Quarterly Highlights
- Revenue of
$198.9 million , flat compared to the same period last year, however an increase of 7.5% from revenue reported in Q4 of fiscal 2023. - EBITDA(1) of
$40.3 million (or$0.48 per share), down from$43.5 million for the same period last year. - Net earnings of
$21.8 million (or$0.26 per share), down from$24.2 million for the same period last year. - Discretionary repayment of
$20 million on long-term debt, bringing long-term debt to nil. - Spent
$1.3 million in share buybacks. - Net cash(1) increased during the quarter to
$60.8 million .
“We continued to see steady growth every month of the quarter, with increased activity from copper, lithium, silver and nickel customers, offsetting the reduced demands of junior gold exploration companies,” commented Mr.
“The Company delivered solid financial performance in the quarter, generating
“Looking forward, the global demand for electric vehicles continues to grow and will require an enormous volume of copper and battery metals, which will increase pressure on the existing supply/demand dynamic. We expect all of this to lead to substantial additional investments in copper and other base metal exploration projects as we help our customers discover the metals that will allow the world to accelerate its efforts toward a green economy. Many of the new mineral deposits in question are located in areas challenging to access, requiring complex drilling solutions, and continued demand for Major Drilling’s specialized services."
“Major Drilling remains in a unique position to react to, and benefit from these market dynamics. Backed by our strong financial position, our success in recruiting, training, and inventory management has allowed us to maintain our position as both the operator and employer of choice in our industry,” concluded
In millions of Canadian dollars (except earnings per share) | Q1 2024 | Q1 2023 | ||||||
Revenue | $ | 198.9 | $ | 199.8 | ||||
Gross margin | 24.6 | % | 25.6 | % | ||||
Adjusted gross margin (1) | 30.1 | % | 30.8 | % | ||||
EBITDA (1) | 40.3 | 43.5 | ||||||
As percentage of revenue | 20.2 | % | 21.8 | % | ||||
Net earnings | 21.8 | 24.2 | ||||||
Earnings per share | 0.26 | 0.29 |
(1) See “Non-IFRS Financial Measures”
First Quarter Ended
Total revenue for the quarter was
Revenue for the quarter from
South and Central American revenue increased by 8.6% to
Australasian and African revenue increased by 15.1% to
Gross margin percentage for the quarter was 24.6%, compared to 25.6% 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 earnings were
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) | Q1 2024 | Q1 2023 | |||||||
Total revenue | $ | 198,884 | $ | 199,835 | |||||
Less: direct costs | 149,875 | 148,661 | |||||||
Gross profit | 49,009 | 51,174 | |||||||
Add: depreciation | 10,951 | 10,414 | |||||||
Adjusted gross profit | 59,960 | 61,588 | |||||||
Adjusted gross margin | 30.1 | % | 30.8 | % | |||||
EBITDA - earnings before interest, taxes, depreciation, and amortization:
(in $000s CAD) | Q1 2024 | Q1 2023 | |||||||
Net earnings | $ | 21,773 | $ | 24,248 | |||||
Finance (revenues) costs | (682 | ) | 430 | ||||||
Income tax provision | 7,176 | 7,285 | |||||||
Depreciation and amortization | 11,989 | 11,541 | |||||||
EBITDA | $ | 40,256 | $ | 43,504 | |||||
Net cash (debt) – cash net of debt, excluding lease liabilities reported under IFRS 16 Leases:
