TORONTO, ON and
MARSEILLE, France,
March 3, 2022 /CNW/ -
Foraco International SA (TSX: FAR) (the "Company" or "Foraco"), a
leading global provider of mineral drilling services, today
released its unaudited financial results for the fourth quarter
2021. All figures are expressed in US Dollars (US$) unless
otherwise indicated.
"We are pleased to report that our revenue for the fourth
quarter 2021 was US$ 68.9 million, up
27% compared to the same quarter last year. On a yearly basis,
revenue reached US$ 269.7 million in
2021, up 30% compared to 2020 or 31% up compared to 2019's
pre-Covid levels. We value the fact that all regions contributed to
this remarkable performance. This upward trend is further confirmed
by our year-end backlog which reached an all-time high of
US$ 419.8 million with the
confirmation of major long-term contracts. At US$ 216.5 million the order book to be executed
in 2022 compares favorably with last year one at US$ 174.7 million." said Daniel Simoncini, Chairman and Co-CEO. "We
achieved this level of activity while delivering improved
profitability, and this in spite of increased labour constraints
and inflationary pressures on costs. Indeed, we managed to pass
these increased costs onto the new selling prices in the renewal
and the renegotiation of most of our long-term contracts."
in US$
million
|
FY
2021
|
FY
2020
|
FY
2019 (Pre-Covid)
|
2021 - 2019
Variance
|
Revenue
|
269.7
|
207.1
|
205.4
|
+31%
|
EBITDA
|
43.0
|
34.1
|
29.3
|
+47%
|
Net
Debt
|
85.7
|
141.6
|
133.4
|
-47.6M
|
Year-end
backlog
|
419.8
|
270.1
|
269.1
|
+150.7M
|
"2021 is definitely an important milestone in the life of Foraco
with all the indicators showing positive. It is worth noting that
we largely exceeded the pre-Covid levels of activity both in terms
of volume and profitability. The rig utilization rate was 56% on
average this quarter compared to 53% for the same quarter last
year. Our EBITDA for the quarter reached US$
9.4 million, up 20 % compared to Q4 2020 and US$ 43.0 million for the full year 2021, an
increase of 26% compared to 2020 and 47% above our 2019 pre-Covid
EBITDA." said Jean-Pierre Charmensat, Co-CEO and CFO". Along with
the improved operational and financial situation we reduced our
debt by US$ 55.9 million and reshaped
our balance sheet. Net debt at year-end 2021 was US$ 85.7 million compared to US$ 141.6 million at year-end 2020. In the
context of the increased activity, we also managed to keep control
of our working capital requirements and our Capex. With our
operating performance, our backlog, and our reinforced balance
sheet, we believe that we have the strengths to satisfy our clients
increasing demand and are well positioned to greatly enhance
shareholders' value while financing our development."
The Company is deeply concerned by the recent events occurred
between Russia and Ukraine. Although the Company does not have
any direct or indirect interest in Ukraine, the conflict may affect its activity
in the region and the Company is currently assessing its potential
economic impact. To date, continuity of operations is not affected.
As part of the Company's financial strategy, no significant cash
balances are held in subsidiaries worldwide. Foraco is following up
on any new regulatory decisions and will comply.
Income Statement
(In thousands of
US$)
(unaudited)
|
|
Three-month
period ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
68,896
|
|
54,177
|
|
|
269,689
|
|
207,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit /
(loss) (1)
|
|
|
10,112
|
|
8,963
|
|
|
46,820
|
|
38,225
|
As a percentage of
sales
|
|
|
14.7%
|
|
16.5%
|
|
|
17.4%
|
|
18.5%
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
9,420
|
|
7,846
|
|
|
43,041
|
|
34,054
|
As a percentage of
sales
|
|
|
13.7%
|
|
14.5%
|
|
|
16.0%
|
|
16.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit /
(loss)
|
|
|
4,287
|
|
3,377
|
|
|
24,127
|
|
17,185
|
As a percentage of
sales
|
|
|
6.2%
|
|
6.2%
|
|
|
8.9%
|
|
8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) for
the period
|
|
|
2,226
|
|
2,060
|
|
|
39,010
|
|
7,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
2,269
|
|
1,604
|
|
|
35,487
|
|
4,236
|
Non-controlling
interests
|
|
|
(43)
|
|
456
|
|
|
3,523
|
|
3,283
|
|
|
|
|
|
|
|
|
|
|
|
EPS (in US
cents)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2.26
|
|
1.79
|
|
|
37.65
|
|
4.72
|
Diluted
|
|
|
2.20
|
|
1.74
|
|
|
36.71
|
|
4.61
|
(1)
This line item includes amortization and depreciation expenses
related to operations
|
Year-end backlog
- Order backlog of US$ 419.8
million at 2021 year-end vs US$ 270.1
million at 2020 year-end (+55%),
- Order backlog to be executed during calendar year 2022 of
US$ 216.5 million vs US$ 174.7 million last year (+24%).
