Image source: © Jirsak | Megapixl.com

Highlights

  • In Q1 2024, Foraco posted a higher EBITDA margin of 22.7% and a net margin of 11% compared to the industry median of 21.5% and 9.1%, respectively
  • On July 18, 2024, the company is supposed to pay a dividend of CAD 0.06 per share
  • The company’s net profit and earnings per share for Q1 2024 surpassed the figures of the previous year

Foraco International SA (TSX: FAR), active in 22 countries, ranks as the world's third-largest mineral drilling firm, focusing on mining and water ventures. Its primary revenue source stems from drilling contracts with mining and water exploration entities.

Foraco ended the first quarter of 2024 on a strong note with a rebound in activity levels, smooth operations, and a complete withdrawal from Russia. Other positive factors of the quarter include a higher EBITDA margin of 22.7% compared to the industry median of 21.5% and a higher net margin of 11% compared to the industry median of 9.1%. Backed by lower net financial expenses and a 50% reduction in interest rates following a recent debt refinancing, the company achieved a substantial net profit and earnings per share that exceeded last year’s figures.

Foraco showcased a series of positive trends in its financial performance for FY 2023. Consecutively increasing revenue, gross profit, and EBITDA were notable highlights, underscoring its growth trajectory. Additionally, improved margins added further strength to its financial position and the group demonstrated decent growth in operating cash flows.

Recent business update

In March, Foraco announced its definitive exit from Russia. The company sold its stake in Eurasia Drilling Company Limited (EDC), Russia, a transaction that received consent from the Russian authorities. The company earned a marginal net profit from the deal.

Last month, the company approved a dividend of CAD 0.06 per share, which is scheduled to be distributed on July 18, 2024.

Top 10 shareholders

The top 10 shareholders of Foraco together hold ~40.80% of the total stake in the company. Entremont SARL and Financiere Berlaimont. LLC hold maximum stake in the company at around 20.72% and around 13.64%, respectively.

Stock performance

The stock price of Foraco has experienced a surge of ~1.76% and a downfall of ~7.12% over the last 1 week and 1 month respectively. Furthermore, the stock is trading higher than its average 52-week high price of CAD 3.27 and 52-week low price of CAD 1.59.

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 May 14, 2024. The reference data in this report has been partly sourced from EODHD/Others.