Major Drilling Group International (MDI) Q2 2025 earnings summary

Executive summary

• Achieved slightly better-than-expected Q2 results, maintaining revenue run rate despite challenging North American markets, with revenue for Q2 2025 at $189.3 million, down 8.6% year-over-year but stable sequentially.

• Strong performance in Chile and Australia offset lower North American activity due to reduced junior exploration spending, with Australasian and Chilean operations recognized for safety.

• Completed acquisition of Explomin, a major South American drilling contractor, for US$63 million, expanding presence and strengthening revenue stability.

• Diversified, high-quality customer base, with 88% of revenue from senior and intermediate mining companies.

• Canadian team recognized for safety, achieving over 1.1 million hours without a lost-time injury and receiving the Safe Day Every Day Gold Award.

Financial highlights

• Q2 2025 revenue was $189.3 million, down from $207.0 million in Q2 2024, with adjusted gross margin at 30.5% versus 31.0% year-over-year.

• EBITDA was $38.7 million, down from $43.6 million year-over-year, and net earnings were $18.2 million ($0.22/share), compared to $23.7 million ($0.29/share) last year.

• Net cash increased by $23.5 million, ending Q2 at $100.4 million, with no long-term debt.

• General and administrative costs rose to $18.4 million, mainly due to inflationary wage adjustments.

• Capital expenditures were $20.1 million, adding five new drill rigs and support equipment.

Outlook and guidance

• Q3 expected to be seasonally slower, with earlier holiday pauses in North America, partially offset by strength in Australia and Chile.

• Explomin acquisition to add revenue, with similar seasonality as other South American operations.

• Long-term optimism driven by higher gold prices, increased M&A, and financing activity, with copper demand projected to rise 70% by 2050.

• Demand from senior mining customers for 2025 expected to remain robust; optimism for junior activity as financing improves.

• Expectation of continued demand for specialized drilling as new deposits are found in more challenging locations.