Quarterly Highlights
- Revenue of
$132.8 million , down 11% from the$149.2 million recorded for the same quarter last year. - Foreign exchange loss of
$2.9 million inArgentina due to significant devaluation of the Argentine Peso in December. - Net loss of
$2.3 million (or$0.03 per share), compared to net earnings of$6.3 million (or$0.08 per share) for the same period last year. - Repurchased 317,400 shares at a cost of
$2.7 million . - Net cash(1) position increased
$12.2 million during the quarter to$96.4 million . - Collaborative investments in cutting-edge technology with key customers for optimized drilling operations.
“The Company continued its cash generation through this third quarter, which is traditionally the weakest of our fiscal year, as mining and exploration companies pause operations for the holiday season. We continue to see increased demand from copper and battery metal customers, up 8% over last year, however, we saw several projects slow down earlier than last year, as noted in our previous quarter release,” said
“Globally, senior mining companies are well funded and are maintaining, and in some regions expanding drilling programs, even though calendar 2023 saw a slowdown in precious metal exploration, driven primarily by the reduction of funding for juniors and intermediates. Regionally, we have seen growth in several of our markets in
“The Company generated
“Amidst robust cash generation, we maintain the industry's largest, and one of the most modern fleets, with continued investment in strategic innovation. Over the last two years, in partnership with some of our key customers, we’ve developed cutting-edge technologies, including digitizing our rigs to capture drilling data, and the introduction of analytics to optimize drilling operations. Moreover, we started partnering with some of these customers to leverage this drilling data for the development of their models,” said
“As we enter our fourth quarter, we anticipate reaching last year's activity levels by April, after a slow start to the quarter due to delayed mobilizations. We are encouraged to see elevated activity levels returning in the coming months, driven by demand from copper and battery metals, while we wait for a rebound in activity and financing in the gold sector. Despite economic volatility, worldwide consumption of minerals and mine production continue at high levels, while reserves remain stagnant due to a lack of exploration. As the world transitions to a green economy, the potential supply and demand imbalance of various metals creates a positive long-term outlook for our industry, and the Company remains well positioned to capitalize on this potential,” concluded
In millions of Canadian dollars (except earnings per share) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | ||||||||||||
Revenue | $ | 132.8 | $ | 149.2 | $ | 538.7 | $ | 550.8 | ||||||||
Gross margin | 14.2 | % | 17.7 | % | 22.3 | % | 23.7 | % | ||||||||
Adjusted gross margin (1) | 23.4 | % | 25.3 | % | 28.8 | % | 29.7 | % | ||||||||
EBITDA (1) | 11.4 | 20.5 | 95.2 | 107.0 | ||||||||||||
As percentage of revenue | 8.5 | % | 13.7 | % | 17.7 | % | 19.4 | % | ||||||||
Net earnings (loss) | (2.3 | ) | 6.3 | 43.2 | 54.1 | |||||||||||
Earnings (loss) per share | (0.03 | ) | 0.08 | 0.52 | 0.65 |
(1) See “Non-IFRS Financial Measures”
Third Quarter Ended
Total revenue for the quarter was
Revenue for the quarter from
South and Central American revenue increased by 4.6% to
Australasian and African revenue decreased by 1.3% to
Gross margin percentage for the quarter was 14.2%, compared to 17.7% for the same period last year. Depreciation expense totaling
General and administrative costs were
Foreign exchange loss was
The income tax provision for the quarter was an expense of
Net loss was
Non-IFRS Financial Measures
The Company’s financial data has been prepared in accordance with IFRS, with the exception of certain financial measures detailed below. The measures below have been used consistently by the Company’s management team in assessing operational performance on both segmented and consolidated levels, and in assessing the Company’s financial strength. The Company believes these non-IFRS financial measures are key, for both management and investors, in evaluating performance at a consolidated level and are commonly reported and widely used by investors and lending institutions as indicators of a company’s operating performance and ability to incur and service debt, and as a valuation metric. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted gross profit/margin - excludes depreciation expense:
