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Good morning, ladies and gentlemen. Thank you for standing by. [Operator Instructions] I would like to remind everyone that this conference call is being recorded on Monday, May 9, at 10:30 a.m. Eastern Standard Time and is being broadcast live via the Internet.
During today's call, management will make statements regarding management's expectations for the company's future financial and operational performance. These statements are considered forward-looking statements. Each forward-looking statement speaks only as the date of this call, and actual results may differ materially from management expectations for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in the company's SEDAR filings.
I will now turn the call over to the President and CEO of Geodrill Limited, Mr. Dave Harper.
Thank you, operator. Good morning, and welcome to Geodrill's Q1 2022 Quarterly Financial Results Conference Call. I'll begin with an overview of our operations and performance for the quarter. Our CFO, Greg Borsk, will then give a more detailed review of our first quarter financial results, after which I will discuss our outlook for the remainder of 2022.
So the first quarter of 2022 is the best we have ever had in the company's 25-year history. Our record quarterly performance not only delivered on key financial metrics but also demonstrated steady valuation generation. We generated record revenue, representing a year-over-year increase of 9%. Please recall that for the corresponding quarter a year ago, we achieved a 70% year-over-year improvement, which was an exceptional result. And therefore, any increase on this is in itself also considered exceptional.
We also achieved record EBITDA 31% of revenue. We delivered record net income of USD 6 million or USD 0.13 per share. Total equity improved by a record USD 5.2 million or 6% on the previous quarter to USD 92.7 million. And that is up year-over-year by USD 13.8 million or 18%, generating for our shareholders a return on equity of 16%. We also achieved a record return on capital employed of 21% and we ended the quarter with net cash of USD 5.6 million, and we also paid a cash dividend during the quarter of CAD 0.03 per share.
The bottom line is that rig to rig, Geodrill continues to outperform, generating record profitability and demonstrating that our model works. I will now turn the call over to Greg Borsk to discuss the details. Thank you. Thank you, Greg.
Thank you, Dave. As a reminder, all figures reported are in U.S. dollars. The company generated record revenue of $33.4 million in Q1 2022, an increase of $2.7 million or 9% when compared to $30.7 million in Q1 2021. The increase in revenue was a result of the increase in demand for the company's drilling services. With gold price averaging at approximately $1900 an ounce during the first quarter of 2022, global exploration spending continues to be strong.
The gross profit for Q1 2022 was $9.8 million, being 29% of revenue compared to a gross profit of $9.6 million for Q1 2021. The gross profit increase is a result of the increase in revenue. Overall, the company realized record EBITDA for Q1 2022 of $10.4 million being 31% of revenue compared to $10 million for Q1 2021. The company also realized record net income for Q1 2022 of $6 million or $0.13 per share compared to $5.7 million for Q1 2021 or $0.13 per share. As Dave mentioned, we ended the quarter strong with net cash of $5.6 million.
At this point, I will turn the call back to Dave.
Thank you, Greg. It is clear our financial performance is a testament to the strength of our business and the demand for our drilling services. Before I go to the Q&A portion of the call, I would like to provide a brief outlook and key growth opportunities for the remainder of 2022. As mentioned, we are benefiting from strong gold and commodity prices and global tailwinds that continue to drive demand for our services. With increased exploration budgets pushing utilization higher, we're now also seeing increased pricing for our services. Our sharp focus on executing on our capital markets objectives has put us in a strong position to continue to benefit from the robust exploration environment. Against this backdrop and with more than USD 130 million in new drilling contracts, all with top-tier gold producers and commodity producers and an expanded geographical footprint, we expect to keep executing at a solid pace, delivering steady revenue growth and profitability, ultimately making Geodrill more attractive than ever as an investment.
This concludes our prepared remarks on our financial results. Thank you for participating in today's call. I'll now be pleased to hand over the call back to the operator for anyone who has a question. Thank you.
[Operator Instructions] Your first question comes from Daryl Young with TD Securities.
Just looking at the commentary you made in the release about effectively activity levels continuing from current, does that imply that there really won't be much seasonality this year and you're effectively running full steam at current kind of revenues and EBITDA levels? Or should we expect some traditional seasonality with increases in Q2?
The seasonality generally kicks in to Q3, Daryl. So we do expect seasonality. But you know we've expanded our geographical footprint into jurisdictions where we don't suffer from that seasonality. So I'm expecting that we will see seasonality, but will probably have less of effect than it's having on a percentage basis in previous years.
The other thing I would just add is that whilst it was a strong quarter, the majority of the work that came from the quarter was as we pretty much exited March. So the real story is here, it's not the strong Q1. We think it was a great result. But around January, we're actually a bit cheap. February -- and that was because, basically, I mentioned we've signed $130 million in contracts. So we're very busy getting ready to start those contracts. The revenue is, of course, the laggard to any contract. And so bottom line is that throughout the quarter, the real story is the very, very solid back half of March. And what this does is this all goes particularly well for quarter 2. So yes, basically, July quarter 1, actually end of our quarter 2.
Okay. Perfect. And then just in terms of the rigs that are being manufactured and as well the rented rigs, I don't think I've ever seen you report that before with rented rigs. But is that a reflection of just huge demand and maybe some backlog in getting new rigs in the door? Or just a little color there would be great.
