Foraco International Announces 2007 Third Quarter Results



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

    TORONTO and MARSEILLES, FRANCE, Nov. 8 /CNW/ - Foraco International SA
(TSX: FAR) (the "Company" or "Foraco"), a leading global provider of
diversified drilling services, today announced its financial results for the
three and nine-month periods ended September 30, 2007. All figures are
reported in Euros, unless otherwise indicated.
    On August 2, 2007, Foraco successfully completed its previously announced
Initial Public Offering ("IPO") of 14,040,870 common shares at a price of
C $2.40 per share for gross proceeds of C$33.7 million. The IPO was led by
Research Capital Corporation, and included CIBC World Markets Inc. and
Canaccord Capital Corporation (collectively, the "Agents"). On August 20,
2007, the Company closed the over allotment option made available to the
Agents as part of the Company's IPO. In total, the Company issued 16,147,000
common shares pursuant to its IPO for total gross proceeds of C$38.8 million.
The net proceeds to the Company from the IPO were C$34.4 million, after
deducting costs directly attributable to the offering.

    
    Q3 2007 Highlights
      -  Revenue increased 168% to (euro)20.4 million compared to
         (euro)7.6 million in Q3 2006
      -  Gross profit increased to (euro)5.9 million compared to
         (euro)1.3 million in Q3 2006
      -  Net earnings increased to (euro)2.4 million, or (euro)0.04 per share
         (basic and diluted), up from a net loss of (euro)0.1 million, or
         (euro)(0.00) per share (basic and diluted) in Q3 2006
      -  Completion of IPO raising gross proceeds of C$38.8 million
      -  Commenced trading on the Toronto Stock Exchange under trading
         symbol "FAR"
    

    "We are pleased to report exceptional growth in consolidated revenue and
earnings for the third quarter and first nine months of 2007. Our third
quarter growth was driven by the strong performance of our Mining and Energy
operations in both Africa and North America," said Daniel Simoncini, Chairman
and Chief Executive Officer of Foraco. "We have made significant progress in
building our market presence in North America in 2007 and we are committed to
driving continued penetration into international markets going forward."
    "Our operations in the Mining & Energy business segment continued to
benefit from favourable market conditions, while our Water, Environmental &
Infrastructure segment declined due to seasonal factors and our strategic
decision to reallocate equipment to higher margin Mining & Energy projects
within certain regions," said Jean-Pierre Charmensat, Vice-CEO and Chief
Financial Officer. "With net proceeds of nearly C$35 million from the
completion of our IPO, we have a strong balance sheet and the financial
flexibility to pursue our growth strategy. We remain focused on organic growth
through the continued development of our existing customer relationships and
ongoing geographic expansion both through internal development and strategic
acquisitions."

    
    Financial Results

    -------------------------------------------------------------------------
    (In thousands Euros)              Three      Three       Nine       Nine
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    Sept 30,   Sept 30,   Sept 30,   Sept 30,
                                       2007       2006       2007       2006
    -------------------------------------------------------------------------
    Revenue                          20,422      7,610     54,991     24,211
    -------------------------------------------------------------------------
    Gross Profit(1)                   5,867      1,278     15,186      5,257
    -------------------------------------------------------------------------
    Net Earnings before share
     based compensation
     granted as part of the IPO       2,588        (92)     6,303        920
    -------------------------------------------------------------------------
    Net Earnings                      2,386        (92)     5,320        920
    -------------------------------------------------------------------------
    (1) Includes depreciation expenses allocated to cost of sales
    

