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

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q4 Revenue

C$57.20 mln

Q4 Net Loss

C$1.90 mln

Q4 Adjusted Gross Margin

13.60%

Q4 EBITDA

C$2.20 mln

Q4 Gross Profit

C$4.60 mln


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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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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