Drillcon (DRIL) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were 102 MSEK, down 6% year-over-year, with EBIT at 0.4 MSEK and net result at -1.8 MSEK, impacted by customer-driven production stops in Iberia.

• Two major raiseboring contracts secured: Sandfire MATSA (Spain, ~90 MSEK) and Somincor Neves Corvo (Portugal, ~100 MSEK, post-quarter), strengthening Iberian market position.

• Digital transformation and strategic investment in a new deep drilling rig have begun to yield results, reducing capital tie-up and enhancing production capacity.

• Dividend proposal withdrawn due to economic uncertainty and significant equipment investments, with the option to reconsider later in the year.

Financial highlights

• Q1 2025 net sales: 102 MSEK (108 MSEK Q1 2024); EBITDA: 8.2 MSEK (10.1); EBIT: 0.4 MSEK (2.9); net result: -1.8 MSEK (2.9).

• Earnings per share: -0.04 SEK (0.06); operating cash flow: 9 MSEK (-6 MSEK Q1 2024).

• Rolling 12-month sales: 415 MSEK; EBIT margin: 0.4%; ROE: 9.1%.

• Cash flow improved by 15 MSEK year-over-year, despite negative currency effects of 2.2 MSEK.

• Investments in Q1 totaled 22 MSEK, mainly in drilling rigs and production equipment.

Outlook and guidance

• Order book remains strong at ~850 MSEK, supporting long-term growth prospects.

• Short-term market uncertainty persists, with risk of customers postponing or reallocating orders, especially in Iberia.

• EU's focus on strategic minerals and increased customer demand in Scandinavia and Iberia provide growth opportunities.

• Stable short-term demand and capacity utilization expected in Nordics; Iberia faces risk of continued customer-driven production pauses into Q2.