Canada's Orbit Garant Q4 revenue rises on increased drilling activity

Overview

• Canada mineral drilling firm's fiscal Q4 revenue grew 21% yr/yr to record level

• Profitability declined due to higher costs, increased trainee drillers, inflation, and credit loss

• Company secured major new drilling contract in northern Canada, increasing capital expenditures and debt

Outlook

• Company expects improved profitability in fiscal 2027 due to better pricing and project advancement

• Orbit Garant says pricing adjustments on contracts should benefit profitability in fiscal 2027

• Company expects to prioritize debt reduction after new Canadian project reaches full capacity

Result Drivers

• HIGH UTILIZATION & DEMAND - Record revenue driven by strong demand and highest drill rig utilization rate since fiscal 2012, per CEO Daniel Maheu

• PRODUCTIVITY & COST PRESSURES - Profitability declined due to increased trainee drillers, inflation in input costs and wages, and lower revenue per metre on legacy contracts

Company press release:

Key Details

Analyst Coverage

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 7 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)