(in $000s CAD) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | ||||||||||||
Total revenue | $ | 132,824 | $ | 149,225 | $ | 538,659 | $ | 550,776 | ||||||||
Less: direct costs | 113,938 | 122,787 | 418,403 | 420,161 | ||||||||||||
Gross profit | 18,886 | 26,438 | 120,256 | 130,615 | ||||||||||||
Add: depreciation | 12,251 | 11,300 | 35,042 | 32,891 | ||||||||||||
Adjusted gross profit | 31,137 | 37,738 | 155,298 | 163,506 | ||||||||||||
Adjusted gross margin | 23.4 | % | 25.3 | % | 28.8 | % | 29.7 | % | ||||||||
EBITDA - earnings before interest, taxes, depreciation, and amortization:
(in $000s CAD) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | ||||||||||||
Net earnings (loss) | $ | (2,312 | ) | $ | 6,273 | $ | 43,155 | $ | 54,132 | |||||||
Finance (revenues) costs | (359 | ) | (620 | ) | (1,316 | ) | (164 | ) | ||||||||
Income tax provision | 924 | 2,507 | 15,534 | 17,333 | ||||||||||||
Depreciation and amortization | 13,097 | 12,330 | 37,866 | 35,700 | ||||||||||||
EBITDA | $ | 11,350 | $ | 20,490 | $ | 95,239 | $ | 107,001 | ||||||||
Net cash (debt) – cash net of debt, excluding lease liabilities reported under IFRS 16 Leases:
(in $000s CAD) | ||||||||
Cash | $ | 104,866 | $ | 94,432 | ||||
Contingent consideration | (8,505 | ) | (15,113 | ) | ||||
Long-term debt | - | (19,972 | ) | |||||
Net cash (debt) | $ | 96,361 | $ | 59,347 | ||||
Forward-Looking Statements
This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this news release that address future events, developments, or performance that the Company expects to occur (including management’s expectations regarding the Company’s objectives, strategies, financial condition, results of operations, cash flows and businesses) are forward-looking statements. Forward-looking statements are typically identified by future or conditional verbs such as “outlook”, “believe”, “anticipate”, “estimate”, “project”, “expect”, “intend”, “plan”, and terms and expressions of similar import. All forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management related to the factors set forth herein. While these factors and assumptions are considered reasonable by the Company as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information.
Such forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to: the level of activity in the mining industry and the demand for the Company’s services; competitive pressures; global and local political and economic environments and conditions; exposure to currency movements (which can affect the Company’s revenue in Canadian dollars); currency restrictions; the level of funding for the Company’s clients (particularly for junior mining companies); changes in jurisdictions in which the Company operates (including changes in regulation); efficient management of the Company’s growth; the integration of business acquisitions and the realization of the intended benefits of such acquisitions; safety of the Company’s workforce; risks and uncertainties relating to climate change and natural disaster; the Company’s dependence on key customers; the geographic distribution of the Company’s operations; the impact of operational changes; failure by counterparties to fulfill contractual obligations; disease outbreak; as well as other risk factors described under “General Risks and Uncertainties” in the Company’s MD&A for the year ended
Forward-looking statements made in this document are made as of the date of this document and the Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events, or for any other reasons, except as required by applicable securities laws.
About Major Drilling
Webcast/Conference Call Information
To participate in the conference call, please dial 416-340-2217, participant passcode 4513723# and ask for Major Drilling’s Third Quarter Results Conference Call. To ensure your participation, please call in approximately five minutes prior to the scheduled start of the call.
