Foraco drilling in Russia. Credit: Foraco
Despite the logistical and other challenges of the COVID-19 pandemic, international drilling contractor Foraco reported a healthy third quarter, with revenues of US$55.9 million – down only 3% from the comparable period in 2019.
“After a volatile period in Q2 due to the COVID-19 pandemic impact which slowed down our activity in a number of countries, most clients decided to progressively resume their programs during Q3 2020 and we forthwith remobilized our resources,” said Daniel Simoncini, chair and co-CEO of Foraco, in a release.
Adjusting for currency fluctuations, revenues for the quarter were actually up 4%.
While business has remained depressed in some regions, the company reported significant growth in others.
Year to date, revenues from South America have plummeted by 34%, with revenues from North America down 7%. Meanwhile, the company has seen growth of 27% in Europe, the Middle East and Africa and 6% in Asia Pacific this year.
The biggest growth has been in the company’s water services – Foraco reported a 134% jump in revenues to US$12.1 million for the quarter, compared to US$5.2 million in the same period of last year. The boost was fed by growth in mine dewatering services and in new deep-water well contracts in Africa.
The company’s larger mining segment brought in US$43.8 million in revenue, down 17% from last year’s third quarter.
Although overall revenues were flat, Foraco showed improvements in indicators of profitability, with EBITDA rising 13% to US$11.6 million for the quarter (representing 20.7% of revenue), and free cash flow increasing to US$7.4 million from US$1.9 million. Gross margin, including depreciation within the cost of sales, was US$12.8 million (23% of revenue), up from US$10.5 million (18.1% of revenue) in the comparable period of 2019.
“The more recent published financial information for the last periods confirm that Foraco continues to outperform the market both in terms of growth and profitability,” said Jean-Pierre Charmensat co-CEO and CFO. “We generated a free cash flow before debt service of US$15.6 million but the net debt remains substantially unchanged at US$130.5 million penalized by the impact of foreign exchange rates fluctuations and the cost of financing. Our focus for the next quarters is to continue to generate free cash flow and to deleverage the company’s balance sheet.”
The company reported a rigs utilization rate of 49% for the quarter, down from 53% in the same period of last year, but up from 47% in the second quarter.
For more information visit www.foraco.com.