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Orbit Garant Drilling Q4 revenue $22.8 million, up 12.4%

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Staff writer ▼ | September 24, 2015
Orbit Garant Drilling announced its financial results for the fourth quarter ended June 30, 2015. Revenue totalled $22.8 million, an increase of 12.4% from $20.2 million for Q4 2014.
Orbit Garant Drilling
Orbit Garant Drilling   Drilling Canada revenue increased 7.8% to $21.6 million
Drilling Canada revenue increased 7.8% to $21.6 million, up from $20 million in Q4 FY2014, reflecting increased metres drilled and the sale of two drill rigs during the quarter. Drilling International revenue increased to $1.2 million in Q4 FY2015, up from $0.2 million in Q4 FY2014.

The $1 million increase is attributable to the Company’s new drilling contract in Chile, which commenced during the second quarter of Fiscal 2015.

Orbit Garant’s fleet drilled a total of 252,815 metres in Q4 FY2015, an increase of 7.9% from 234,287 metres drilled in Q4 FY2014. Average revenue per metre drilled was $87.59 compared to $85.33 in Q4 FY2014. Average revenue per metre drilled remains at the lower end of the Company’s trailing three-year range, primarily due to current conditions in the mineral industry, which has resulted in pricing pressure from customers.

Gross profit for Q4 FY2015 decreased to $1.6 million from $1.8 million in Q4 FY2014. Gross margin for Q4 FY2015 was 7.1% compared with 8.4% in Q4 FY2014. In accordance with IFRS, depreciation expenses totalling $2.1 million are included in cost of contract revenue for Q4 FY2015, compared to $2.4 million in Q4 FY2014.

Adjusted gross margin, excluding depreciation expenses, was 16.4% in Q4 FY2015 compared to 20.5% in Q4 FY2014. The decline in gross profit, gross margin and adjusted gross margin is primarily attributable to the Company incurring additional project related costs, new operating subsidiaries in Chile and Ghana, the temporary suspension of operations at the Company’s Chilean project site due to local area flooding caused by heavy rains, and start-up costs related to a new international drilling project in Kazakhstan.

General and administrative (G&A) expenses totalled $3.7 million, or 16.0% of revenue, in Q4 FY2015, compared to $2.4 million, or 11.7% of revenue, in Q4 FY2014. A one-time gain of $1 million, associated with the reversals of portions of contingent earn-out considerations related to the Company’s acquisitions of Advantage Control Technologies (1085820 Ontario Limited) and Lantech Drilling Services Inc., reduced G&A expenses in Q4 FY2014.

In accordance with IFRS, depreciation and amortization expenses of $0.4 million are included in G&A expenses for Q4 FY2015, compared to $0.3 million in Q4 FY2014. Adjusted G&A expenses, excluding the reversal of contingent earn-out considerations noted above, and depreciation and amortization expenses, were $3.2 million, or 14.2% of revenue, in Q4 FY2015, compared to $3.1 million, or 15.2% of revenue, in Q4 FY2014.

Additional G&A expenses have been incurred to support the Company’s new operating subsidiaries in Chile and West Africa, which were both opened during the first quarter of Fiscal 2015.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”)1 was $0.3 million in Q4 FY2015, compared to $1.9 million in the fourth quarter a year ago.

The Company’s net loss for Q4 FY2015 was $2 million, or $0.06 per common share, compared to a net loss of $0.8 million, or $0.02 per share, in Q4 FY2014. The increased net loss was primarily attributable to lower gross margins in Q4 FY2015 and the one-time gain of $1 million associated with the reversal of portions of contingent earn-out considerations in Q4 FY2014, as discussed above.

All dollar amounts are in Canadian currency unless otherwise stated.


 

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