For those unable to participate, a taped rebroadcast will be available approximately one hour after the completion of the call until
For further information:
Tel: (506) 857-8636
Fax: (506) 857-9211
ir@majordrilling.com
Interim Condensed Consolidated Statements of Operations | ||||||||||||||||
(in thousands of Canadian dollars, except per share information) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
TOTAL REVENUE | $ | 132,824 | $ | 149,225 | $ | 538,659 | $ | 550,776 | ||||||||
DIRECT COSTS (note 9) | 113,938 | 122,787 | 418,403 | 420,161 | ||||||||||||
GROSS PROFIT | 18,886 | 26,438 | 120,256 | 130,615 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
General and administrative (note 9) | 17,146 | 16,425 | 51,258 | 48,667 | ||||||||||||
Other (revenue) expenses | 1,281 | 1,637 | 7,374 | 9,380 | ||||||||||||
(Gain) loss on disposal of property, plant and equipment | (114 | ) | (49 | ) | (611 | ) | (769 | ) | ||||||||
Foreign exchange (gain) loss | 2,320 | 265 | 4,862 | 2,036 | ||||||||||||
Finance (revenues) costs | (359 | ) | (620 | ) | (1,316 | ) | (164 | ) | ||||||||
20,274 | 17,658 | 61,567 | 59,150 | |||||||||||||
EARNINGS (LOSS) BEFORE INCOME TAX | (1,388 | ) | 8,780 | 58,689 | 71,465 | |||||||||||
INCOME TAX EXPENSE (RECOVERY) (note 10) | ||||||||||||||||
Current | (1,438 | ) | 3,065 | 12,491 | 17,330 | |||||||||||
Deferred | 2,362 | (558 | ) | 3,043 | 3 | |||||||||||
924 | 2,507 | 15,534 | 17,333 | |||||||||||||
NET EARNINGS (LOSS) | $ | (2,312 | ) | $ | 6,273 | $ | 43,155 | $ | 54,132 | |||||||
EARNINGS (LOSS) PER SHARE (note 11) | ||||||||||||||||
Basic | $ | (0.03 | ) | $ | 0.08 | $ | 0.52 | $ | 0.65 | |||||||
Diluted | $ | (0.03 | ) | $ | 0.08 | $ | 0.52 | $ | 0.65 | |||||||
Interim Condensed Consolidated Statements of Comprehensive Earnings | ||||||||||||||||
(in thousands of Canadian dollars) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
NET EARNINGS (LOSS) | $ | (2,312 | ) | $ | 6,273 | $ | 43,155 | $ | 54,132 | |||||||
OTHER COMPREHENSIVE EARNINGS | ||||||||||||||||
Items that may be reclassified subsequently to profit or loss | ||||||||||||||||
Unrealized gain (loss) on foreign currency translations | (10,017 | ) | 3,082 | (7,728 | ) | 15,069 | ||||||||||
Unrealized gain (loss) on derivatives (net of tax) | 381 | 1,849 | (438 | ) | 271 | |||||||||||
COMPREHENSIVE EARNINGS (LOSS) | $ | (11,948 | ) | $ | 11,204 | $ | 34,989 | $ | 69,472 | |||||||
Interim Condensed Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||
For the nine months ended | ||||||||||||||||||||||||
(in thousands of Canadian dollars) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Retained | Other | Share-based | Foreign currency | |||||||||||||||||||||
Share capital | earnings | reserves | payments reserve | translation reserve | Total | |||||||||||||||||||
BALANCE AS AT | $ | 263,183 | $ | 31,022 | $ | 1,536 | $ | 3,996 | $ | 60,021 | $ | 359,758 | ||||||||||||
Exercise of stock options | 2,591 | - | - | (723 | ) | - | 1,868 | |||||||||||||||||
Share-based compensation | - | - | - | 377 | - | 377 | ||||||||||||||||||
265,774 | 31,022 | 1,536 | 3,650 | 60,021 | 362,003 | |||||||||||||||||||
Comprehensive earnings: | ||||||||||||||||||||||||
Net earnings | - | 54,132 | - | - | - | 54,132 | ||||||||||||||||||
Unrealized gain (loss) on foreign currency translations | - | - | - | - | 15,069 | 15,069 | ||||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | 271 | - | - | 271 | ||||||||||||||||||
Total comprehensive earnings | - | 54,132 | 271 | - | 15,069 | 69,472 | ||||||||||||||||||
BALANCE AS AT | $ | 265,774 | $ | 85,154 | $ | 1,807 | $ | 3,650 | $ | 75,090 | $ | 431,475 | ||||||||||||
BALANCE AS AT | $ | 266,071 | $ | 105,944 | $ | (37 | ) | $ | 3,696 | $ | 76,903 | $ | 452,577 | |||||||||||
Exercise of stock options | 626 | (197 | ) | - | (300 | ) | - | 129 | ||||||||||||||||
Share-based compensation | - | - | - | 218 | - | 218 | ||||||||||||||||||
