Connect with us

Finance

Orbit Garant Drilling Reports Fiscal 2020 Second Quarter Financial Results

Published

on

VAL-D’OR, QC, Feb. 12, 2020 /CNW/ – Orbit Garant Drilling Inc. (TSX: OGD) (“Orbit Garant” or the “Company”) today announced its financial results for the three and six-month periods ended December 31, 2019. All dollar amounts are in Canadian dollars unless otherwise stated. Percentage calculations are based on numbers in the financial statements and may not correspond to rounded figures presented in this news release.

Financial Highlights

($ amounts in millions,

except per share amounts)

Three months ended
December 31, 2019

Three months ended
December 31, 2018

Six months ended

December 31, 2019

Six months ended

December 31, 2018

Revenue

$38.3

$33.7

$81.6

$71.0

Gross Profit

$2.4

$2.9

$9.3

$8.5

Gross Margin (%)

6.3

8.6

11.5

12.0

Adjusted Gross Margin (%)¹

12.5

15.2

17.2

17.9

EBITDA2

$1.0

$0.9

$6.1

$4.3

Net loss

$(2.4)

$(1.7)

$(1.3)

($1.3)

Net loss per share





       – Basic and diluted

$(0.06)

$(0.04)

$(0.03)

($0.03)

Total metres drilled

365,696

311,318

753,120

627,363


1

Adjusted Gross Margin is a non-IFRS financial measure and is defined as Gross Profit excluding depreciation
expenses. See “Reconciliation of Non-IFRS financial measures”.


2

EBITDA is a non-IFRS financial measure and is defined as earnings before interest, taxes, depreciation, and
amortization. See “Reconciliation of Non-IFRS financial measures”.

“Our growth in revenue and metres drilled in the quarter was driven by increased drilling activity in Canada, a trend that is supported by the strengthening price of gold, which is currently at its highest levels since 2013. This is providing gold mining companies of all sizes with improved access to capital to support the advancement of their exploration and mine development drilling programs,” said Eric Alexandre, President and CEO of Orbit Garant.

“Our fiscal second quarter is typically our weakest quarter due to project shutdowns during the December holidays and decreased drilling activity in West Africa due to the rainy season.  Beyond these seasonal factors, our international operations were also impacted by civil protests in Chile and regional security issues in Burkina Faso during the quarter, which resulted in delays or interruptions of certain customer projects. These factors, combined with the conclusion of a multi-year drilling contract in Chile, impacted our gross margins in the quarter,” added Mr. Alexandre. “Looking ahead, we are pleased by the strengthening customer demand in Canada. We expect increasing industry utilization rates in Canada to have a positive impact on contract pricing. Internationally, we believe the political situation in Chile has stabilized and while we continue to monitor Burkina Faso, we are actively seeking drilling projects in other jurisdictions in West Africa.”

Second Quarter Results

Revenue for the three-month period ended December 31, 2019 (“Q2 FY 2020”) totalled $38.3 million, an increase of 13.6% compared to $33.7 million for the three-month period ended December 31, 2018 (“Q2 FY2019”). Drilling Canada revenue increased 21.2% to $28.6 million, compared to $23.6 million in Q2 FY2019, reflecting increased meters drilled. International revenue was $9.7 million, a decrease of $0.4 million compared to $10.1 million in Q2 FY2019, reflecting the completion of a multi-year drilling contract in Chile during the fourth quarter of fiscal 2019 and a decrease in drilling activities in Burkina Faso and Ghana, partially offset by new drilling projects in Guyana and Argentina. 

Orbit Garant drilled a total of 365,696 metres in Q2 FY2020, a 17.5% increase from the 311,318 metres drilled in Q2  FY2019. The Company’s average revenue per metre drilled in Q2 FY2020 was $104.53, compared to $107.85 in Q2 FY2019. The decline in average revenue per metre drilled was attributable to a decrease in international specialized drilling activity.  

Gross profit for Q2 FY2020 was $2.4 million, or 6.3% of revenue, compared to $2.9 million, or 8.6% of revenue, in Q2 FY2019. Adjusted gross margin, excluding $2.4 million in depreciation expenses, was 12.5% in Q2 FY2020, compared to adjusted gross margin, excluding $2.2 million in depreciation expenses, of 15.2% in Q2 FY2019. The decline in gross profit and margins was primarily attributable to the completion of a large drilling contract in Chile during the fourth quarter of fiscal 2019 and decreased drilling activity in Burkina Faso.