(in $000s CAD) | |||||||||
Cash | $ | 75,917 | $ | 94,432 | |||||
Contingent consideration | (15,132 | ) | (15,113 | ) | |||||
Long-term debt | - | (19,972 | ) | ||||||
Net cash (debt) | $ | 60,785 | $ | 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; the level of funding for the Company’s clients (particularly for junior mining companies); exposure to currency movements (which can affect the Company’s revenue in Canadian dollars); the integration of business acquisitions and the realization of the intended benefits of such acquisitions; efficient management of the Company’s growth; currency restrictions; 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; changes in jurisdictions in which the Company operates (including changes in regulation); 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 8876233# and ask for Major Drilling’s First 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 | |||||||||
2023 | 2022 | ||||||||
TOTAL REVENUE | $ | 198,884 | $ | 199,835 | |||||
DIRECT COSTS (note 8) | 149,875 | 148,661 | |||||||
GROSS PROFIT | 49,009 | 51,174 | |||||||
OPERATING EXPENSES | |||||||||
General and administrative (note 8) | 16,510 | 16,174 | |||||||
Other (revenue) expenses | 2,871 | 3,020 | |||||||
(Gain) loss on disposal of property, plant and equipment | (237 | ) | (698 | ) | |||||
Foreign exchange (gain) loss | 1,598 | 715 | |||||||
Finance (revenues) costs | (682 | ) | 430 | ||||||
20,060 | 19,641 | ||||||||
EARNINGS BEFORE INCOME TAX | 28,949 | 31,533 | |||||||
INCOME TAX EXPENSE (RECOVERY) (note 9) | |||||||||
Current | 6,643 | 7,701 | |||||||
Deferred | 533 | (416 | ) | ||||||
7,176 | 7,285 | ||||||||
NET EARNINGS | $ | 21,773 | $ | 24,248 | |||||
EARNINGS PER SHARE (note 10) | |||||||||
Basic | $ | 0.26 | $ | 0.29 | |||||
Diluted | $ | 0.26 | $ | 0.29 | |||||
Interim Condensed Consolidated Statements of Comprehensive Earnings | ||||||||
(in thousands of Canadian dollars) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
2023 | 2022 | |||||||
NET EARNINGS | $ | 21,773 | $ | 24,248 | ||||
OTHER COMPREHENSIVE EARNINGS | ||||||||
Items that may be reclassified subsequently to profit or loss | ||||||||
Unrealized gain (loss) on foreign currency translations | (8,299 | ) | (3,092 | ) | ||||
Unrealized gain (loss) on derivatives (net of tax) | 22 | (1,632 | ) | |||||
COMPREHENSIVE EARNINGS | $ | 13,496 | $ | 19,524 | ||||
Interim Condensed Consolidated Statements of Changes in Equity | ||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||
(in thousands of Canadian dollars) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Retained | ||||||||||||||||||||||||
earnings | Other | Share-based | Foreign currency | |||||||||||||||||||||
Share capital | (deficit) | 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 | 761 | - | - | (267 | ) | - | 494 | |||||||||||||||||
Share-based compensation | - | - | - | 112 | - | 112 | ||||||||||||||||||
263,944 | 31,022 | 1,536 | 3,841 | 60,021 | 360,364 | |||||||||||||||||||
Comprehensive earnings: | ||||||||||||||||||||||||
Net earnings | - | 24,248 | - | - | - | 24,248 | ||||||||||||||||||
Unrealized gain (loss) on foreign | ||||||||||||||||||||||||
currency translations | - | - | - | - | (3,092 | ) | (3,092 | ) | ||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | (1,632 | ) | - | - | (1,632 | ) | ||||||||||||||||
