Foraco International (FAR) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $55 million, down from $77 million in Q1 2024, mainly due to project delays, strategic exits, and negative FX impacts.

• Q1 is typically the weakest quarter due to mining sector seasonality; management expects improvement as operations ramp up.

• Asia Pacific and Water divisions delivered strong growth, with Asia Pacific revenue up 39% and Water up 40% year-over-year.

• Profitability declined as EBITDA fell to $7.0M (12.8% margin) and net profit to $1.0M (2% margin), impacted by lower volumes and ramp-up of new contracts.

Financial highlights

• Revenue declined by $22 million year-over-year, with mining segment revenue down 37% and water segment up 40%.

• Gross profit dropped to $7.7M (14.1% margin) from $16.8M (21.8% margin) in Q1 2024.

• EBITDA was $7.0M (12.8% margin), down from $17.6M (22.8% margin) in Q1 2024.

• Net profit was $1.0M (2% margin), compared to $8.5M (11% margin) in Q1 2024.

• Net debt stood at $69.5M as of March 31, 2025, improved from $85.0M a year earlier.

Outlook and guidance

• Management expects Q1 2025 not to be indicative of the full year, citing strong Asia Pacific and Water performance as validation of its strategy.

• Operations in South America are ramping up and expected to improve performance in the coming months.

• The water business is strong, with further growth anticipated from the deployment of new rigs.

• Focus remains on stable jurisdictions, top-tier clients, and expanding proprietary rig deployment.