Foraco International announces 2007 fourth quarter and year end results



    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
    UNITED STATES/

    TORONTO and MARSEILLES, France, Feb. 29 /CNW/ - Foraco International SA
(TSX: FAR) (the "Company" or "Foraco"), a leading global provider of
diversified drilling services, today announced its unaudited financial results
for the three and twelve-month periods ended December 31, 2007. All figures
are reported in Euros ((euro)), unless otherwise indicated.

    
    2007 Highlights

    -   Revenue increased 112% to (euro)74.6 million from (euro)35.1 million
        for the year ended December 31, 2006
    -   Gross profit increased to (euro)20.7 million from (euro)8.2 million
        for the year ended December 31, 2006
    -   Net earnings increased to (euro)6.5 million, or (euro)0.13 per share
        (basic and diluted), compared to (euro)2.2 million, or (euro)0.05 per
        share (basic and diluted) in 2006
    -   Foraco expanded its operations by acquiring substantially all the
        Canadian assets of Connors Drilling, a leading, medium-sized Canadian
        drilling company that has provided drilling services to the mining
        industry in Western Canada since 1926
    -   In August, 2007 the Company successfully completed its Initial Public
        Offering ("IPO") on the Toronto Stock Exchange, resulting in net
        proceeds to the Company of C$34.4 million
    

    "We are pleased to report strong growth in consolidated revenue and
earnings for 2007. Our revenue growth in the fourth quarter and for the year
was driven by the notably strong performance of our Mining and Energy
operations in North America, and sustained growth in all other geographical
regions," said Daniel Simoncini, Chairman and Chief Executive Officer of
Foraco. "Since we established our presence in North America, we have
significantly enhanced our customer and project portfolio, including the
addition of two multinational mining companies, which has led to new business
both in North America and Africa. With our increased scale of operations, we
are focused on establishing Foraco as a preferred international drilling
service provider for the mining majors."
    "According to Metals Economics Group, global non-ferrous metals
exploration budgets reached a record US$10.5 billion in 2007. If favorable
market conditions continue, we anticipate strong demand in our Mining & Energy
segment in 2008. Our Water, Environmental & Infrastructure segment has
benefited from historical stable to growing demand and we expect this trend to
continue in 2008," added Mr. Simoncini. "Looking ahead, we remain focused on
driving organic growth and ongoing expansion of our global market presence
both through internal development and acquisitions."
    "Our operations in the Mining & Energy business segment continued to
benefit from favorable market conditions in throughout the year, while our
Water, Environmental & Infrastructure segment revenue declined slightly due to
our strategic decision in 2006 to reallocate equipment and resources to higher
margin Mining & Energy projects within certain regions," said Jean-Pierre
Charmensat, Vice-CEO and Chief Financial Officer. "Our Board today set the
Annual General Meeting date for Monday, May 12, 2008 and proposed the payment
of a dividend equal to (euro)0.014 per common share to be approved by
shareholders at the Meeting. This proposed dividend reflects the strength of
our financial position and our strong performance in 2007. With net proceeds
of nearly C$35 million ((euro)23.9 million) from the completion of our IPO and
(euro)16.4 million net cash generated from our operations in 2007, we entered
2008 with a strong balance sheet and the financial flexibility to pursue our
growth strategy."

    
    Financial Results

    -------------------------------------------------------------------------
    (In thousands Euros)              Three      Three
    (unaudited)                      months     months       Year       Year
                                      ended      ended      ended      ended
                                     Dec 31,    Dec 31,    Dec 31,    Dec 31,
                                       2007       2006       2007       2006
    -------------------------------------------------------------------------
    Revenue                          19,588     10,927     74,578     35,138
    -------------------------------------------------------------------------
    Gross Profit(1)                   5,474      2,986     20,660      8,233
    -------------------------------------------------------------------------
    Profit before tax and
     share-based compensation
     granted as part of the IPO       3,091      1,668     11,712      2,833
    -------------------------------------------------------------------------
    Net profit for period             1,178      1,247      6,498      2,167
    -------------------------------------------------------------------------
    (1) Includes depreciation expenses allocated to cost of sales
    