Total comprehensive earnings | - | 24,248 | (1,632 | ) | - | (3,092 | ) | 19,524 | ||||||||||||||||
BALANCE AS AT | 263,944 | 55,270 | (96 | ) | 3,841 | 56,929 | 379,888 | |||||||||||||||||
BALANCE AS AT | $ | 266,071 | $ | 105,944 | $ | (37 | ) | $ | 3,696 | $ | 76,903 | $ | 452,577 | |||||||||||
Exercise of stock options | 529 | - | - | (146 | ) | - | 383 | |||||||||||||||||
Share-based compensation | - | - | - | 101 | - | 101 | ||||||||||||||||||
Share buyback (note 7) | (451 | ) | (840 | ) | - | - | - | (1,291 | ) | |||||||||||||||
Stock options expired/forfeited | - | 1 | - | (1 | ) | - | - | |||||||||||||||||
266,149 | 105,105 | (37 | ) | 3,650 | 76,903 | 451,770 | ||||||||||||||||||
Comprehensive earnings: | ||||||||||||||||||||||||
Net earnings | - | 21,773 | - | - | - | 21,773 | ||||||||||||||||||
Unrealized gain (loss) on foreign | ||||||||||||||||||||||||
currency translations | - | - | - | - | (8,299 | ) | (8,299 | ) | ||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | 22 | - | - | 22 | ||||||||||||||||||
Total comprehensive earnings | - | 21,773 | 22 | - | (8,299 | ) | 13,496 | |||||||||||||||||
BALANCE AS AT | $ | 266,149 | $ | 126,878 | $ | (15 | ) | $ | 3,650 | $ | 68,604 | $ | 465,266 | |||||||||||
Interim Condensed Consolidated Statements of Cash Flows | ||||||||
(in thousands of Canadian dollars) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
2023 | 2022 | |||||||
OPERATING ACTIVITIES | ||||||||
Earnings before income tax | $ | 28,949 | $ | 31,533 | ||||
Operating items not involving cash | ||||||||
Depreciation and amortization (note 8) | 11,989 | 11,541 | ||||||
(Gain) loss on disposal of property, plant and equipment | (237 | ) | (698 | ) | ||||
Share-based compensation | 101 | 112 | ||||||
Finance (revenues) costs recognized in earnings before income tax | (682 | ) | 430 | |||||
40,120 | 42,918 | |||||||
Changes in non-cash operating working capital items | (16,124 | ) | (16,468 | ) | ||||
Finance revenues received (costs paid) | 682 | (430 | ) | |||||
Income taxes paid | (4,965 | ) | (5,350 | ) | ||||
Cash flow from (used in) operating activities | 19,713 | 20,670 | ||||||
FINANCING ACTIVITIES | ||||||||
Repayment of lease liabilities | (319 | ) | (444 | ) | ||||
Repayment of long-term debt (note 6) | (20,000 | ) | (20,000 | ) | ||||
Issuance of common shares due to exercise of stock options | 383 | 494 | ||||||
Repurchase of common shares (note 7) | (1,291 | ) | - | |||||
Cash flow from (used in) financing activities | (21,227 | ) | (19,950 | ) | ||||
INVESTING ACTIVITIES | ||||||||
Acquisition of property, plant and equipment (note 5) | (16,274 | ) | (13,154 | ) | ||||
Proceeds from disposal of property, plant and equipment | 293 | 2,291 | ||||||
Cash flow from (used in) investing activities | (15,981 | ) | (10,863 | ) | ||||
Effect of exchange rate changes | (1,020 | ) | 1 | |||||
INCREASE (DECREASE) IN CASH | (18,515 | ) | (10,142 | ) | ||||
CASH, BEGINNING OF THE PERIOD | 94,432 | 71,260 | ||||||
CASH, END OF THE PERIOD | $ | 75,917 | $ | 61,118 | ||||
Interim Condensed Consolidated Balance Sheets | ||||||||
As at | ||||||||
(in thousands of Canadian dollars) | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 75,917 | $ | 94,432 | ||||
Trade and other receivables (note 12) | 133,986 | 137,633 | ||||||
Income tax receivable | 2,027 | 2,336 | ||||||
Inventories | 116,063 | 115,128 | ||||||
Prepaid expenses | 13,066 | 10,996 | ||||||