Highlights – Q4 2021
Revenue
- Revenue for Q4 2021 amounted to US$ 68.9
million compared to US$ 54.7
million in Q4 2020, an increase of 27%.
- Rig utilization rate was 56% in Q4 2021 compared to 53% in Q4
2020.
Profitability
- Q4 2021 gross margin including depreciation within cost of
sales was US$ 10.1 million (or 14.7%
of revenue) compared to US$ 9.0
million (or 16.5% of revenue) in Q4 2020.
- Ongoing contracts reported solid performances despite the
impact of some 2021 cost increases due to inflationary pressure.
During the period, increased costs were passed on to the new
selling prices upon the renewal and the renegotiation of
contracts.
- During the quarter, EBITDA amounted to US$ 9.4 million (or 13.7% of revenue), compared
to US$ 7.8 million (or 14.5% of
revenue) for the same quarter last year.
Highlights – FY 2021
Revenue
- FY 2021 revenue was US$ 269.7
million compared to US$ 207.1
million in FY 2020, representing an increase of 30%.
Profitability
- FY 2021 gross margin including depreciation within cost of
sales was US$ 46.8 million (or 17.4%
of revenue) compared to US$ 38.2
million (or 18.5% of revenue) in FY 2020.
- During the period, EBITDA amounted to US$ 43.0 million (or 15.9% of revenue), compared
to US$ 34.0 million (or 16.4% of
revenue) for the same period in the previous year.
Financial results
Revenue
(In thousands of US$)
- (unaudited)
|
Q4
2021
|
%
change
|
Q4
2020
|
FY
2021
|
%
change
|
FY
2020
|
Reporting
segment
|
|
|
|
|
|
|
Mining............................................................
|
60,724
|
35%
|
45,007
|
232,356
|
37%
|
169,305
|
Water.............................................................
|
8,172
|
-11%
|
9,170
|
37,333
|
-1%
|
37,817
|
Total
revenue................................................
|
68,896
|
27%
|
54,177
|
269,689
|
30%
|
207,122
|
|
|
|
|
|
|
|
Geographic
region
|
|
|
|
|
|
|
North
America.................................................
|
22,772
|
32%
|
17,294
|
92,261
|
37%
|
67,563
|
Europe, Middle East and
Africa...........................
|
18,889
|
4%
|
18,228
|
81,875
|
20%
|
68,209
|
South
America.................................................
|
16,341
|
80%
|
9,099
|
52,797
|
59%
|
33,130
|
Asia
Pacific......................................................
|
10,894
|
14%
|
9,556
|
42,756
|
12%
|
38,220
|
Total
revenue................................................
|
68,896
|
27%
|
54,177
|
269,689
|
30%
|
207,122
|
Q4 2021
Revenue of the quarter increased from US$
54.2 million in Q4 2020 to US$ 68.9
million in Q4 2021 (27%).
The increase in revenue in the Mining segment is the result of
the favorable market dynamics and the capacity of the Company to
deliver. The water activity decreased by 11% mainly due to the
phasing of contracts compared to last year which is not indicative
of a business trend.
Activity in North America
increased 32% with revenue at US$ 22.8
million in Q4 2021 compared to US$
17.3 million in Q4 2020. This increase is mainly linked to
new long-term rolling contracts.
In EMEA, revenue for the quarter was US$
18.9 million compared to US$ 18.2
million in Q4 2020, an increase of 4%. In Africa, activity decreased by 15% compared to
Q4 2020 mainly due to the phasing of contracts. In Russia, activity increased by 22% thanks to
new significant contracts secured during Q1 2021.
