FORACO INTERNATIONAL SA Toronto, Ontario / Marseille, France - Monday, March 1st, 2016. Foraco International SA (TSX:FAR) (the "Company" or "Foraco"), a leading global provider of mineral drilling services, today reported unaudited financial results for its fourth quarter 2015. All figures are reported in US Dollars (US$), unless otherwise indicated.
"As previously anticipated, market conditions in Q4 2015 continue to be depressed. In this context, we are pleased to report that, despite a 9% decrease in revenue (excluding the foreign exchange impact) compared to the same quarter last year, we were able to achieve solid operating performance on our contracts. Our EBITDA margin reached 21% of revenue, a level which has not been seen since the beginning of the industry crisis" said Daniel Simoncini, Chairman and co-CEO of Foraco. "In addition, our strategy to develop niche markets offering new technically complex services with higher added value is starting to pay off. Most of our capex is dedicated to these niche markets."
"During the quarter, we generated cash flows from operations of US$ 7.0 million to reach US$ 18.3 million for the full year. In spite of the market downturn, our free cash flows for the year amount to US$ 3.7 million, confirming the Company's unbroken track record of positive free cash flows year on year" commented Jean-Pierre Charmensat, co-CEO and Chief Financial Officer. "Our net debt reduced to US$ 89.3 million from US$ 96.7 million last year and all our financial covenants were met as at December 31, 2015. We have proven our ability to reorganize the company and generate cash despite a low utilization rate, this being achieved without any compromise to the quality of our services."
Revenue
Q4 2015 revenue amounted to US$ 29.5 million compared to US$ 40.1 million in Q4 2014, a decrease of 26%. Using Q4 2014 exchanges rates, Q4 2015 revenue decreased by 9%.
The utilization rate was 30% in Q4 2015 compared to 33% in Q4 2014.
Profitability
The Q4 2015 gross margin including depreciation within cost of sales was US$ 5.0 million (or 17% of revenue) compared to US$ 0.3 million (or 1% of revenue) in Q4 2014. The reduction in revenue was compensated by the effect of the cost cutting actions and the performance on contracts, as most projects have delivered their expected gross margin.
SG&A costs reduced by US$ 2.0 million between Q4 2014 and Q4 2015 as a result of foreign exchange variances and the full effect of the cost cutting action plans.
EBIT amounted to US$ 0.9 million in Q4 2015 compared to US$ (5.2) million in Q4 2014.
During the quarter, EBITDA amounted to US$ 6.2 million (or 21% of revenue) compared to US$ 1.7 million (or 4% of revenue) for the same quarter last year.
Capital expenditure was US$ 2.7 million in Q4 2015 compared to US$ 3.2 million in Q4 2014. This Capex is mainly linked to new contracts.
FY 2015 HighlightsRevenue
FY 2015 revenue amounted to US$ 137.7 million compared to US$ 185.5 million for the same period last year, a decrease of 26% or 7% excluding the impact of exchange rates.
Profitability
FY 2015 gross margin including depreciation within cost of sales was US$ 11.6 million compared to US$ 7.1 million in FY 2014. The Company encountered some operational difficulties on certain contracts in Q1 but subsequently the majority of contracts delivered their expected gross margin. The Company also benefited from the continuous effect of the cost cutting plans.
SG&A costs reduced from US$ 25.1 million in FY 2014 to US$ 17.8 million in FY 2015, a decrease of US$ 7.4 million (or 29%).
Cash flow and net debt
Capital expenditures were US$ 9.1 million in FY 2015 compared to US$ 10.1 million in FY 2014.
Free cash flow was US$ 3.7 million in FY 2015 compared to US$ 4.5 million in FY 2014.
The net debt reduced from US$ 96.7 million as at December 31, 2014 to US$ 89.3 million as at December 31, 2015.
The Company complied with its financial covenants as at December 31, 2015.
