FORACO INTERNATIONAL S.A.

Unaudited Condensed Interim Consolidated Financial Statements

Three‐month period ended

March 31, 2024

1

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Table of Contents

Unaudited condensed interim consolidated balance sheet ‐ Assets

3

Unaudited condensed interim consolidated balance sheet - Equity and Liabilities

4

Unaudited condensed interim consolidated income statement

5

Unaudited condensed interim consolidated statement of changes in equity

6

Selected notes to the unaudited condensed interim consolidated financial statements

8

1.

Basis of preparation

8

2.

Selected notes on critical accounting policies and new accounting pronouncements

8

3.

Financial risk management

10

4.

Segment information

10

5.

Property, plant and equipment

11

6.

Goodwill

12

7.

Inventories

12

8.

Financial debt and lease obligations

12

9.

Provisions

13

10. Share capital and change in equity

13

11.

Expenses by nature

14

12.

Income tax expense

14

13.

Commitments and contingencies

15

14.

Related‐party transactions

15

15. Earnings per share calculation

15

16. Post balance sheet events

15

2

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Unaudited condensed interim consolidated balance sheet ‐ Assets

in thousands of US$

Note

March 31,

December 31,

2024

2023

ASSETS

Non‐current assets

Property, plant and equipment

(5)

48,841

51,456

Goodwill

(6)

62,377

65,618

Deferred income tax assets

16,598

19,462

Other non‐current assets

804

916

128,619

137,452

Current assets

Inventories, net

(7)

40,755

45,583

Trade receivables, net

69,431

51,601

Other current assets

14,134

10,804

Cash and cash equivalents

18,331

34,289

142,652

142,277

Total assets

271,272

279,729

3

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Unaudited condensed interim consolidated balance sheet - Equity and Liabilities

in thousands of US$

Note

March 31,

December 31,

2024

2023

EQUITY

Capital and reserves attributable to the Company's

equity holders

Share capital

2,499

2,499

Share premium, reserves and retained earnings

79,979

83,424

82,478

85,923

Non‐controlling interests

5,828

12,136

Total equity

88,306

98,059

LIABILITIES

Non‐current liabilities

Borrowings ‐ Non‐current portion of long‐term debt

(8)

75,586

79,056

Lease obligations - Non current portion

(8)

3,223

4,139

Deferred income tax liabilities

1,161

2,365

Provisions for other liabilities and charges

(9)

795

815

Current liabilities

Trade payables

36,955

34,513

Other payables

31,425

35,818

Current income tax liabilities

9,043

8,415

Borrowings ‐ Current portion of long‐term debt

(8)

12,751

13,317

Borrowings ‐ Current portion of drawn credit lines

(8)

9,145

244

Lease obligations ‐ Current portion

(8)

2,643

2,731

Provisions for other liabilities and charges

(9)

239

257

Total liabilities

182,965

181,670

Total equity and liabilities

271,272

279,729

Net debt including operating lease obligations under IFRS 16

85,016

65,198

Net debt including operating lease obligations is a non IFRS measure and corresponds to the current and non‐ current portion of borrowings, net of cash and cash equivalents

4

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Unaudited condensed interim consolidated income statement

In thousands of US$

Three‐month period ended

March 31,

Note

2024

2023

Revenue

(4)

77,089

88,378

Cost of sales

(11)

(60,277)

(67,260)

Gross profit

16,812

21,118

Selling, general and administrative expenses

(11)

(6,299)

(6,904)

Other operating income / (expense), net

(2.3)

2,111

‐

Operating profit

12,624

14,214

Finance costs

(1,742)

(3,568)

Profit before income tax

10,882

10,646

Income tax (expense) / profit

(12)

(2,418)

(2,645)

Net profit for the period

8,464

8,001

Attributable to:

Equity holders of the Company

8,846

6,635

Non‐controlling interests

(382)

1,366

Earnings per share for profit attributable to the equity holders of the Company

during the period (expressed in US cents per share):

‐ basic

(15)

8.96

6.70

‐ diluted

(15)

8.78

6.56

Operating profit before depreciation, amortization and non‐cash share based

17,574

19,130

compensation expenses

5

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Unaudited condensed interim consolidated statement of changes in equity

Attributable to equity holders of the

Non‐

Total

Share

Share

Total

controlling

Equity

in thousands of US$

Capital

Premium and

interests

Retained

Earnings

Balance at January 1, 2023

2,499

62,688

65,187

10,305

75,492

Profi t / (loss) for the period

‐

6,635

6,635

1,366

8,001

Currency translation differences

‐

2,197

2,197

(745)

1,452

Employee share‐based compensation

‐

90

90

‐

90

Treasury shares purchased (see Note 10)

