Orbit Garant Drilling (OGD) Q4 2024 earnings summary

Executive summary

• Q4 profitability improved year-over-year, with adjusted gross margin exceeding 20% for the first time since Q2 2021, driven by the exit from West Africa and steady demand from senior and intermediate mining customers in Canada and Chile.

• Revenue declined year-over-year, mainly due to the exit from West Africa and low junior exploration activity in Canada.

• Q4 last year was negatively impacted by forest fires in Canada and a one-time restructuring charge from exiting Burkina Faso.

• Strategic exit from West Africa completed, allowing concentration on more profitable markets and resulting in a $7.5M receivable and a $5.2M non-cash loss.

• Focus has shifted to stable, long-term contracts with senior and intermediate mining companies in Canada and Chile.

Financial highlights

• Q4 2024 revenue was CAD 45.3 million, down 3% year-over-year; Canada revenue slightly increased, while international revenue declined due to West Africa exit.

• Q4 gross profit was CAD 7.3 million (16.1% margin), up from CAD 0.7 million (1.4%) last year; adjusted gross margin reached 21.7% in Q4, up from 15.9%.

• Fiscal 2024 revenue was CAD 181.2 million, down 9.8% from 2023; adjusted EBITDA was CAD 14.4 million, down from CAD 19.1 million.

• Fiscal 2024 net loss was CAD 1.3 million, or CAD 0.04 per share, compared to a net loss of CAD 0.7 million, or CAD 0.02 per share, last year.

• Q4 adjusted EBITDA was CAD 6.4 million, up from CAD 1.8 million year-over-year.

Outlook and guidance

• Margins expected to remain stable at current levels, with potential upside if junior mining activity resumes.

• Long-term contracts in Chile and Canada provide revenue and margin stability, with senior and well-financed intermediate mining companies making up 87% of fiscal 2024 revenue.

• Record-high gold and strong copper prices are incentivizing mine development spending.

• Financing conditions remain challenging for junior and some intermediate mining companies in Canada.