Share buyback (note 8) | (4,156 | ) | (7,093 | ) | - | - | - | (11,249 | ) | |||||||||||||||
Stock options expired/forfeited | - | 1 | - | (1 | ) | - | - | |||||||||||||||||
262,541 | 98,655 | (37 | ) | 3,613 | 76,903 | 441,675 | ||||||||||||||||||
Comprehensive earnings: | ||||||||||||||||||||||||
Net earnings | - | 43,155 | - | - | - | 43,155 | ||||||||||||||||||
Unrealized gain (loss) on foreign currency translations | - | - | - | - | (7,728 | ) | (7,728 | ) | ||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | (438 | ) | - | - | (438 | ) | ||||||||||||||||
Total comprehensive earnings | - | 43,155 | (438 | ) | - | (7,728 | ) | 34,989 | ||||||||||||||||
BALANCE AS AT | $ | 262,541 | $ | 141,810 | $ | (475 | ) | $ | 3,613 | $ | 69,175 | $ | 476,664 | |||||||||||
Interim Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
(in thousands of Canadian dollars) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Earnings (loss) before income tax | $ | (1,388 | ) | $ | 8,780 | $ | 58,689 | $ | 71,465 | |||||||
Operating items not involving cash | ||||||||||||||||
Depreciation and amortization (note 9) | 13,097 | 12,330 | 37,866 | 35,700 | ||||||||||||
(Gain) loss on disposal of property, plant and equipment | (114 | ) | (49 | ) | (611 | ) | (769 | ) | ||||||||
Share-based compensation | 59 | 134 | 218 | 377 | ||||||||||||
Finance (revenues) costs recognized in earnings before income tax | (359 | ) | (620 | ) | (1,316 | ) | (164 | ) | ||||||||
11,295 | 20,575 | 94,846 | 106,609 | |||||||||||||
Changes in non-cash operating working capital items | 27,735 | 26,013 | 18,343 | 22,861 | ||||||||||||
Finance revenues received (costs paid) | 359 | 620 | 1,316 | 164 | ||||||||||||
Income taxes paid | (609 | ) | (7,319 | ) | (10,621 | ) | (16,990 | ) | ||||||||
Cash flow from (used in) operating activities | 38,780 | 39,889 | 103,884 | 112,644 | ||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Repayment of lease liabilities | (351 | ) | (568 | ) | (1,082 | ) | (1,404 | ) | ||||||||
Repayment of long-term debt (note 7) | - | (10,000 | ) | (20,000 | ) | (30,000 | ) | |||||||||
Issuance of common shares due to exercise of stock options | 15 | 804 | 455 | 1,868 | ||||||||||||
Cash-settled stock options | - | - | (326 | ) | - | |||||||||||
Repurchase of common shares (note 8) | (2,682 | ) | - | (11,249 | ) | - | ||||||||||
Cash flow from (used in) financing activities | (3,018 | ) | (9,764 | ) | (32,202 | ) | (29,536 | ) | ||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Payment of consideration for previous business acquisition | - | (2,500 | ) | (6,991 | ) | (8,789 | ) | |||||||||
Acquisition of property, plant and equipment (note 6) | (21,356 | ) | (15,592 | ) | (55,073 | ) | (42,080 | ) | ||||||||
Proceeds from disposal of property, plant and equipment | 182 | 463 | 1,826 | 3,302 | ||||||||||||
Cash flow from (used in) investing activities | (21,174 | ) | (17,629 | ) | (60,238 | ) | (47,567 | ) | ||||||||
Effect of exchange rate changes | (2,189 | ) | (630 | ) | (1,010 | ) | 2,763 | |||||||||
INCREASE (DECREASE) IN CASH | 12,399 | 11,866 | 10,434 | 38,304 | ||||||||||||
CASH, BEGINNING OF THE PERIOD | 92,467 | 97,968 | 94,432 | 71,260 | ||||||||||||
CASH, END OF THE PERIOD | $ | 104,866 | $ | 109,564 | $ | 104,866 | $ | 109,564 | ||||||||
Interim Condensed Consolidated Balance Sheets | ||||||||
As at | ||||||||
(in thousands of Canadian dollars) | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 104,866 | $ | 94,432 | ||||
Trade and other receivables (note 13) | 84,525 | 137,633 | ||||||
Income tax receivable | 3,376 | 2,336 | ||||||
Inventories | 112,632 | 115,128 | ||||||
Prepaid expenses | 11,388 | 10,996 | ||||||
316,787 | 360,525 | |||||||
PROPERTY, PLANT AND EQUIPMENT (note 6) | 229,198 | 215,085 | ||||||
RIGHT-OF-USE ASSETS | 4,999 | 5,637 | ||||||
DEFERRED INCOME TAX ASSETS | 2,640 | 4,444 | ||||||
22,375 | 22,690 | |||||||
INTANGIBLE ASSETS | 2,448 | 3,304 | ||||||