‐

(393)

(393)

‐

(393)

Dividend paid to non controlling interests

‐

‐

‐

(1,944)

(1,944)

Balance at March 31, 2023

2,499

71,218

73,717

8,982

82,699

Balance at January 1, 2024

2,499

83,424

85,923

12,136

98,059

Profit / (loss) for the period

‐

8,846

8,846

(382)

8,464

Currency translation differences

‐

(6,902)

(6,902)

(887)

(7,789)

Employee share‐based compensation

‐

102

102

‐

102

Deconsolidation of EDC Russia

(5,222)

(5,222)

(4,710)

(9,932)

Treasury shares purchased (see Note 10)

‐

(269)

(269)

‐

(269)

Dividend paid to non controlling interests

‐

‐

‐

(330)

(330)

Balance at March 31, 2024

2,499

79,979

82,478

5,828

88,306

Unaudited statement of comprehensive income

in thousands of US$

March 31,

March 31,

2024

2023

Net profit / (loss) for the period

8,464

8,001

Currency translation differences

(7,789)

1,452

Total comprehensive profit for the period

675

9,453

Attributable to:

Equity holders of the Company

1,944

8,832

Non‐controlling interests

(1,269)

621

6

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Unaudited condensed interim consolidated cash flow statement

in thousands of US$

Three month ended March 31,

2024

2023

Profit for the period

8,464

8,001

Adjus tments for:

‐ Depreciation, amortization and impairment (see Note 11)

4,847

4,826

‐ Share‐based compensation expenses (see Note 11)

102

90

‐ Income tax expenses / (profit) (see Note 12)

2,418

2,645

‐ Finance costs, net

1,742

3,568

Cash generated from operations before changes in operating assets

and liabilities

17,573

19,130

Changes in operating assets and liabilities:

‐ Inventories

(1,636)

(853)

‐ Trade accounts receivable and other receivables

(25,052)

(18,981)

‐ Trade accounts payable and other payables

(28)

9,293

Cash generated from / (used in) operations

(9,142)

8,589

‐ Interest paid, net

(1,710)

(3,314)

‐ Income tax paid

(1,904)

(2,402)

Net cash flow from / (used in) operating activities

(12,756)

2,873

Purchase of property, plant and equipment (*)

(6,198)

(8,572)

Net cash generated from / (used in) investing activities

(6,198)

(8,572)

Proceeds from issuance of borrowings, net of issuance costs

‐

1,532

Repayments of borrowings

(1,834)

(383)

Repayments of lease obligations

(672)

(604)

Proceeds from / (repayment of) short term credit facilities

8,906

4,705

Acquisition of treasury shares (see Note 10)

(269)

(393)

Deconsolidation of EDC Russia (See Note 2.3)

(2,076)

‐

Dividends paid to non‐controlling interests

(330)

(398)

Net cash generated from / (used in) financing activities

3,725

4,458

Exchange differences on cash and cash equivalents

(728)

(556)

Net increase / (decrease) in cash and cash equivalents

(15,957)

(1,796)

Cash and cash equivalents at beginning of the period

34,289

29,408

Cash and cash equivalents at end of the period

18,331

27,611

(*) Excluding acquisition financed through leases

‐

1,702

7

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

Selected notes to the unaudited condensed interim consolidated financial statements

1. Basis of preparation

These unaudited condensed interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. All material intercompany balances have been eliminated. Due to the fact that all the disclosures required by IFRS are not included, these interim statements should be read in conjunction with the audited financial statements of Foraco International S.A. and its subsidiaries ("Foraco" or the "Company") for the year ended December 31, 2023.

Except when otherwise stated, all amounts are presented in thousands of US$, which is the presentation currency of the Company.

2. Selected notes on critical accounting policies and new accounting pronouncements

2.1. Accounting policies

The accounting policies have been consistently applied with those of the annual financial statements for the year ended December 31, 2023 except for the following: during the year, the income tax expense is recognized based on Management's best estimate of the average annual income tax rate expected for the full financial year on a tax jurisdiction by tax jurisdiction basis. In the last quarter of each fiscal year, Management determines the effective income tax rate for the full year based on the anticipated actual tax returns to be filed and the effective contribution of each tax jurisdiction to the consolidated financial statements.

2.2. Seasonal fluctuations

The worldwide presence of the Company reduces its overall exposure to seasonality and its influence on business activity. In West Africa, most of the Company's operations are suspended between July and October due to the rainy season. In Canada, seasonal slow periods occur during the winter freeze and spring thaw or break‐up periods. Depending on the latitude, this can occur anytime from October until late December (freezing) and from mid‐April through to mid‐June (break‐up). Operations at mining sites continue throughout the year. CIS is also affected by the winter period during which certain operations are slowed down. In Asia Pacific and in South America, a seasonal slowdown in activity occurs around year‐end during the vacation period. Certain contracts are also affected in Chile in July and August when the winter season peaks.