General and administrative (“G&A”) expenses were $4.2 million, or 10.8% of revenue, in Q2 FY2020, compared to $4.9 million, or 14.4% of revenue, in Q2 FY2019. G&A expenses in Q2 FY2020 included $0.1 million of acquisition and integration costs related to the acquisition of the drilling business of Projet Production International BF S.A. (“PPI”) in Burkina Faso, compared to $0.7 million in Q2 FY2019. 

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $1.0 million in Q2 FY2020, compared to $0.9 million in Q2 FY2019. Net loss for Q2 FY2020 was $2.4 million, or $0.06 per share, compared to net loss of $1.7 million, or $0.04 per share, in Q2 FY2019.

During Q2 FY2020, Orbit Garant generated $1.5 million from financing activities, compared to $7.6 million in Q2 FY2019. The Company withdrew a net amount of $2.3 million during Q2 FY2020 on its secured, three-year revolving credit facility (the “Credit Facility”) with National Bank of Canada Inc. (the “Lender”), compared to a withdrawal of $7.1 million in Q2 FY2019. The Company’s long-term debt under the Credit Facility, including the current portion, was $30.4 million as at December 31, 2019, compared to $25.3 million as at June 30, 2019. The Company’s debt was incurred to support working capital requirements, the financing of the PPI acquisition in Q2 FY2019, and the acquisition of capital assets, property, plant and equipment.

As at December 31, 2019, the Company’s working capital was $57.7 million ($55.1 million as at June 30, 2019) and 37,021,756 common shares were issued and outstanding.

Orbit Garant’s unaudited interim consolidated financial statements and management’s discussion and analysis for Q2  FY2020 are available via the Company’s website at www.orbitgarant.com or SEDAR at www.sedar.com

Conference call

Eric Alexandre, President and CEO, and Alain Laplante, Vice President and CFO, will host a conference call for analysts and investors on Thursday, February 13, 2020 at 10:00 a.m. (ET). The dial-in numbers for the conference call are 416-764-8609 or 1-888-390-0605. A live webcast of the call will be available on Orbit Garant’s website at: http://www.orbitgarant.com/en/sites/fog/investors.aspx.

To access a replay of the conference call, dial 416-764-8677 or 1-888-390-0541, passcode: 826292 #. The replay will be available until February 20, 2020. The webcast will be archived following conclusion of the call.     

RECONCILIATION OF NON – IFRS FINANCIAL MEASURES

Financial data has been prepared in conformity with IFRS. However, certain measures used in this discussion and analysis do not have any standardized meaning under IFRS and could be calculated differently by other companies. The Company believes that certain non-IFRS financial measures, when presented in conjunction with comparable IFRS financial measures, are useful to investors and other readers because the information is an appropriate measure to evaluate the Company’s operating performance. Internally, the Company uses this non-IFRS financial information as an indicator of business performance. These measures are provided for information purposes, in addition to, and not as a substitute for, measures of financial performance prepared in accordance with IFRS.

EBITDA:
Net earnings (loss) before interest, taxes, depreciation and amortization.

Adjusted gross profit:
Contract revenue excluding operating expenses. Operating expenses comprise material and service expenses personnel expenses, other operating expenses, excluding depreciation.

EBITDA

Management believes that EBITDA is an important measure when analyzing its operating profitability, as it removes the impact of financing costs, certain non-cash items and income taxes. As a result, Management considers it a useful and comparable benchmark for evaluating the Company’s performance, as companies rarely have the same capital and financing structure.

Reconciliation of EBITDA

(unaudited)

(in millions of dollars)

3 months ended

December 31, 2019

3 months ended

December 31, 2018

6 months ended

December 31, 2019

6 months ended

December 31, 2018

Net loss for the period

(2.4)

(1.7)

(1.3)

(1.3)

Add:





Finance costs

0.7

0.5

1.4

0.9

Income tax expense (recovery)

(0.1)

(0.4)

0.4

Depreciation and amortization

2.8

2.5

5.6

4.7

EBITDA

1.0

0.9

6.1

4.3

Adjusted Gross Profit and Margin

Although adjusted gross margin and margin are not recognized financial measures defined by IFRS, Management considers them to be important measures as they represent the Company’s core profitability, without the impact of depreciation expense. As a result, Management believes they provide a useful and comparable benchmark for evaluating the Company’s performance.

