attributed to focusing on large copper producers and maintaining good margins.

  • General and administrative expenses reduced to $4 million or 8.9% of revenue compared to $5.1 million or 10.9% of revenue in Q4 last year.

Negative Points

  • Revenue for fiscal 2024 decreased by 9.8% compared to fiscal 2023, primarily due to project suspensions and reductions in Canada.

  • Net loss for the quarter was $1.2 million or $0.04 per share, impacted by a $5.2 million effect of the substantial modification of receivables and expected credit loss.

  • International revenue declined to $12.5 million in Q4 compared to $14.2 million in Q4 last year, reflecting the cessation of drilling activity in West Africa.

  • Adjusted EBITDA decreased by $4.7 million compared to fiscal 2023, reflecting reduced drilling activity in Canada and costs related to retaining key personnel.

  • The decline in demand for junior exploration companies in Q4, while demand for senior and intermediate mining companies remained strong.

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