341,059 | 360,525 | |||||||
PROPERTY, PLANT AND EQUIPMENT (note 5) | 217,450 | 215,085 | ||||||
RIGHT-OF-USE ASSETS | 4,633 | 5,637 | ||||||
DEFERRED INCOME TAX ASSETS | 3,602 | 4,444 | ||||||
22,403 | 22,690 | |||||||
INTANGIBLE ASSETS | 2,978 | 3,304 | ||||||
$ | 592,125 | $ | 611,685 | |||||
LIABILITIES | ||||||||
CURRENT LIABILITIES | ||||||||
Trade and other payables | $ | 88,741 | $ | 102,144 | ||||
Income tax payable | 5,085 | 3,674 | ||||||
Current portion of lease liabilities | 1,556 | 1,617 | ||||||
Current portion of contingent consideration | 7,066 | 7,138 | ||||||
102,448 | 114,573 | |||||||
LEASE LIABILITIES | 4,241 | 3,965 | ||||||
CONTINGENT CONSIDERATION | 8,066 | 7,975 | ||||||
LONG-TERM DEBT | - | 19,972 | ||||||
DEFERRED INCOME TAX LIABILITIES | 12,104 | 12,623 | ||||||
126,859 | 159,108 | |||||||
SHAREHOLDERS' EQUITY | ||||||||
Share capital | 266,149 | 266,071 | ||||||
Retained earnings | 126,878 | 105,944 | ||||||
Other reserves | (15 | ) | (37 | ) | ||||
Share-based payments reserve | 3,650 | 3,696 | ||||||
Foreign currency translation reserve | 68,604 | 76,903 | ||||||
465,266 | 452,577 | |||||||
$ | 592,125 | $ | 611,685 | |||||
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE 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. 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.
4. 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.
5. PROPERTY, PLANT AND EQUIPMENT
Capital expenditures for the three months ended
6. LONG-TERM DEBT
During the quarter, the Company made a discretionary payment of
7. SHARE BUYBACK
During the quarter, the Company initiated its Normal Course Issuer Bid ("NCIB") and repurchased 145,300 common shares at an average price of
8. EXPENSES BY NATURE
Direct costs by nature are as follows:
Q1 2024 | Q1 2023 | ||||||||
Depreciation | $ | 10,951 | $ | 10,414 | |||||
Employee salaries and benefit expenses | 68,353 | 65,992 | |||||||
Materials, consumables and external costs | 61,066 | 61,156 | |||||||
Other | 9,505 | 11,099 | |||||||
$ | 149,875 | $ | 148,661 | ||||||
General and administrative expenses by nature are as follows:
Q1 2024 | Q1 2023 | ||||||||
Amortization of intangible assets | $ | 266 | $ | 362 | |||||
Depreciation | 772 | 765 | |||||||
Employee salaries and benefit expenses | 8,923 | 8,665 | |||||||
Other general and administrative expenses | 6,549 | 6,382 | |||||||
$ | 16,510 | $ | 16,174 | ||||||
9. INCOME TAXES
The income tax provision for the period can be reconciled to accounting earnings before income tax as follows:
Q1 2024 | Q1 2023 | |||||||
Earnings before income tax | $ | 28,949 | $ | 31,533 | ||||
Statutory Canadian corporate income tax rate | 27 | % | 27 | % | ||||
Expected income tax provision based on statutory rate | 7,816 | 8,514 | ||||||
Non-recognition of tax benefits related to losses | 638 | 156 | ||||||
Utilization of previously unrecognized losses | (1,364 | ) | (1,945 | ) | ||||
Other foreign taxes paid | 146 | 1,006 | ||||||
Rate variances in foreign jurisdictions | 122 | 102 | ||||||
Permanent differences and other | (182 | ) | (548 | ) | ||||
Income tax provision recognized in net earnings | $ | 7,176 | $ | 7,285 | ||||
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.
10. EARNINGS PER SHARE
All of the Company’s earnings are attributable to common shares, therefore, net earnings are used in determining earnings per share.