Reconciliation of Adjusted Gross Profit and Margin 











(unaudited)

(in millions of dollars)

3 months ended

December 31, 2019

3 months ended

December 31, 2018

6 months ended

December 31, 2019

6 months ended

December 31, 2018






Contract revenue

38.3

33.7

81.6

71.0

Cost of contract revenue
(including depreciation)

35.9

30.8

72.3

62.5

Less depreciation

(2.4)

(2.2)

(4.7)

(4.2)

Direct costs

33.5

28.6

67.6

58.3

Adjusted gross profit

4.8

5.1

14.0

12.7

Adjusted gross margin (%) (1) 

12.5

15.2

17.2

17.9

(1) 

 Adjusted gross profit, divided by contract revenue X 100

About Orbit Garant

Headquartered in Val-d’Or, Quebec, Orbit Garant is one of the largest Canadian-based mineral drilling companies, providing both underground and surface drilling services in Canada and internationally through its 233 drill rigs and more than 1,300 employees. Orbit Garant provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production. The Company also provides geotechnical drilling services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies. For more information, please visit the Company’s website at www.orbitgarant.com.

Forward-looking information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Orbit Garant Drilling Inc. (the “Company”) and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company’s regulatory filings available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

SOURCE Orbit Garant Drilling Inc.

For further information: Alain Laplante, Vice President and Chief Financial Officer, (819) 824-2707 ext. 122; Bruce Wigle, Investor Relations, (647) 496-7856

Related Links

www.orbitgarant.com

Source link

Finance

HSBC Loyalists Lose Faith After Stock’s $83 Billion Plunge

Published

on

By

(Bloomberg) — HSBC Holdings Plc’s tumbling stock price is testing the patience of even the bank’s most loyal investors.

Choi Chen Po-sum, a former vice chair of Hong Kong’s exchange who has owned HSBC shares for more than 40 years, now calls her investment a mistake. Simon Yuen, a money manager who has lobbied unsuccessfully for the bank to reinstate its dividend, says the stock’s slump to a 25-year low may have further to go. Ping An Insurance Group Co., HSBC’s biggest shareholder, has passed on opportunities to express confidence in the bank, saying only that its holding is a “long-term financial investment.”

The responses underscore the depth of investor malaise toward HSBC, which has tumbled faster than every other major financial stock globally over the past six months. Even historically upbeat sell-side analysts have mostly turned bearish on the bank amid growing concerns about loan losses and its ability to navigate mounting tensions between the U.S. and China.

“I’ve lost faith,” said Choi, 89, who’s chair of National Resources Securities Ltd. in Hong Kong, where scores of individual investors have long considered HSBC to be a core holding. “You want the shares to recover? Don’t even think about it.”

HSBC’s Hong Kong shares lost as much as 2.6% as of 11:15 a.m. on Thursday. The stock has tumbled more than 9% so far this week, bringing the year’s decline to 54% and making it the worst performer in the benchmark Hang Seng Index. In London, the shares have fallen about 51%. After losing $83 billion of market value this year, HSBC is now smaller than Commonwealth Bank of Australia and trailing far behind major rivals such as Citigroup Inc.

Analysts have never been so downbeat on HSBC, with only 16.7% of 30 who follow the stock having a buy recommendation whereas just two years ago the ratio was 47%. Even after its slump, the bank is valued at 16.3 times forecast earnings for 2020, a pricier level than some peers. Both Citigroup and smaller rival Standard Chartered Plc trade at multiples of about 13.

Ping An, which has owned a major stake in HSBC since late 2017, has seen the value of those shares tumble by at least $8.6 billion over the past three years, according to data compiled by Bloomberg.

The depth of HSBC’s slump “means even long-term investors are starting to lose confidence in the stock, which is certainly a bad sign,” said Benny Lee, a director at Plotio Financial Group Ltd.

HSBC declined to comment on its share performance.

The growing disillusion in Hong Kong with the bank’s prospects comes after it earlier this year was among banks forced by U.K. regulators to scrap its dividend, causing an uproar with the city’s broad base of retail investors. It has also rankled China over its participation in the American investigation of Huawei Technologies Co.

Concerns are mounting that the bank’s expansion in China will be derailed after the ruling Communist Party’s Global Times newspaper reported over the weekend that HSBC could be named an “unreliable entity.” Penalties for companies that appear on the list include restrictions on trade, investments and visas. HSBC has declined to comment on the article.

“Should it be on the list, even without tough measures taken, its mainland China business would likely be adversely impacted as its clients reduce transactions,” Citigroup analysts led by Yafei Tian wrote in a note on Tuesday. “Mainland China clients in HK might also avoid unnecessary transactions with HSBC HK. In a worst case scenario, HSBC might be forced to divest its investments in mainland China.”

