TORONTO, May 13, 2013 /CNW/ - Geodrill Limited ("Geodrill" or the
"Company") (TSX: GEO), a leading West African based drilling company,
reported its financial results for the three months ended March 31,
2013. All figures are reported in U.S. dollars ($), unless otherwise
indicated. Geodrill's financial statements are prepared in accordance
(except earnings per share)
For the three months ended
March 31, 2013
For the three months ended
March 31, 2012
Gross profit margin
Earnings per share - basic
EBITDA = earnings before interest, taxes, depreciation, and amortization
Please see "Non-IFRS Measures" below for additional discussion
For the three months ended March 31, 2012, the foreign exchange loss was
included in the EBITDA calculation which was previously disclosed at
"We improved our revenue, gross profit and EBITDA from the previous two
quarters that were impacted by a challenging drilling environment in
the second half of 2012," said Dave Harper, President and CEO of
Geodrill Limited. "As we continue to see volatility in 2013 and
uncertainty in the market, we are maintaining a strategy of adaption to
these factors by increasing efficiency of our rig operations, cutting
back staffing levels and growth plans. Our focus in this market
contraction is to capture new business opportunities while mitigating
Q1-2013 Operational Highlights:
Began drilling on a gold project for a new client in Guinea;
Continued drilling a manganese project in Burkina Faso for a new client;
Completed a uranium project in Niger for a new client.
The Company's revenue sequentially increased by $2.11M in Q1-2013
compared to Q4-2012. However, on a quarter to quarter basis, the
Company's revenue decreased 31% to $15.03M, compared to $21.66M in
Q1-2012. The decrease in revenue in Q1-2013 was reflective of an
industry wide slowdown in which customers significantly reduced the
number of drill rigs operating on their sites. The decrease in revenue
is primarily attributable to the number of meters drilled decreasing
from 317,741 meters in Q1-2012 to 176,494 in Q1-2013.
The gross profit for Q1-2013 was $6.39M, compared to a gross profit of
$11.52M for Q1-2012, being a decrease of $5.13M or 45%. The gross
profit percentage for the Q1-2013 was 43% compared to 53% for the
Q1-2012. The decrease in the gross profit reflects the decrease in
revenue of 31% and the decrease in cost of sales of 15%.
Selling, General and Administrative ("SG&A") Expenses
SG&A expenses were $4.50M for Q1-2013, compared to $5.30M for Q1-2012 or
a reduction of approximately $0.80M. Repair and maintenance decreased
by $0.24M and share-based payment expense decreased by $0.23M in
Q1-2013 compared to Q1-2012.
Depreciation and Amortization
Depreciation and amortization of property, plant and equipment was
$2.39M for Q1-2013 compared to $1.71M Q1-2012.
EBITDA margin for Q1-2013 was 28% compared to 35% for Q1-2012.
Net income were $1.42M, being 9% of revenue for the Q1-2013, or $0.03
per Ordinary Share ($0.03 per Ordinary Share fully diluted), compared
to $4.43M, being 20% of revenue, for Q1-2012, or $0.10 per Ordinary
Share ($0.10 per Ordinary Share fully diluted).
As at March 31, 2013 the Company had cash and cash equivalents equal to
The Company currently has 42,512,000 ordinary shares issued and
The Company continues to believe that there is an industry wide slowdown
in drilling activities as there is pressure on early stage exploration
companies as financing from the capital markets continues to be
challenging. In addition, there is pressure on producing companies as
they continue to need to manage their exploration costs in light of
increasing costs on the production side of their business. The Company
had certain customers reduce the number of drill rigs operating at
their sites and have parked certain rigs. The Company believes that the
slowdown in drilling activity will continue throughout 2013 and, as
such, the Company continues to actively bid on new jobs and has taken
immediate steps to control costs, monitor its workforce and is
reviewing its capital expenditures.
As at March 31, 2013 the Company had 34 drill rigs that were available
for operation, three drill rigs were in the workshop and two drill rigs
were on hold and with the manufacturer.