$ | 578,447 | $ | 611,685 | |||||
LIABILITIES | ||||||||
CURRENT LIABILITIES | ||||||||
Trade and other payables | $ | 68,042 | $ | 102,144 | ||||
Income tax payable | 6,597 | 3,674 | ||||||
Current portion of lease liabilities | 1,323 | 1,617 | ||||||
Current portion of contingent consideration | 8,505 | 7,138 | ||||||
84,467 | 114,573 | |||||||
LEASE LIABILITIES | 3,681 | 3,965 | ||||||
CONTINGENT CONSIDERATION | - | 7,975 | ||||||
LONG-TERM DEBT (note 7) | - | 19,972 | ||||||
DEFERRED INCOME TAX LIABILITIES | 13,635 | 12,623 | ||||||
101,783 | 159,108 | |||||||
SHAREHOLDERS' EQUITY | ||||||||
Share capital | 262,541 | 266,071 | ||||||
Retained earnings | 141,810 | 105,944 | ||||||
Other reserves | (475 | ) | (37 | ) | ||||
Share-based payments reserve | 3,613 | 3,696 | ||||||
Foreign currency translation reserve | 69,175 | 76,903 | ||||||
476,664 | 452,577 | |||||||
$ | 578,447 | $ | 611,685 | |||||
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
(in thousands of Canadian dollars, except per share information)
1. NATURE OF ACTIVITIES
2. BASIS OF PRESENTATION
Statement of compliance
These Interim Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting (“IAS 34”) as issued by the
On
Basis of consolidation
These Interim Condensed Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statements of Operations from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Intercompany transactions, balances, income and expenses are eliminated on consolidation, where appropriate.
Basis of preparation
These Interim Condensed Consolidated Financial Statements have been prepared based on the historical cost basis, except for certain financial instruments that are measured at fair value, using the same accounting policies and methods of computation as presented in the Company’s annual Consolidated Financial Statements for the year ended
3. APPLICATION OF NEW AND REVISED IFRS
The Company has not applied the following IASB standard amendment that has been issued, but is not yet effective:
- IAS 21 (as amended in 2023) - The Effect of Changes in Foreign Exchange Rates - effective for periods beginning on or after
January 1, 2025 , with earlier application permitted. The amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.
The Company is currently in the process of assessing the impact the adoption of the above amendment will have on the Consolidated Financial Statements.
4. KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGMENTS
The preparation of financial statements, in conformity with International Financial Reporting Standards (“IFRS”), requires management to make judgments, estimates and assumptions that are not readily apparent from other sources, which affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Significant areas requiring the use of management estimates relate to the useful lives of property, plant and equipment for depreciation purposes, property, plant and equipment and inventory valuation, determination of income and other taxes, assumptions used in the compilation of fair value of assets acquired and liabilities assumed in business acquisitions, amounts recorded as accrued liabilities, contingent consideration, allowance for impairment of trade receivables, and impairment testing of goodwill and intangible assets.
The Company applied judgment in determining the functional currency of the Company and its subsidiaries, the determination of cash-generating units (“CGUs”), the degree of componentization of property, plant and equipment, the recognition of provisions and accrued liabilities, and the determination of the probability that deferred income tax assets will be realized from future taxable earnings.
5. SEASONALITY OF OPERATIONS
The third quarter (November to January) is normally the Company’s weakest quarter due to the shutdown of mining and exploration activities, often for extended periods over the holiday season.