    Three-month period ended December 31, 2007

    Revenue for the three-month period ended December 31, 2007 increased 79%
to (euro)19.6 million, compared to (euro)10.9 million in the fourth quarter of
2006. Revenue growth was driven primarily by the Company's operations in North
America but also in Africa and Europe. For the fourth quarter of 2007,
Foraco's revenue derived from its operations in Africa and Europe increased to
(euro)8.6 million and (euro)3.1 million respectively, up from
(euro)7.1 million and (euro)1.9 million in the fourth quarter a year ago. In
North America, the acquisition of substantially all the Canadian assets of
Connors Drilling on February 1, 2007, contributed (euro)2.5 million in revenue
in the fourth quarter of 2007, and the organic growth of Foraco Canada, which
commenced operations in late 2006 in Eastern Canada and the United States,
contributed (euro)4.0 million in revenue during the quarter.
    Gross profit for the three-month period ended December 31, 2007 increased
83% to (euro)5.5 million, or 27.9% of revenue, compared to gross profit of
(euro)3.0 million, or 27.3% of revenue, in the fourth quarter a year ago.
Increased gross profit for the fourth quarter of 2007 reflects Foraco's strong
revenue growth during the period.
    Selling and marketing expenses, and general and administrative expenses
("operating expenses"), for the fourth quarter of 2007 totaled
(euro)2.2 million, or 11.1% of revenue, compared to operating expenses of
(euro)1.3 million, or 12.3% of revenue, in the fourth quarter of 2006.
Increased operating expenses in the fourth quarter of 2007 reflect the
Company's expansion in North America and increased business activity.
    Profit before income tax and share-based compensation granted as part of
the IPO totaled (euro)3.1 million for the fourth quarter of 2007 compared to
profit before income tax of (euro)1.7 million a year ago.
    In the fourth quarter of 2006 the effective income tax rate benefited
from favorable taxation in certain countries. The higher effective income tax
rate in the fourth quarter of 2007, resulted primarily from the progressive
contribution of Canada to the taxable profit, as Canada has a less favorable
tax rate compared to other tax jurisdictions where Foraco historically
operated. The income tax expense for the three-month period ended December 31,
2007 increased to (euro)1.9 million from (euro)0.4 million a year ago.
    Improved operating profit for the fourth quarter of 2007 was offset by
increased income tax expense in the quarter, resulting in net earnings for the
period remaining stable at (euro)1.2 million or (euro)0.02 per share (basic
and diluted) for the fourth quarter of 2007.

    Year ended December 31, 2007

    For the year ended December 31, 2007, revenue increased 112% to
(euro)74.6 million compared to revenue of (euro)35.1 million in 2006. Gross
profit increased 151% to (euro)20.7 million, or 27.7% of revenue, compared to
gross profit of (euro)8.2 million, or 23.4% of revenue, in 2006. Operating
expenses, for 2007 totaled (euro)8.0 million, or 10.7% of revenue, compared to
operating expenses of (euro)5.0 million, or 14.3% of revenue, a year ago.
    Profit before income tax and share-based compensation granted as part of
the IPO totaled (euro)10.7 million for the year ended December 31, 2007
compared to profit before income tax of (euro)2.8 million in 2006.
    In 2007, the effective income tax rate before share-based payment
expenses and other non-tax deductible items was 35% compared to 24% in 2006.
This higher effective tax rate is primarily attributable to the higher
proportional revenue contribution from the Company's Canadian based
operations.
    Net earnings for 2007 increased to (euro)6.5 million or (euro)0.13 per
share (basic and diluted) compared to net earnings of (euro)2.2 million or
(euro)0.05 per share (basic and diluted) in 2006.
    For the year ended December 31, 2007, cash flow from operations before
changes in working capital totaled (euro)18.2 million compared to
(euro)5.8 million in 2006. The purchase consideration paid for the acquisition
of the Canadian operations of Connors Drilling and the anticipated working
capital requirements were funded by a (euro)8.7 million loan in January 2007.
The Company repaid this loan in full in August 2007, utilizing a portion of
the net proceeds from its IPO.
    In 2007, capital expenditures increased to (euro)7.1 million, from
(euro)3.1 million in 2006. Capital expenditures in 2007 included (euro)5.5
million for nine new drill rigs and ancillary equipment, and three new drill
rigs that are currently under construction. This new equipment was primarily
allocated to the Mining & Energy segment.
    Cash flow generated by operating activities and net proceeds from the IPO
resulted in a net cash position of (euro)23.3 million as at December 31, 2007,
compared to cash and cash equivalents of (euro)3.3 million as at December 31,
2006.

