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Highlights

  • Foraco’s Q2 2024 saw net revenue drop to USD 77.8 million, affected by weaker EMEA and South America performance.
  • Operating profit decreased to USD 12.1 million, impacting profit before taxes and net earnings.
  • Since 2021, the company has reported rising revenue, gross profit, EBITDA, and operating cash flows.

Foraco International SA (TSX: FAR) offers mineral and water drilling services and hydraulic drilling. It has a market capitalization of CAD 238.20mn.

In Q2 2024, the company experienced a decline in net revenue to USD 77.8 million from USD 100.0 million in the previous corresponding period. This reduction was primarily driven by weaker performance in the EMEA region and South America, which significantly impacted overall sales. The company also reported a decrease in operating profit to USD 12.1 million compared to USD 18.8 million in the prior year. Although lower Selling, General, and Administrative (SG&A) expenses partially cushioned the impact, the operating profit reduction was a key factor in the overall financial downturn.

As a result of the reduced operating profit, profit before taxes also declined to USD 10.2 million, down from USD 15.3 million in the previous year. This downward trend culminated in a lower net earnings figure, which fell to USD 7.8 million compared to USD 11.0 million in the prior corresponding period.

Since 2021, the company has consistently reported increasing revenue, gross profit, and EBITDA, marking a significant positive trend. Additionally, it has shown improvement in profit margins. The group has also experienced robust growth in operating cash flows, highlighting its strength and adaptability.

Recent Business Update

The company recently reported decent achievements in its two primary markets. North America saw a 3% increase, bringing its revenue to USD 32.1 million, while the Asia-Pacific region, specifically Australia, experienced a substantial 38% growth, reaching USD 22.2 million.

Top 10 Shareholders

The top 10 shareholders of Foraco collectively hold approximately 39.20% of the company's total shareholding. Among them, Entremont SARL and Financiere Berlaimont LLC hold the largest stakes, with Entremont SARL owning around 20.72% and Financiere Berlaimont LLC holding approximately 13.64%.

Stock performance

Foraco's stock has declined by approximately 11.23% over the past month and about 19.93% over the last three months. Currently, it is trading below both the 52-week high of CAD 3.25 and the 52-week low of CAD 1.56.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 16, 2024. The reference data in this report has been partly sourced from EODHD/Others.