Orbit Garant Drilling Inc. (TSX: OGD) Q4 2025 Earnings Call | 09/25/2025

Financial Highlights

Q4 Fiscal 2025

• Revenue: $47.2 million, up 3.9% from $45.3 million in Q4 2024.

  • Canada: $33.8 million, up 2.7% from $32.8 million, driven by higher revenue per meter drilled.

  • International (South America): $13.4 million, up 7.0% from $12.5 million, due to increased drilling activity.

• Gross Profit: $7.6 million (16.0% of revenue) vs. $7.5 million (16.6% of revenue) in Q4 2024.

• Adjusted Gross Margin (excluding depreciation and gain on disposal): 20.2% vs. 17.8% in Q4 2024, driven by higher revenue per meter in Canada, increased South American activity, and exit from unprofitable West African operations in Q2 2024.

• Adjusted EBITDA: $5.5 million, down from $6.7 million in Q4 2024, due to unfavorable foreign exchange variance and South American project startup costs, partially offset by higher Canadian earnings.

• Net Earnings: $2.2 million ($0.06 per share, diluted) vs. a net loss of $2.3 million ($0.06 per share, diluted) in Q4 2024, driven by West Africa exit-related adjustments (receivable modification, expected credit loss, and translation adjustments), offset by slightly lower operating earnings, reduced tax recovery, and unfavorable foreign exchange.

Fiscal Year 2025

• Revenue: $189 million, up 4.3% from $181.2 million in FY 2024.

  • Canada: $136.1 million, up 2.6%, due to higher revenue per meter drilled.

  • International (South America): $53.7 million, up 9.0%, driven by increased drilling activity.

• Gross Profit: $28.3 million (15.0% of revenue) vs. $21.2 million (11.7% of revenue) in FY 2024.

• Adjusted Gross Margin (excluding depreciation and gain on disposal): 19.5% vs. 15.9% in FY 2024, due to higher revenue per meter in Canada, South American growth, and West Africa exit.

• Adjusted EBITDA: $21.7 million vs. $14.7 million in FY 2024, reflecting higher operating earnings and favorable foreign exchange.

• Net Earnings: $7.5 million ($0.20 per share, diluted) vs. a net loss of $2.4 million ($0.06 per share, diluted) in FY 2024, driven by increased operating earnings, West Africa exit adjustments, interest revenue from West African asset sale, and favorable foreign exchange, partially offset by higher income tax expense.

• Balance Sheet:

  • Long-term debt: $14.0 million (including $5.0 million undrawn revolving credit facility) vs. $21.5 million in FY 2024; net repayment of $7.5 million in FY 2025.

  • Working capital: $50.4 million vs. $48.6 million in FY 2024.

  • Share repurchase: 68,916 shares repurchased and canceled at $0.82 per share under normal course issuer bid (terminates October 30, 2025).

Strategic Updates

• Strategic Shift: Focused on senior and intermediate mining customers in Canada and South America, exiting unprofitable West African operations in Q2 2024.

• Operational Improvements: Disciplined business strategy and continuous improvement programs drove highest net earnings in over a decade.

• Market Dynamics:

  • Strong demand from senior and intermediate mining companies due to high gold and copper prices.

  • Gold drilling accounted for >60% of FY 2025 revenue; copper demand remains strong, especially in Chile.

  • Junior mining demand constrained by financing conditions, but increasing financing activity noted.

• Capacity and Growth: Significant available drilling capacity in Canada; ability to mobilize rigs with minimal capex. Strong relationships with junior miners position the company for selective opportunities.

• Capital Allocation: Debt repayment and share repurchasing to drive shareholder value.

Analyst Questions

• No specific analyst questions were detailed in the provided transcript.

Closing Remarks

• Fiscal 2025 marked the best financial performance in over 10 years, driven by strategic focus on Canada and South America, operational improvements, and favorable metal prices (gold at record highs, strong copper demand).

• The company is well-positioned for continued profitability and long-term value creation, leveraging its market position, capacity, and industry tailwinds.