    
    Segment Revenue Performance

    (In thousands Euros)              Three      Three
    (unaudited)                      months     months       Year       Year
                                      ended      ended      ended      ended
                                     Dec 31,    Dec 31,    Dec 31,    Dec 31,
                                       2007       2006       2007       2006
                                    --------   --------   --------   --------
    Reporting segment
    -----------------
    Mining & energy .............    14,395      4,883     53,946     13,584
    Water, environmental
     & infrastructure ...........     5,193      6,043     20,631     21,544
                                    --------   --------   --------   --------
    Total revenue ...............    19,588     10,926     74,578     35,138
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    Geographical region
    -------------------
    Africa ......................     8,584      7,116     35,254     23,968
    Europe ......................     3,055      1,867      7,550      4,702
    Asia Pacific ................     1,499      1,373      6,751      5,898
    Americas ....................     6,450        570     25,023        570
                                    --------   --------   --------   --------
    Total revenue ...............    19,588     10,926     74,578     35,138
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    

    Mining & Energy

    Foraco's Mining & Energy segment benefited from strong market conditions
in the fourth quarter of 2007 and its recent expansion into Canada and the
U.S. with segment revenue increasing to (euro)14.4 million, or 73% of
consolidated revenue, from (euro)4.9 million, or 45% of consolidated revenue,
in the fourth quarter of 2006. For the year ended December 31, 2007, Mining &
Energy segment revenue increased to (euro)53.9 million, or 72% of consolidated
revenue, up from (euro)13.6 million, or 39% of consolidated revenue in 2006.

    Water, Environment & Infrastructure

    Foraco's Water, Environmental & Infrastructure segment revenue decreased
to (euro)5.2 million, or 27% of consolidated revenue, in the fourth quarter of
2007, from (euro)6.0 million, or 55% of consolidated revenue, in the fourth
quarter of 2006. This decrease was mainly due to Foraco's strategic decision
in 2006 to reallocate its production equipment and resources from the Water,
Environmental & Infrastructure segment to the Mining & Energy segment. For the
year ended December 31, 2007, Water, Environmental & Infrastructure segment
revenue decreased to (euro)20.6 million, or 28% of consolidated revenue, from
(euro)21.5 million, or 61% of consolidated revenue in 2006.

    Currency and exchange rate

    The average Euro/Canadian dollar exchange rates for the three and
twelve-month periods ended December 31, 2007 were 1.42018 and 1.4335,
respectively. As of December 31, 2007, the closing Euro/Canadian dollar
exchange rate was 1.4439.
    The Company's unaudited financial statements for the three and
twelve-month periods ended December 31, 2007 will be posted today on Foraco's
web site at www.foraco.com. The Company will file its audited 2007 year end
financial statements on SEDAR in March 2008.

    Notice of Conference Call and Webcast

    Management of Foraco will host a conference call today, Friday, February
29, 2008, at 10:00 am (EST) to discuss its 2007 fourth quarter and year end
financial results. A live audio webcast of the conference call will also be
available through www.foraco.com. Please connect at least 15 minutes prior to
the conference call to ensure adequate time for any software download that may
be needed to hear the webcast. An archived replay of the webcast will be
available for 90 days. A taped replay of the conference call will also be
available until Friday, March 7, 2008 at midnight by calling 1-877-289-8525 or
416-640-1917, reference number 21262572 followed by the number sign.

    About Foraco

    Foraco (TSX: FAR) is a worldwide drilling service provider headquartered
in Marseille, France. The Company provides a diverse range of drilling
services to the minerals, energy, water, environmental and infrastructure
sectors. The Company currently operates 108 drilling rigs, with a presence in
16 countries across five continents. For more information about Foraco, visit
www.foraco.com.

    Caution concerning forward-looking statements

    This press release may contain "forward-looking statements" and
"forward-looking information" within the meaning of applicable securities
laws. These statements and information include estimates, forecasts,
information and statements as to management's expectations with respect to,
among other things the future financial or operating performance of the
Company and capital and operating expenditures. Often, but not always,
forward-looking statements and information can be identified by the use of
words such as "may", "will", "should", "plans", "expects", "intends",
"anticipates", "believes", "budget", and "scheduled" or the negative thereof
or variations thereon or similar terminology. Forward-looking statements and
information are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Readers are cautioned that any such forward-looking statements
and information are not guarantees and there can be no assurance that such
statements and information will prove to be accurate and actual results and
future events could differ materially from those anticipated in such
statements. Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed under the heading
"Risk Factors" in the Company's final prospectus dated July 23, 2007, which is
filed with Canadian regulators on SEDAR (www.sedar.com). The Company expressly
disclaims any intention or obligation to update or revise any forward-looking
statements and information whether as a result of new information, future
events or otherwise. All written and oral forward-looking statements and
information attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the foregoing cautionary statements.

    %SEDAR: 00025480E




For further information:

For further information: Bruce Wigle, Investor Relations, The Equicom
Group, T: (416) 815-0700 or 1-800-385-5451, ext. 228, F: (416) 815-0080, E:
bwigle@equicomgroup.com


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