Foraco International (FAR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $78 million, down 18% from Q3 2023, with EBITDA at $16.1 million (20.8% margin) and net profit of $7.7 million; North America and Asia-Pacific achieved record revenues, up 11% and 27% year-over-year, respectively, while South America and EMEA saw significant declines.

• The business is now 91% focused on long-term contracts with tier one customers in prime mining jurisdictions.

• Strategic exit from Russia and reduced demand from junior mining clients impacted results, but tier-one client activity drove a 2% underlying revenue increase.

• The water business remained stable, contributing 14% of revenue, supported by the successful deployment of the NGBF rotary rig in Australia.

Financial highlights

• Q3 2024 revenue: $78 million (down from $95 million in Q3 2023); YTD Q3 2024 revenue: $233 million (down 18% year-over-year).

• Q3 2024 gross profit: $17 million (22% margin); EBITDA: $16.1 million (20.8% margin); operating profit: $12 million; net profit: $7.7 million.

• YTD Q3 2024 EBITDA: $50 million (21.5% margin); operating profit: $36.4 million; net profit: $24 million.

• SG&A expenses decreased 20% to $5.4 million, maintaining a 7% ratio to revenue.

• Free cash flow for YTD Q3 2024 was $(2.7) million, mainly due to increased working capital for North America and Asia-Pacific growth.

Outlook and guidance

• Management remains confident in the business outlook, citing strong fundamentals for critical and transition metals, but notes that a resurgence in exploration may require patience.

• No formal guidance provided, but long-term contracts, innovation, and new opportunities are expected to support future growth.

• Strategy centers on organic growth, targeted acquisitions, and expansion in stable jurisdictions and high-tech drilling services.