Well, the rented rigs, it relates to kind of a new contract. And as we've ordered a couple of new rigs, and we'll be ordering additional rigs, but to kind of kick start turnkey start that contract, we're renting to get it go, but the plan is to eventually as soon as we can get our own new rigs in there to do that. In terms of manufacturing, we always have rigs going through. You always see each year, we kind of do a mix of new rigs for manufacturers that there is a bit of a time lag on that. But through our workshop, Daryl, we are absolutely able to get rigs out on our own. And so you'll see throughout 2022, you'll see a mix of rigs coming out of the workshop being available for use and brand new rigs that we get and put in operation right away.
Okay, great. And then just one last one on the labor environment and margins. It seems like you're doing a pretty good job of passing through costs at this point, but should we expect anything on the horizon in terms of labor cost inflation or any risks there?
It's definitely there, and it's alive and well. But we are in a fortunate situation with demand rising, I think it's an even playing field for us and most of our competitors. So our costs are rising so to our competitors. We raise our prices so to do our competitors. I think the trick is what we try to do, if we can, is get a little bit ahead of the curve so that we've got some dry powder there. And we should be -- we're doing reasonably well on that. But it's certainly far from the suppliers market at this point in time. I think that's going to imminently arrive, but we're not there yet.
Okay, great. I'll hop back in the queue and let someone else ask a question.
Your next question comes from Ahmad Shaath with Beacon Securities.
I guess I want to go back just to the margin profile. If we look at the -- on a trailing 12-month basis, we haven't really seen the operational leverage that we normally expect. Maybe help us understand why is that? Is that a function of the longer-term contracts that are more stable and tied to mining operations. Just trying to wrap our head around looking ahead, revenue is strong, but trying to wrap our head around where the margins are going to settle on and should we get back into some -- seeing the benefit of that operational leverage and a little bit of a margin expansion bucking the last 4 quarters' trend?
If you look at the gross margin that in 2021, very strong in Q1 and Q2 and then it dips in Q3 when we have wet season, and that's because we still keep the workshops functional. We still have the cost of goods sold without as much revenue. So earlier, we had a question on seasonality. There's definitely seasonality in the business.
But overall, the margins, if you look at, I think, for the last 3 years, we have a gross margin of 25%. And the key, whenever you're in an inflationary environment, labor costs are increasing, shipping costs are increasing, everything is increasing, we operate under that scenario, and we try to recover some of that through the revenue line. But I think the point is we manage the business but try to maintain our gross margin. which isn't always easy.
I mean if you're increasing revenue and you're able to maintain your margins, we look at that as a positive. So if you look at Q1, again, and I think in Q1 2021, we had exceptionally high gross margins, 29% this quarter and 31% last quarter. And that was a function of being extremely busy. In terms of busy I mean, having a lot of revenue. So a lot of the rigs, most of the rigs, utilization-wise are out drilling. And that is characteristic of Q1 and Q2 where you have high gross margins. And then when we get into Q3 and then Q4 kind of with the holiday season, those margins kind of come in.
So I guess what I'm trying to communicate is, again, there is seasonality, you see extremely high gross margins in the first 2 quarters and then they kind of level off in Q3 and Q4. But overall, we manage towards our 25%, 26% gross margin. And through Q1 and when we were able to release Q2, we'll be well ahead of that.
I'll just jump in just very quickly. I didn't think the margins were that far off actually. I thought given what happens is when a bunch of contracts are signed, but the laggard is always the revenue and you go through the sort of negative cash generation for a couple of months while everything is getting started. I actually thought the results were exceptional, given the start of all this new work we had to get underway. You recall some years ago, we had a very busy amount of startup stuff going on in the quarter 4, and it reflected in the following quarter that we actually saw the margin growth in the quarter that followed.
I think it is going to be a similar situation here. So yes, I didn't see anything, I thought the margins were pretty good under the circumstances. And also, you've got to appreciate that no matter where you're going about who you talk everyone is complaining about pricing these days. It doesn't matter whether you're going down the supermarket to buy a [indiscernible] a bottle of beer or gallon of petrol for your car, costs are rising everywhere you go. And it's no different in our business. To maintain these margins in a fast-moving cost environment as we are in, as everyone is in, I think we do pretty well. I was happy with the results.
No. That's great. I mean I guess my point was on the EBITDA line. I mean I have seen revenue growth, if I go from Q2 last year until Q1 this year, which is the last 12 months, revenue growth is 47%, 44%, 8% and 9%. while EBITDA is lagging that in growth and 16%, 21% and 5% this quarter. Typically, I mean, the way we think about it is that in an upcycle, EBITDA growth should outpace revenue growth. I'm just trying to understand if the trend over the last 12 months is a function of a little bit of a change in the business mix and the contract mix that you guys have taken advantage of this upcycle to get into longer-term, more stable contracts? Or was there something else in terms of some ramp-up that we're yet to see the full benefit of on the profitability line going ahead?
A bit of both.
A bit of both.
No further questions at this time. Mr. Harper, you may proceed.
Okay. Well, just no other call -- so no other questions. We will then end the call there. I wish everybody a belated happy Mother's Day for yesterday. So all the mothers out there in all the countries where it was Mother's Day, happy Mother's Day. Have a great day.
Thank you, everyone.
Ladies and gentlemen, this concludes your conference call for today. We thank your participating and ask that you please disconnect your lines.