Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Operating earnings increased in both Canadian and international operations compared to Q1 last year.
- Total revenue for the quarter was $48.4 million, marking a 9.3% increase compared to Q1 last year.
- Net earnings were $3.2 million or 8 cents per share, a significant improvement from a net loss of $24 million or 1 cent per share in Q1 last year.
- Gross profit increased to $7.4 million for the quarter, representing 15.2% of revenue compared to 9.4% in Q1 last year.
- The cessation of operations in West Africa, which were largely unprofitable, has positively impacted financial performance.
Negative Points
- Junior mining companies continue to face difficult financing conditions, limiting their exploration spending.
- The company's performance is not fully reflected in its share price, prompting a share buyback program.
- Seasonality affects operations, with Q2 and Q3 being more challenging in Canada due to winter and holiday seasons.
- The Canadian market is highly competitive, with significant pressure on pricing for non-specialized projects.
- International operations, while profitable, only account for 25% of total revenue, indicating a reliance on Canadian operations.
Q & A Highlights
Q: What was the adjusted EBITDA and adjusted net income for the trailing 12 months?
A: The adjusted EBITDA for the last 12 months was approximately $9.5 million. This quarter, the adjusted EBITDA was $6.4 million, and for the last year, it was $6.3 million. Therefore, the adjusted EBITDA for the trailing 12 months should be around $9.3-$9.4 million.
Q: Can you explain the seasonality of your operations in Canada and South America?
A: In Canada, Q1 (July to September) and Q4 (April to June) are strong quarters due to favorable weather conditions. Q2 and Q3 are more challenging due to winter and the holiday season. In Chile, Q1 is lower due to winter conditions, such as snow in the mountains, which affects operations.
Q: Is it realistic to achieve $20 to $25 million adjusted EBITDA for the 12 months ending in June 2025?
A: We do not provide guidance on future EBITDA, but in the last six months, we achieved approximately $13 million in adjusted EBITDA. We hope to maintain stability in our performance.
Q: Why is the profitability of international operations almost equal to Canada despite having significantly more revenue in Canada?
A: In Canada, there is high competition and negative pricing pressure on non-specialized projects. We focus on specialized contracts for better margins. Internationally, particularly in Chile and Guyana, we have large contracts with less pricing pressure, resulting in good margins despite lower revenue.
Q: Are there any plans to improve pricing in Canada?
A: We are focusing on specialized contracts in Canada to improve margins, as these contracts face less pricing pressure compared to non-specialized projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