(In thousands of US$) -
(unaudited)
Three month period ended December 31, Year ended December 31,2015 | 2014 | 2015 | 2014 | |
Revenue | 29,528 | 40,094 | 137,684 | 185,525 |
Gross profit (1) | 4,990 | 285 | 11,601 | 7,093 |
As a percentage of sales | 16.9% | 0.7% | 8.4% | 3.8% |
EBITDA | 6,245 | 1,688 | 18,067 | 14,408 |
As a percentage of sales | 21.1% | 4.2% | 13.1% | 7.8% |
Operating profit / (loss) | 876 | (5,209) | (6,675) | (17,516) |
As a percentage of sales | 3.0% | -13.0% | -4.8% | -9.4% |
Profit / (loss) for the period | (332) | (5,895) | (9,916) | (19,412) |
Attributable to: Equity holders of the Company | (234) | (2,653) | (9,686) | (16,155) |
Non-controlling interests | (98) | (3,242) | (230) | (3,257) |
EPS (in US cents) Basic | (0.26) | (3.00) | (10.76) | (18.28) |
Diluted | (0.26) | (3.00) | (10.76) | (18.28) |
Revenue
(In thousands of US$) - (unaudited) Reporting segment Mining..................................... | Q4 2015 23,708 | % change -34% | Q4 2014 35,704 | FY 2015 119,358 | % change -27% | FY 2014 163,660 |
Water ..................................... | 5,820 | 33% | 4,390 | 18,326 | -16% | 21,865 |
Total revenue .......................... | 29,528 | -26% | 40,094 | 137,684 | -26% | 185,525 |
Geographic region Europe, Middle East and Africa ....... | 11,232 | 17% | 9,611 | 44,943 | -4% | 46,989 |
South America ........................... | 4,821 | -51% | 9,894 | 31,376 | -42% | 54,074 |
North America ........................... | 5,757 | -29% | 8,070 | 29,619 | -19% | 36,440 |
Asia Pacific............................... | 7,718 | -38% | 12,519 | 31,746 | -34% | 48,022 |
Total revenue .......................... | 29,528 | -26% | 40,094 | 137,684 | -26% | 185,525 |
Q4 2015 revenue amounted to US$ 29.5 million compared to US$ 40.1 million in Q4 2014, a decrease of 26%. Using Q4 2014 exchanges rates, Q4 2015 revenue decreased by 9%.
In EMEA, revenue increased by 17% (42% increase excluding the foreign exchange impact mainly linked to the Russian Ruble variance), from US$ 9.6 million in Q4 2014 to US$ 11.2 million in Q4 2015. Both Russia and Africa contributed to this increase.
Revenue in South America amounted to US$ 4.8 million in Q4 2015 (US$ 9.9 million in Q4 2014), a decrease of 51% or 30% excluding the foreign exchange impact, mainly due to reduced activity in Chile
and Argentina.
Revenue in North America decreased by 29% or 16% excluding the impact of exchange rates, due to the early termination and postponement of certain contracts.
In Asia Pacific, Q4 2015 revenue amounted to US$ 7.7 million, a decrease of 38%, or 27% excluding the impact of exchange rates, mainly due to the termination of one contract in Australia.
FY 2015 revenue amounted to US$ 137.7 million compared to US$ 185.5 million in FY 2014, a decrease of 26% or 7% excluding the impact of exchange rates.
In EMEA, revenue decreased from US$ 47.0 million in FY 2014 to US$ 44.9 million in FY 2015. Excluding the foreign exchange impact mainly linked to the Russian Ruble variance, revenue increased by 23% compared to last year.
Revenue in South America amounted to US$ 31.4 million in FY 2015 (US$ 54.1 million in FY 2014), a decrease of 42%. The activity in Chile reduced by 72% compared to FY 2014 due to contracts being halted and adverse climate conditions. This was partially offset by 8% increased activity in Brazil (excluding the impact of exchange rates) compared to last year and an increased activity in Argentina by US$ 1.4 million.
Revenue in North America decreased by 19%. Excluding the foreign exchange impact mainly linked to the Canadian Dollar variance, revenue decreased by 6% compared to last year.
In Asia Pacific, FY 2015 revenue amounted to US$ 31.7 million, a decrease of 34% or 20% excluding the impact of exchange rates, mainly due to pressure on selling prices, a lower utilization rate and the early termination of a contract.
Gross profit
(In thousands of US$) - (unaudited) Reporting segment | Q4 2015 | % change | Q4 2014 | FY 2015 | % change | FY 2014 |
Mining ................................. | 4,033 | n/a | 104 | 10,792 | 113% | 5,059 |
Water ................................. | 957 | n/a | 181 | 809 | -60% | 2,034 |
Total gross profit / (loss) ....... | 4,990 | n/a | 285 | 11,601 | 64% | 7,093 |
Q4 2015 gross margin including depreciation within cost of sales was US$ 5.0 million compared to US$
0.3 million in Q4 2014. The reduction in revenue was compensated by the effect of the cost cutting actions and the performance on contracts, as most projects have delivered their expected gross margin.
FY 2015 gross margin including depreciation within cost of sales was US$ 11.6 million compared to US$
7.1 million in FY 2014. The Company encountered some operational difficulties on certain contracts in Q1, but subsequently the majority of contracts delivered their expected gross margin. The Company also benefited from the continuous effect of the cost cutting plans.
Foraco International SA issued this content on 01 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 01 March 2016 13:14:15 UTC
Original Document: http://www.foraco.com/wp/wp-content/uploads/2016/03/Foraco-Press-Release-Q4-2015.pdf
