Orbit Garant Drilling (OGD) Q2 2025 earnings summary

Executive summary

• Profitability improved significantly year-over-year, with strong growth in adjusted gross margin, adjusted EBITDA, and net earnings, driven by better operating performance in both Canadian and international segments.

• Achieved adjusted gross margin exceeding 20% for the first half of fiscal 2025.

• Increased drilling activity in Canada and South America, and the cessation of unprofitable West Africa operations, contributed to improved results.

• Four consecutive quarters of higher profitability compared to the prior year, reflecting successful execution of a five-point strategic plan.

• Gold prices at record highs supported robust demand, with nearly two-thirds of revenue from gold-related operations.

Financial highlights

• Revenue for the quarter was $43.5 million, up 0.2% year-over-year; Canada revenue rose 4.0% to $30.8 million, while international revenue declined to $12.7 million.

• Gross profit rose to $7.2 million (16.5% of revenue) from $3.0 million (6.8%) in Q2 last year; adjusted gross margin reached 21.5% versus 12.5%.

• Adjusted EBITDA increased to $5.6 million from $1.0 million year-over-year.

• Net earnings were $1.5 million ($0.04 per share) compared to a net loss of $1.7 million ($0.05 per share) last year.

• Working capital at quarter end was $49.2 million, up from $48.6 million at fiscal 2024 year-end.

Outlook and guidance

• Strong gold and copper prices are expected to support robust demand from senior and intermediate mining customers throughout 2025.

• Revenue is expected to remain stable in Chile, with a slight increase possible due to renewed contracts and new drill rigs.

• No formal guidance provided, but management aims to maintain adjusted gross margin above 20% for the first six months of fiscal 2025.

• Demand from junior mining companies remains restricted due to challenging financing conditions, but capacity exists to serve them as demand recovers.

• Positioned for continued strong operating performance, supported by high gold and metals prices and solid demand from well-financed mining customers.