6. PROPERTY, PLANT AND EQUIPMENT
Capital expenditures for the three and nine months ended
7. LONG-TERM DEBT
During the year the Company made a discretionary payment of
8. SHARE BUYBACK
Early in the current fiscal year, the Company initiated its Normal Course Issuer Bid ("NCIB"), ending
9. EXPENSES BY NATURE
Direct costs by nature are as follows:
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Depreciation | $ | 12,251 | $ | 11,300 | $ | 35,042 | $ | 32,891 | ||||||||
Employee salaries and benefit expenses | 51,385 | 56,307 | 190,099 | 190,385 | ||||||||||||
Materials, consumables and external costs | 43,283 | 46,951 | 167,526 | 166,576 | ||||||||||||
Other | 7,019 | 8,229 | 25,736 | 30,309 | ||||||||||||
$ | 113,938 | $ | 122,787 | $ | 418,403 | $ | 420,161 | |||||||||
General and administrative expenses by nature are as follows:
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Amortization of intangible assets | $ | 266 | $ | 366 | $ | 791 | $ | 1,086 | ||||||||
Depreciation | 580 | 664 | 2,033 | 1,723 | ||||||||||||
Employee salaries and benefit expenses | 8,966 | 8,241 | 26,892 | 25,071 | ||||||||||||
Other general and administrative expenses | 7,334 | 7,154 | 21,542 | 20,787 | ||||||||||||
$ | 17,146 | $ | 16,425 | $ | 51,258 | $ | 48,667 | |||||||||
10. INCOME TAXES
The income tax provision for the periods can be reconciled to accounting earnings before income tax as follows:
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Earnings (loss) before income tax | $ | (1,388 | ) | $ | 8,780 | $ | 58,689 | $ | 71,465 | |||||||
Statutory Canadian corporate income tax rate | 27 | % | 27 | % | 27 | % | 27 | % | ||||||||
Expected income tax provision based on statutory rate | (375 | ) | 2,371 | 15,846 | 19,296 | |||||||||||
Non-recognition of tax benefits related to losses | 643 | 303 | 1,179 | 950 | ||||||||||||
Utilization of previously unrecognized losses | 387 | (601 | ) | (2,587 | ) | (5,449 | ) | |||||||||
Other foreign taxes paid | 123 | 133 | 415 | 2,088 | ||||||||||||
Rate variances in foreign jurisdictions | (427 | ) | (414 | ) | (308 | ) | (376 | ) | ||||||||
Permanent differences and other | 573 | 715 | 989 | 824 | ||||||||||||
Income tax provision recognized in net earnings | $ | 924 | $ | 2,507 | $ | 15,534 | $ | 17,333 | ||||||||
The Company periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information available. For those matters where it is probable that an adjustment will be made, the Company records its best estimate of these tax liabilities, including related interest charges. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax laws. While management believes they have adequately provided for the probable outcome of these matters, future results may include favourable or unfavourable adjustments to these estimated tax liabilities in the period the assessments are made, or resolved, or when the statutes of limitations lapse.
11. EARNINGS PER SHARE
All of the Company’s earnings are attributable to common shares, therefore, net earnings are used in determining earnings per share.
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Net earnings (loss) | $ | (2,312 | ) | $ | 6,273 | $ | 43,155 | $ | 54,132 | |||||||
Weighted average number of shares: | ||||||||||||||||
Basic (000s) | 81,923 | 82,914 | 82,522 | 82,834 | ||||||||||||
Diluted (000s) | 82,082 | 83,275 | 82,727 | 83,195 | ||||||||||||
Earnings (loss) per share | ||||||||||||||||
Basic | $ | (0.03 | ) | $ | 0.08 | $ | 0.52 | $ | 0.65 | |||||||
Diluted | $ | (0.03 | ) | $ | 0.08 | $ | 0.52 | $ | 0.65 | |||||||
The calculation of diluted earnings per share for the three and nine months ended
The total number of shares outstanding on
12. SEGMENTED INFORMATION
The Company’s operations are divided into the following three geographic segments, corresponding to its management structure:
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Revenue | ||||||||||||||||
$ | 62,252 | $ | 79,614 | $ | 270,392 | $ | 305,280 | |||||||||
South and | 34,019 | 32,527 | 138,124 | 121,705 | ||||||||||||
36,553 | 37,084 | 130,143 | 123,791 | |||||||||||||
$ | 132,824 | $ | 149,225 | $ | 538,659 | $ | 550,776 | |||||||||
*
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Earnings from operations | ||||||||||||||||
$ | 369 | $ | 6,431 | $ | 30,183 | $ | 52,207 | |||||||||
South and | (2,345 | ) | 1,274 | 17,031 | 15,562 | |||||||||||
2,663 | 3,762 | 20,806 | 14,773 | |||||||||||||
687 | 11,467 | 68,020 | 82,542 | |||||||||||||
Finance (revenues) costs | (359 | ) | (620 | ) | (1,316 | ) | (164 | ) | ||||||||
General and corporate expenses** | 2,434 | 3,307 | 10,647 | 11,241 | ||||||||||||
Income tax | 924 | 2,507 | 15,534 | 17,333 | ||||||||||||
2,999 | 5,194 | 24,865 | 28,410 | |||||||||||||
Net earnings (loss) | $ | (2,312 | ) | $ | 6,273 | $ | 43,155 | $ | 54,132 | |||||||