HSBC Chief Executive Officer Noel Quinn last month warned about tough times ahead while reporting that first-half profit halved and predicting loan losses could swell to $13 billion this year. Quinn said the bank would attempt to hasten a shakeup of its global operations, accelerating a further pivot into Asia as its European operations lose money.

Some investors aren’t convinced it’s enough.

In Hong Kong’s derivatives market, the second-most traded HSBC stock option on Thursday was a bearish contract betting the shares will drop to HK$18.50 by the end of December. That implies a downside of more than 30% from HSBC’s current levels. The most traded option was a bullish call that expires next week at HK$30, with the contract losing three-quarters of its value.

“The share price will hardly recover in the near term and there’s still room for a further decline,” said Yuen, founder of Surich Asset Management. “Hong Kong investors’ love for HSBC is still there, but it’s indeed heartbreaking. The times have changed.”

(Updates with HSBC options trading in the penultimate paragraph.)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

Source link

Continue Reading

Finance

Timbercreek Financial Declares September 2020 Dividend | 2020-09-23 | Press Releases

Published

on

By

TORONTO, Sept. 23, 2020 (GLOBE NEWSWIRE) — Timbercreek Financial (TSX: TF) (the “Company”) is pleased to announce that its board of directors (the “Board”) has declared a monthly cash dividend of $0.0575 per common share (“Common Share”) of the Company to be paid on October 15, 2020 to holders of Common Shares of record on September 30, 2020.

The Company also offers a Dividend Reinvestment Plan (the “Plan”), which is eligible to holders of Common Shares and provides a convenient means to purchase additional Common Shares by reinvesting cash dividends at a potential discount and without having to pay commissions, service charges or brokerage fees.

Pursuant to the Plan and at the discretion of Timbercreek Capital Inc., the Manager, Common Shares will be acquired in the open market at prevailing prices or issued from treasury at 98 percent of the average market price (the “Average Market Price”) for the five trading day period ending on the third business day immediately prior to the dividend payment date (the “Trading Period”).

Common Shares acquired under the Plan will be automatically enrolled in the Plan. Shareholders who hold their Common Shares through a broker, financial institution or other nominee must enroll for distribution reinvestment through their nominee holder.

The full text of the Plan can be obtained on the Company’s website at https://www.timbercreekfinancial.com/investor-relations/dividend-reinvestment-plan

About Timbercreek Financial

Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to commercial real estate investors. Our sophisticated, service-oriented approach allows us to meet the needs of borrowers, including faster execution and more flexible terms that are not typically provided by Canadian financial institutions. By employing thorough underwriting, active management and strong governance, we are able to meet these needs while targeting strong risk-adjusted returns for investors.

CONTACT:

Timbercreek Financial

Cam Goodnough

President & CEO

cgoodnough@timbercreek.com

www.timbercreekfinancial.com

Primary Logo

Source link

Continue Reading

Finance

Tesla Slumps as Battery Day Letdown Clouds $320 Billion Gain

Published

on

By

(Bloomberg) — Tesla Inc.’s highly anticipated “Battery Day” fell short of expectations that helped fuel its $320 billion surge in market value this year, with Elon Musk outlining grandiose goals that will take time to pull off.

The chief executive officer laid out a plan Tuesday to build a $25,000 car and cut battery costs in half over the next three years. Analysts said while the technology and manufacturing innovations outlined were impressive, Tesla’s valuation already reflected its ability to disrupt and investors may be let down by the lack of surprises at the much-hyped battery-showcase event.

This seemed to be the case on Wednesday, as the company’s shares fell as much as 10% to $380. They were trading at $380.16 as of 2:48 p.m. in New York and are up about 360% for the year so far.

“With the Battery Day in the rearview, we think there is a lack of upcoming catalysts and are cautious about demand given the recessionary environment,” Robert W. Baird’s Ben Kallo wrote in a Wednesday report naming Tesla a bearish “fresh pick.”

That was echoed by Patrick Hummel, an analyst at UBS with a “neutral” rating on the stock, who said in a research note Tesla’s leadership in battery technology and costs is fully valued into the stock. “Given the high expectations into the event, we think the market will initially respond negatively to the relatively long timelines of the innovations and the lack of granularity,” he wrote.

Musk, 49, said Tesla wants eventually to produce 20 million cars a year. He described a series of innovations that include using dry-electrode technology and making the battery a structural element of the car. Those incremental and longer-term advances belied expectations for a blockbuster leap forward, which Musk himself played up in the weeks leading up to the event.

“The challenge with the stock is that everything they are talking about is three years away,” said Gene Munster, managing director of Loup Ventures. “I think traditional auto is in an even tighter spot, but Tesla investors want this tomorrow.”