2.3. Sale of the Company's Russian subsidiary

On March 6, 2024, Foraco finalized the share purchase agreement to sell its 50% stake in Eastern Drilling Company (EDC) Russia to local partners. The share transfer was registered with Russian tax authorities on March 15, 2024, marking the last day EDC Russia was included in Foraco's consolidated financial statements. From the beginning of the year until the transfer, EDC Russia added $3.6 million to Foraco's revenues and contributed $0.1 million in net income. This transaction resulted in a net gain of $2.1 million for Foraco, which was recorded within "other operating income" in Foraco's

8

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

consolidated financial statements as of March 31, 2024. As outlined in the subsequent notes,, the deconsolidation of EDC impacted several balance sheet items, notably the available cash, which amounted to $2.1 million at the date of the transaction.

2.4. Impairment testing

As at December 31, 2023, the Company performed impairment tests at the level of each geographic region using the carrying value of the Company's long lived assets based on the expected discounted cash flows method. Based on the internal forecasts and projections made, the expected discounted future cash flows exceeded each of the long‐lived asset's carrying amount for each geographic region and accordingly no impairment was recognized as at December 31, 2023.

2.5. Deferred tax valuation allowance

The Company's policy is to recognize deferred tax assets only when they can be recovered within a reasonable timeframe. As a general rule, the Company recognizes deferred tax assets only when they can be used against taxable profit, generally within five years or when available tax opportunities exist. On this basis, the Company has adopted a partial recognition‐based approach and has recorded certain valuation allowances.

2.6. New accounting pronouncements

The consolidated

interim

financial

statements

have

been

prepared

using

the same accounting policies and methods of

evaluation

as those

disclosed

in the December 31,

2023, annual financial statements.

New standards and amendments effective for periods beginning on January 1, 2024, and therefore relevant to these interim financial statements.

Effective January 1, 2024:

Non‐current Liabilities with Covenants and Classification of Liabilities as Current or Non‐current (Amendments to IAS 1): These amendments provide clarity on how covenants affect the classification of liabilities, ensuring that entities classify liabilities based on circumstances existing at the end of the reporting period.

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16): This amendment revises the accounting treatment for sale and leaseback transactions, defining how to measure and recognize lease liabilities and assets in such arrangements.

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7): These changes enhance transparency in reporting supplier finance arrangements, requiring detailed disclosure of their terms and impacts on liquidity and cash flow.

9

Foraco International S.A.

Unaudited condensed interim consolidated financial statements as of March 31, 2024

General Requirements for Disclosure of Sustainability‐related Financial Information (IFRS S1) and Climate‐related Disclosures (IFRS S2): New standards aiming to integrate sustainability and climate‐ related financial information into mainstream financial statements.

The application of these new standard and amendments has not had any material impact on the interim consolidated financial statements of the Company.

Pronouncements with a mandatory effective date in future accounting periods

Effective January 1, 2025:

Lack of Exchangeability (Amendments to IAS 21): This amendment addresses how to determine the exchange rate to use when the currency is not exchangeable, providing guidance on the accounting treatment in such scenarios.

The impact on the consolidated financial statements of the Company of these pronouncements is currently being evaluated.

3. Financial risk management

The Company is exposed to a variety of financial risks through its activity including: liquidity risk, currency risk, cash transfer restriction, interest rate, financial counter‐party risk and credit risk.

A significant portion of the cash flows of the Company are mainly denominated in Canadian Dollars, Euros, Australian Dollars, Brazilian Real, and US Dollars. The financial performance and position as reported in US$ are dependent on the fluctuations of the US$ against the other mentioned currencies of the Group.

4. Segment information

The business segment information for the three‐month periods ended March 31, 2024 and March 31, 2023 is as follows:

Mining

Water

Group

Three‐month period ended

March 31,

March 31,

March 31,

2024

2023

2024

2023

2024

2023

Revenue

69,046

74,519

8,043

13,859

77,089

88,378

Gross profit

15,446

17,644

1,366

3,474

16,812

21,118

Operating profit

11,915

11,823

709

2,391

12,624

14,214

Finance costs

n/a

n/a

n/a

n/a

(1,742)

(3,568)

Profit before income tax

n/a

n/a

n/a

n/a

10,882

10,646

Income tax profit / (expense)

n/a

n/a

n/a

n/a

(2,418)

(2,645)

Net profit for the period

n/a

n/a

n/a

n/a

8,464

8,001

10

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Foraco International SA published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 12:45:40 UTC.