Revenue in South America
increased by 80% to US$ 16.3 million
in Q4 2021 (US$ 9.1 million in Q4
2020). The activity in the region continued to be impacted in Q4
2021 by the effect of the pandemic which disrupted the operational
activities.
In Asia Pacific, Q4 2021
revenue amounted to US$ 10.9 million,
an increase of 14% reflecting quarter over quarter the ongoing
improvement of the activity.
FY 2021
FY 2021 revenue was US$ 269.7
million compared to US$ 207.1
million in FY 2020, an increase of 30%. The increase in
revenue is the result of a combination of a steady stream of demand
and the capacity of the Company to deliver.
Revenue in North America
increased by 37% to US$ 92.3 million
in FY 2021 from US$ 67.6 million in
FY 2020, a growth driven by new long-term contracts.
In EMEA, revenue increased by 20%, to US$
81.9 million in FY 2021 from US$ 68.2
million in FY 2020. Both Russia and Africa areas showed sustained activity.
Revenue in South America
increased by 59% at US$ 52.8 million
in FY 2021 (US$ 33.1 million in FY
2020). The activity in the region was particularly impacted by the
effect of the Covid-19 pandemic during 2020.
In Asia Pacific, FY 2021
revenue amounted to US$ 42.8 million,
an increase of 12%.
Gross profit
(In thousands of US$)
- (unaudited)
|
Q4 2021
|
%
change
|
Q4
2020
|
FY
2021
|
%
change
|
FY
2020
|
Reporting
segment
|
|
|
|
|
|
|
Mining............................................................
|
8,645
|
17%
|
7,406
|
39,342
|
34%
|
29,347
|
Water.............................................................
|
1,467
|
-6%
|
1,557
|
7,478
|
-16%
|
8,878
|
Total gross
profit / (loss) ...............................
|
10,112
|
13%
|
8,963
|
46,820
|
22%
|
38,225
|
Q4 2021
The Q4 2021 gross margin including depreciation within cost of
sales was US$ 10.1 million (or 14.7%
of revenue) compared to US$ 9.0
million (or 16.5% of revenue) in Q4 2020. Ongoing contracts
reported solid performances while some costs increased were not yet
compensated in our selling prices. All regions operated in a tight
labor market generating inflation on costs and impacting project
gross margins. During the period, increased costs were passed onto
the new selling prices in the renewal and the renegotiation of
contracts.
FY 2021
The FY 2021 gross margin including depreciation within cost of
sales was US$ 46.8 million compared
to US$ 38.2 million in FY 2020.
Ongoing contracts reported solid performances while some new
contracts in their mobilization phase generated a lower percentage
of gross margin. All regions face ongoing inflationary pressures on
operating costs. There is generally a time lag before these cost
increases can be passed on through selling prices. Increased costs
were passed on to the new selling prices in the renewal and the
renegotiation of contracts which were carried out at year end.
Selling, General and Administrative Expenses
(In thousands of US$) -
(unaudited)
|
Q4
2021
|
%
change
|
Q4
2020
|
FY
2021
|
%
change
|
FY
2020
|
Selling, general and
administrative
expenses
|
5,825
|
4%
|
5,586
|
22,693
|
8%
|
21,040
|
Q4 2021
SG&A increased compared to the same quarter last year mainly
due to the level of activity. As a percentage of revenue, SG&A
decreased from 10.3% in Q4 2020 to 8.3% in Q4 2021.
FY 2021
SG&A increased by 8% compared to the same period last year.
As a percentage of revenue, SG&A decreased from 10.2% to 8.4%
of revenue.
Operating result
(In thousands of US$)
- (unaudited)
|
Q4
2021
|
%
change
|
Q4
2020
|
FY
2021
|
%
change
|
FY
2020
|
Reporting
segment
|
|
|
|
|
|
|
Mining
.....................................................................
|
3,552
|
28%
|
2,765
|
19,851
|
64%
|
12,122
|
Water......................................................................
|
735
|
20%
|
612
|
4,276
|
-16%
|
5,063
|
Total operating
profit / (loss)
........................................
|
4,287
|
27%
|
3,377
|
24,127
|
40%
|
17,185
|
Q4 2021
The operating profit was US$ 4.3
million, resulting in a US$ 1.0
million increase thanks to the increased activity and the
continued control over the operations and SG&A expenses.