Geodrill's financial statements and management's discussion & analysis
("MD&A"), for the three months ended March 31, 2013 are available via
Geodrill's website at www.geodrill-gh.com and will be available on SEDAR at www.sedar.com.
Annual General Meeting of Shareholders
Following the release, the Company will host its Annual Meeting of
Shareholders at the Design Exchange, 234 Bay Street, TD Centre, Toronto
at 10:00 am (EST) in which management will discuss the quarterly
A live audio webcast will be available through:
An archived replay of the webcast will be available for 7 days.
EBITDA is defined as Earnings before Interest, Taxes, Depreciation, and
Amortization. EBITDA is used as a measure of financial performance. The
Company believes EBITDA is useful to investors because it is frequently
used by securities analysts, investors and other interested parties to
evaluate companies in the Company's industry. However, EBITDA is not a
measure recognized by IFRS and does not have a standardized meaning
prescribed by IFRS. EBITDA should not be viewed in isolation and does
not purport to be an alternative to net income or gross profit as an
indicator of operating performance or cash flows from operating
activities as a measure of liquidity.
EBITDA does not have a standardized meaning prescribed by IFRS and
therefore it may not be comparable to similarly titled measures
presented by other publicly traded companies, and EBITDA should not be
construed as an alternative to other financial measures determined in
accordance with IFRS.
Additionally, EBITDA is not intended to be a measure of free cash flow
for management's discretionary use, as it does not consider certain
cash requirements such as capital expenditures, contractual
commitments, interest payments, tax payments and debt service
requirements. Please see the Company's MD&A for the three months ended
March 31, 2013 for the EBITDA reconciliation.
About Geodrill Limited
Geodrill Limited is a leading West African based drilling company
currently operating in Ghana Burkina Faso, Cote d'Ivoire and Guinea.
Geodrill provides exploration and development drilling services to
major, intermediate and junior mining companies with exploration and
development operations in West Africa. The Company specializes in
providing reverse circulation, diamond core and air-core drilling
services using a modern fleet of drill rigs. The Company plans to grow
organically and build its current client base while continuing to
assess expansion opportunities throughout West Africa and other
jurisdictions of Africa, to meet demand for its services and expertise.
Forward Looking Information
This press release and the management's discussions may contain
"forward-looking information" which may include, but is not limited to,
statements with respect to the future financial or operating
performance of the Company, its subsidiaries, future growth, results of
operations, performance, business prospects and opportunities. Often,
but not always, forward-looking statements can be identified by the use
of words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"believes", or variations (including negative variations) of such words
and phrases, or by the use of words or phrases that state that certain
actions, events or results "may", "could", "would", "might" or "will"
be taken, occur or be achieved.
Forward-looking statements are based on certain assumptions and analyses
made by the Company in light of its experience and perception of
historical trends, current conditions and expected future developments
and other factors it believes are appropriate. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements
of the Company and/or its subsidiaries to be materially different from
any future results, performance or achievements expressed or implied by
the forward-looking statements contained in this press release
including, without limitation those described in the Management's
Discussion & Analysis for the three months ended March 31, 2013 and the
Company's Annual Information Form dated March 27, 2013 under the
heading "Risk Factors". Although the Company has attempted to identify
important factors that could cause actual actions, events or results to
differ materially from those described in such forward-looking
statements, there may be other factors that may cause actions, events
or results to differ from those anticipated, estimated or intended.
Should one or more of these risks or uncertainties materialize or
should assumptions underlying such forward-looking statements prove
incorrect, actual results, performance or achievements may vary
materially from those expressed or implied by the forward-looking
statements contained in this press release. The forward-looking
information and forward-looking statements contained herein and
statement which may be made on the conference call are made as of the
date of this press release and the Company disclaims any obligation to
update or review such information or statements, whether as a result of
new information, future events or results of otherwise, except as
required by law.
SOURCE: Geodrill Limited
For further information:
(416) 238-1414 ext 233