Vertical-integration improvements — from making its own battery cells on a pilot line at its factory in Fremont, California, to owning rights to a lithium clay deposit in Nevada — are designed to allow Tesla to cut costs and offer a cheap car as soon as 2023.

“This has always been our dream from the very beginning,” Musk said at the event focused on Tesla’s battery technology. “In about three years from now, we are confident we can make a compelling $25,000 electric vehicle that is also fully autonomous.”

Halving Battery Costs

Musk is teasing prospects for a cheaper mystery model without ever having really delivered on the $35,000 price point he had long promised for the Model 3. Three years after Tesla started taking orders for the car in early 2016, the CEO announced plans to close most of Tesla’s stores as a cost-saving measure, allowing him to offer the car at that cost. He backtracked 10 days later, and the cheapest Model 3 available now is $37,990.

Making a truly mass-market electric car and boosting Tesla’s current annual production to 20 million cars will require vastly more batteries than are currently being produced from a handful of suppliers around the world. So Musk plans to expand global capacity by manufacturing battery cells in-house to supplement what it can buy.

“Today’s batteries can’t scale fast enough,” said Musk, who is driven in part by the need to find sustainable energy sources. “There’s a clear path to success but a ton of work to do.” Musk said the gasoline-powered internal-combustion engine will one day be obsolete.

Musk described an “incredible series of innovations with varying levels of difficulty,” said Venkat Viswanathan, a battery expert at Carnegie Mellon University. While battery-manufacturing advances are feasible and deliverable in the three-year time frame, Viswanathan thinks that chemistry developments will take a longer.

If the planned innovations pay off, vehicle range could increase 54%, cost could decrease 56% and investment in gigafactories could decline 69%, said Andrew Baglino, Tesla’s senior vice president for powertrain and energy engineering.

BloombergNEF estimates Tesla’s pack prices were $128/kWh in 2019. A 56% cost reduction would bring prices down to $56/kWh. In addition to the pilot line for battery-cell production in Fremont, and Musk said the company also will make cells at the factory that is under construction in Berlin.

Battery Cell ‘Leap’

Most global automakers have shied away from making their own battery cells, citing the high investment costs and their lack of expertise in an industry dominated mostly by Asian electronics manufactures such as Panasonic Corp. and LG Chem Ltd.

Musk said in a tweet Monday that Tesla will need to start producing its own battery cells to support its various products, even as it ramps up purchases from outside suppliers. He wrote that the company expects significant shortages of cells in 2022 and beyond unless it ramps up output of its own.

“I’m really surprised that they’re taking that leap themselves,” said Tony Posawatz, a consultant who led development of General Motors Co.’s plug-in hybrid Chevrolet Volt and now sits on the board of Lucid Motors Inc., a Tesla rival. “I think this is going to be a bit harder than what they think, and I don’t think we’ll see a lot of volume out of that for quite some time.”

Tesla’s most important and long-standing partner on batteries is Osaka-based Panasonic, but it also has smaller-scale agreements with Contemporary Amperex Technology Co., or CATL, in China’s Fujian province and South Korea’s LG Chem.

Read more: LG Chem, Panasonic Slide as Tesla Looks to Lower Battery Costs

The highly technical Battery Day presentation included several nuggets of news that were overshadowed by the talk of cathodes and electrolytes. One example: The “Plaid” version of the Model S sedan — with a range of 520 miles — is now available to order, though the vehicle isn’t expected to go on sales until late 2021.

Tuesday’s three-hour event began with the annual shareholder meeting, held outside to allow for social distancing. Shareholders sat in Tesla cars in a parking lot, beeping loudly instead of cheering as Musk spoke.

Investors voted to re-elect Musk and chairman Robyn Denholm to the board and voted against resolutions that would have required more transparency about human rights in the supply chain and the use of arbitration with employees. One shareholder resolution, which requires Tesla to adopt a simple majority vote, did pass.

Musk told shareholders he expects to see deliveries grow on the order of 30% to 40% this year, reaffirming Tesla’s forecast at a time when automakers are struggling to recover from the coronavirus pandemic. “While the rest of the industry has gone down, Tesla has gone up,” he said.

Tesla has said it anticipates delivering 500,000 vehicles in 2020, up about 36% from 2019. In July, the electric-car maker said achieving that goal would be “more difficult” due to a pandemic-related production shutdown early in the year. Global sales are projected to drop about 17% this year to 75 million from 90 million last year, according to research firm LMC Automotive.

(Updates stock performance in third paragraph)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

Source link

Continue Reading

Trending