**General and corporate expenses include expenses for corporate offices and stock-based compensation.
Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | |||||||||||||
Capital expenditures | ||||||||||||||||
$ | 9,061 | $ | 8,996 | $ | 23,895 | $ | 26,842 | |||||||||
South and | 6,995 | 4,766 | 17,881 | 10,159 | ||||||||||||
5,300 | 1,830 | 13,228 | 4,814 | |||||||||||||
Unallocated and corporate assets | - | - | 69 | 265 | ||||||||||||
Total capital expenditures | $ | 21,356 | $ | 15,592 | $ | 55,073 | $ | 42,080 | ||||||||
Depreciation and amortization | ||||||||||||||||
$ | 5,827 | $ | 6,031 | $ | 17,618 | $ | 17,552 | |||||||||
South and | 3,015 | 2,856 | 8,544 | 8,019 | ||||||||||||
3,973 | 3,232 | 11,082 | 9,634 | |||||||||||||
Unallocated and corporate assets | 282 | 211 | 622 | 495 | ||||||||||||
Total depreciation and amortization | $ | 13,097 | $ | 12,330 | $ | 37,866 | $ | 35,700 | ||||||||
Identifiable assets | ||||||||
$ | 271,202 | $ | 283,895 | |||||
South and | 155,657 | 154,384 | ||||||
191,745 | 193,739 | |||||||
Unallocated and corporate liabilities | (40,157 | ) | (20,333 | ) | ||||
Total identifiable assets | $ | 578,447 | $ | 611,685 |
*
13. FINANCIAL INSTRUMENTS
Fair value
The carrying values of cash, trade and other receivables, demand credit facilities and trade and other payables approximate their fair value due to the relatively short period to maturity of the instruments. The carrying value of contingent consideration and long-term debt approximates their fair value as the interest applicable is reflective of fair market rates.
Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories:
- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 - inputs other than quoted prices included in level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
- Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Company enters into certain derivative financial instruments to manage its exposure to interest rate and market risks, comprised of share-price forward contracts with a combined notional amount of
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.
The Company’s derivatives, with fair values as follows, are classified as level 2 financial instruments and recorded in trade and other receivables (payables) in the Consolidated Balance Sheets. There were no transfers of amounts between level 1, level 2 and level 3 financial instruments for the three and nine months ended
Interest rate swap | $ | - | $ | 28 | ||||
Share-price forward contracts | $ | (1,385 | ) | $ | 2,189 | |||
Credit risk
As at
The movements in the allowance for impairment of trade receivables during the nine and twelve-month periods were as follows:
Opening balance | $ | 3,303 | $ | 1,517 | ||||
Increase in impairment allowance | 1,318 | 2,620 | ||||||
Recovery of amounts previously impaired | (478 | ) | (51 | ) | ||||
Write-off charged against allowance | - | (824 | ) | |||||
Foreign exchange translation differences | (101 | ) | 41 | |||||
Ending balance | $ | 4,042 | $ | 3,303 | ||||
Foreign currency risk
As at
Rate variance | IDR/USD | MNT/USD | MXN/USD | ARS/USD | USD/CLP | USD/CAD | Other | ||||||||||||
Net exposure on monetary assets (liabilities) | 7,911 | 7,688 | 5,228 | 3,138 | (8,404 | ) | (13,136 | ) | 51 | ||||||||||
EBIT impact | +/-10% | 879 | 854 | 581 | 349 | 934 | 1,460 | 6 | |||||||||||
Liquidity risk
The following table details contractual maturities for the Company’s financial liabilities:
1 year | 2-3 years | 4-5 years | Thereafter | Total | ||||||||||||||||
Trade and other payables | $ | 68,042 | $ | - | $ | - | $ | - | $ | 68,042 | ||||||||||
Lease liabilities (interest included) | 1,621 | 2,512 | 1,311 | 188 | 5,632 | |||||||||||||||
Contingent consideration (undiscounted) | 8,816 | - | - | - | 8,816 | |||||||||||||||
$ | 78,479 | $ | 2,512 | $ | 1,311 | $ | 188 | $ | 82,490 |
Source:
2024 GlobeNewswire, Inc., source