FY 2021
The operating profit was US$ 24.1
million in FY 2021, a US$ 6.9
million improvement compared to FY 2020 as a result of the
increase in activity and the continued control over the operations
and SG&A expenses.
Financial position
The following table provides a summary of the Company's cash
flows for FY 2021 and FY 2020:
(In thousands of
US$)
|
FY
2021
|
FY
2020
|
|
|
|
Cash generated by
operations before working capital requirements
|
43,041
|
34,054
|
|
|
|
Working capital
requirements
|
(4,048)
|
3,349
|
Income tax
paid
|
(6,764)
|
(3,982)
|
Purchase of equipment
in cash
|
(18,586)
|
(13,320)
|
|
|
|
Free Cash Flow
before debt servicing
|
13,643
|
20,100
|
|
|
|
Proceeds from issuance
of bonds, net of issuance costs
|
95,564
|
-
|
Repayments of Bonds
including costs paid
|
(96,125)
|
-
|
Repayments of
borrowings and others
|
(4,906)
|
(9,239)
|
Interests
paid
|
(3,210)
|
(2,904)
|
Acquisition of treasury
shares
|
(552)
|
(163)
|
Dividends paid to
non-controlling interests
|
(1,778)
|
(2,536)
|
|
|
|
Net cash generated /
(used in) financing activities
|
(11,007)
|
(14,842)
|
|
|
|
Net cash
variation
|
2,636
|
4,576
|
|
|
|
Foreign exchange
differences
|
328
|
(354)
|
|
|
|
Variation in cash
and cash equivalents
|
2,963
|
4,907
|
|
|
|
Cash and cash
equivalents at the end of the period
|
23,924
|
20,960
|
|
|
|
In FY 2021, the cash generated from operations before working
capital requirements amounted to US$ 43.0
million compared to US$ 34.0
million in FY 2020.
In FY 2021, the working capital requirement was US$4.0 million compared to a US$ 3.3 million decrease in the same period last
year. This is mainly linked to the improved activity requiring
higher inventories and resulting in higher receivables at year end
which is only partially offset by the increased amounts payable to
suppliers.
During the period, Capex totaled US$ 18.6
million in cash compared to US$ 13.3
million in FY 2020. The higher 2021 Capex is also driven by
the increased activity. Capex essentially relates to the
acquisition of rigs, major rig overhauls, ancillary equipment and
rods.
On July 7, 2021, the Company
finalized its financial reorganization related to the early
redemption of its euro-denominated bonds amounting to US$ 145.9 million thousand as at June 30, 2021 through a cash payment of
US$ 96.1 million. To finance the
reorganization, the Company raised US$ 95.6
million net of OID and related transaction fees. The new
bonds will mature in December
2025.
As at December 31, 2021, the
maturity of financial debt can be analyzed as presented in the
table below:
|
December
31, 2021
|
|
|
Credit lines
|
1,382
|
Long-term
debt
|
|
Within one
year
|
7,584
|
Between 1 and 2
years
|
10,183
|
Between 2 and 3
years
|
9,858
|
Between 3 and 4
years
|
74,061
|
Between 4 and 5
years
|
|
Total
|
103,067
|
|
|
As at December 31, 2021, cash and
cash equivalents totaled US$ 23.9
million compared to US$ 21.0
million as at December 31,
2020. Cash and cash equivalents are mainly held at or
invested within top tier financial institutions.
As at December 31, 2021, the net
debt including operational lease obligations (IFRS 16) amounted to
US$ 85.7 million (US$ 141.7 million as at December 31, 2020).
Bank guarantees as at December 31,
2021 totaled US$ 9.0 million
compared to US$ 8.1 million as at
December 31, 2020. The Company
benefits from a confirmed contract guarantee line of € 6.5 million
(US$ 7.4 million).
Strategy
The Company's strategy is to assist its customers in exploring
or managing their deposits throughout the entire cycle, with a
special focus on the life of mines extension activity. The Company
intends to continue developing and growing its services across the
world with a focus on stable jurisdictions, high tech drilling
services, optimal commodities mix - with a significant presence in
water related drilling services - and a gradual implementation of
advanced digital applications. The Company expects it will execute
its strategy primarily through organic growth and targeted
acquisitions.