Q1 2024 | Q1 2023 | |||||||
Net earnings | $ | 21,773 | $ | 24,248 | ||||
Weighted average number of shares: | ||||||||
Basic (000s) | 83,026 | 82,739 | ||||||
Diluted (000s) | 83,303 | 83,151 | ||||||
Earnings per share | ||||||||
Basic | $ | 0.26 | $ | 0.29 | ||||
Diluted | $ | 0.26 | $ | 0.29 | ||||
The calculation of diluted earnings per share for the three months ended
The total number of shares outstanding on
11. SEGMENTED INFORMATION
The Company’s operations are divided into the following three geographic segments, corresponding to its management structure:
Q1 2024 | Q1 2023 | |||||||
Revenue | ||||||||
$ | 101,452 | $ | 112,600 | |||||
South and | 51,638 | 47,453 | ||||||
45,794 | 39,782 | |||||||
$ | 198,884 | $ | 199,835 |
*
Q1 2024 | Q1 2023 | |||||||
Earnings from operations | ||||||||
$ | 14,885 | $ | 23,752 | |||||
South and | 9,990 | 9,053 | ||||||
7,887 | 3,164 | |||||||
32,762 | 35,969 | |||||||
Finance (revenues) costs | (682 | ) | 430 | |||||
General and corporate expenses** | 4,495 | 4,006 | ||||||
Income tax | 7,176 | 7,285 | ||||||
10,989 | 11,721 | |||||||
Net earnings | $ | 21,773 | $ | 24,248 |
**General and corporate expenses include expenses for corporate offices and stock-based compensation.
Q1 2024 | Q1 2023 | |||||||
Capital expenditures | ||||||||
$ | 9,011 | $ | 8,406 | |||||
South and | 4,069 | 3,331 | ||||||
3,125 | 1,152 | |||||||
Unallocated and corporate assets | 69 | 265 | ||||||
Total capital expenditures | $ | 16,274 | $ | 13,154 |
Depreciation and amortization | ||||||||
$ | 5,916 | $ | 5,395 | |||||
South and | 2,567 | 2,513 | ||||||
3,314 | 3,413 | |||||||
Unallocated and corporate assets | 192 | 220 | ||||||
Total depreciation and amortization | $ | 11,989 | $ | 11,541 |
Identifiable assets | ||||||||
$ | 278,989 | $ | 283,895 | |||||
South and | 161,542 | 154,384 | ||||||
189,134 | 193,739 | |||||||
Unallocated and corporate liabilities | (37,540 | ) | (20,333 | ) | ||||
Total identifiable assets | $ | 592,125 | $ | 611,685 |
*
12. 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. There were no transfers of amounts between level 1, level 2 and level 3 financial instruments for the quarter ended
Interest rate swap | $ | - | $ | 28 | ||||
Share-price forward contracts | $ | (344 | ) | $ | 2,189 | |||
Credit risk
As at
The movements in the allowance for impairment of trade receivables during the three and twelve-month periods were as follows:
Opening balance | $ | 3,303 | $ | 1,517 | ||||
Increase in impairment allowance | 282 | 2,620 | ||||||
Recovery of amounts previously impaired | (115 | ) | (51 | ) | ||||
Write-off charged against allowance | - | (824 | ) | |||||
Foreign exchange translation differences | (22 | ) | 41 | |||||
Ending balance | $ | 3,448 | $ | 3,303 | ||||
Foreign currency risk
As at
Rate variance | USD/CAD | IDR/USD | MNT/USD | ARS/USD | MXN/USD | USD/CLP | Other | |||||||||||
Net exposure on monetary assets (liabilities) | 8,491 | 7,954 | 6,704 | 1,926 | 1,831 | (5,092 | ) | 899 | ||||||||||
EBIT impact | +/-10% | 943 | 884 | 745 | 214 | 203 | 566 | 100 | ||||||||||
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 | $ | 88,741 | $ | - | $ | - | $ | - | $ | 88,741 | ||||||||||
Lease liabilities (interest included) | 1,850 | 2,860 | 1,650 | 337 | 6,697 | |||||||||||||||
Contingent consideration (undiscounted) | 7,066 | 8,832 | - | - | 15,898 | |||||||||||||||
$ | 97,657 | $ | 11,692 | $ | 1,650 | $ | 337 | $ | 111,336 |
Source:
2023 GlobeNewswire, Inc., source