The Company anticipated the increased environmental, social and
governance (ESG) requirements, and is implementing a pragmatic and
measurable approach to ESG with quantitative KPIs to maximize
improvement and efficiencies.
Covid 19
Key profitability indicators continue to improve period over
period despite the continuing uncertainties linked to the Covid-19
pandemic. The market for commodities is supported by the global
economic recovery and the increased demand for energy transition
and water management. In 2021, the Company largely exceeded 2019
pre-Covid activity levels.
Currency exchange rates
The exchange rates for the periods under review are provided in
the Management's Discussion and Analysis of Q4 2021.
Non-IFRS measures
EBITDA represents Net income before interest expense, income
taxes, depreciation, amortization and non-cash share based
compensation expenses. EBITDA is a non-IFRS quantitative measure
used to assist in the assessment of the Company's ability to
generate cash from its operations. The Company believes that the
presentation of EBITDA is useful to investors because it is
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in the drilling
industry. EBITDA is not defined in IFRS and should not be
considered to be an alternative to Profit for the period or
Operating profit or any other financial metric required by such
accounting principles.
Net debt corresponds to the current and non-current portions of
borrowings and the consideration payable related to acquisitions,
net of cash and cash equivalents.
Reconciliation of the EBITDA is as follows:
(In thousands of
US$)
(unaudited)
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
|
|
|
|
|
Operating profit /
(loss)....................................................
|
4,287
|
3,377
|
24,127
|
17,185
|
Depreciation expense
.....................................................
|
5,050
|
4,409
|
18,681
|
16,673
|
Non-cash employee
share-based compensation...................
|
83
|
60
|
233
|
195
|
EBITDA
.........................................................................
|
9,420
|
7,846
|
43,041
|
34,054
|
Conference call and webcast
On March 3, 2022, Company
Management will conduct a conference call at 10:00 am ET to review the financial results. The
call will be hosted by Daniel
Simoncini, Chairman and co-CEO, and Jean-Pierre Charmensat,
co-CEO and CFO.
You can join the call by dialing 1-888-664-6392 or
1-416-764-8659. You will be put on hold until the conference
call begins. A live audio webcast of the Conference Call will also
be available
https://produceredition.webcasts.com/starthere.jsp?ei=1532351&tp_key=0daf1cfdae
An archived replay of the webcast will be available for 90
days.
About Foraco International SA
Foraco International SA (TSX: FAR) is a leading global mineral
drilling services company that provides a comprehensive and
reliable service offering in mining and water projects. Supported
by its founding values of integrity, innovation and involvement,
Foraco has grown into the third largest global drilling enterprise
with a presence in 22 countries across five continents. For more
information about Foraco, visit www.foraco.com.
"Neither TSX Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Exchange) accepts
responsibility for the adequacy or accuracy of this release."
Caution concerning forward-looking statements
This document may contain "forward-looking statements" and
"forward-looking information" within the meaning of applicable
securities laws. These statements and information include
estimates, forecasts, information and statements as to Management's
expectations with respect to, among other things, the future
financial or operating performance of the Company and capital and
operating expenditures. Often, but not always, forward-looking
statements and information can be identified by the use of words
such as "may", "will", "should", "plans", "expects", "intends",
"anticipates", "believes", "budget", and "scheduled" or the
negative thereof or variations thereon or similar terminology.
Forward-looking statements and information are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by Management, are inherently subject to significant
business, economic and competitive uncertainties and contingencies.
Readers are cautioned that any such forward-looking statements and
information are not guarantees and there can be no assurance that
such statements and information will prove to be accurate and
actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
are disclosed under the heading "Risk Factors" in the Company's
Annual Information Form dated March 30,
2021, which is filed with Canadian regulators on SEDAR
(www.sedar.com). The Company expressly disclaims any intention or
obligation to update or revise any forward-looking statements and
information whether as a result of new information, future events
or otherwise. All written and oral forward-looking statements and
information attributable to Foraco or persons acting on our behalf
are expressly qualified in their entirety by the foregoing
cautionary statements.
SOURCE Foraco International SA