    Revenue for the three-month period ended September 30, 2007 increased
168% to (euro)20.4 million, compared to (euro)7.6 million in the same period
of 2006. Revenue growth was driven primarily by the Company's operations in
Africa and North America. Foraco's revenue derived from its operations in
Africa increased to (euro)7.6 million in the third quarter of 2007 from
(euro)4.0 million in the third quarter a year ago. In North America, the
acquisition of substantially all of the Canadian assets of Connors Drilling on
February 1, 2007, contributed (euro)5.7 million in revenue in the third
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)3.2 million in revenue during the quarter.
    Gross profit for the three-month period ended September 30, 2007
increased 359% to (euro)5.9 million, or 28.7% of revenue, compared to gross
profit of (euro)1.3 million, or 16.8% of revenue, in the third quarter a year
ago. Increased gross profit for the third quarter of 2007 reflects Foraco's
strong revenue growth in the period.
    Selling and marketing expenses, and general and administrative expenses
("operating expenses"), for the third quarter of 2007 totaled
(euro)2.1 million or 10.2% of revenue, compared to operating expenses of
(euro)1.3 million or 16.7% of revenue in the third quarter of 2006. Increased
operating expenses in the third quarter of 2007 reflect the Company's
expansion in North America, increased business activity and corporate costs
related to the Company's IPO.
    For the third quarter of 2007, net earnings increased to
(euro)2.4 million or (euro)0.04 per share (basic and diluted), up from a net
loss of (euro)(0.1) million, or (euro)(0.00) per share (basic and diluted), in
the third quarter of 2006. Increased net earnings resulted from higher
revenues, strong operational performance and improved absorption of operating
expenses.
    For the nine-month period ended September 30, 2007, revenue increased
127% to (euro)55.0 million compared to revenue of (euro)24.2 million in the
same period a year ago. Gross profit increased 189% to (euro)15.2 million, or
27.6% of revenue, compared to gross profit of (euro)5.3 million, or 21.7% of
revenue, in the first nine months of 2006. Operating expenses, for the first
nine months of 2007 totaled (euro)5.8 million, or 10.5% of revenue, compared
to operating expenses of (euro)3.7 million, or 15.2% of revenue, in the
corresponding period a year ago.
    Net earnings before share based compensation granted as part of the IPO
totaled (euro)6.3 million in the first nine months of 2007. Net earnings
(after deducting share-based compensation granted as part of the IPO)
increased to (euro)5.3 million or (euro)0.11 per share (basic and diluted)
compared to net earnings of (euro)0.9 million or (euro)0.02 per share (basic
and diluted) in the first nine months of 2006.
    For the nine-month period ended September 30, 2007, cash flow from
operations before changes in working capital totaled (euro)13.3 million
compared to (euro)3.2 million in the same period in 2006.
    On August 10, 2007, Foraco repaid the outstanding balance of the
borrowing relating to the acquisition of Connors Drilling and Boniface for
approximately (euro)7.9 million, using a portion of net proceeds from the IPO.
As at September 30, 2007 Foraco had cash and cash equivalents of
(euro)21.5 million compared to (euro)3.3 million as at December 31, 2006. As
at September 30, 2007, bank overdrafts totaled (euro)5.9 million, compared to
(euro)6.6 million as at December 31, 2006.

    
    Segment Revenue Performance

    (In thousands Euros)              Three      Three       Nine       Nine
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    Sept 30,   Sept 30,   Sept 30,   Sept 30,
                                       2007       2006       2007       2006

    Reporting segment
    -----------------
    Mining & energy................  16,968      3,255     39,552      8,701
    Water, environmental
     & infrastructure..............   3,454      4,356     15,439     15,511
                                    --------   --------   --------   --------
    Total revenue..................  20,422      7,610     54,991     24,212
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    Geographical region
    -------------------
    Africa.........................   7,634      4,050     26,455     16,852
    Europe.........................   2,047      1,653      4,418      2,835
    Asia Pacific...................   1,818      1,907      5,249      4,525
    Americas.......................   8,923          -     18,869          -
                                    --------   --------   --------   --------
    Total revenue..................  20,422      7,610     54,991     24,212
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    

    Mining & Energy

    Foraco's Mining & Energy segment benefited from strong market conditions
in the third quarter of 2007 with revenue increasing to (euro)17.0 million, or
83% of consolidated revenue, from (euro)3.3 million, or 43% of consolidated
revenue, in the third quarter of 2006. Foraco was able to take advantage of
favourable market conditions in this segment with its strong presence in
Africa and its recent expansion into Canada and the U.S.

    Water, Environment & Infrastructure

    Foraco's Water, Environmental & Infrastructure segment revenue decreased
21% to (euro)3.5 million, or 17% of consolidated revenue, in the third quarter
of 2007, from (euro)4.4 million, or 57% of consolidated revenue, in the third
quarter of 2006. This decrease was due to seasonality factors and Foraco's
strategic reallocation of production equipment from the Water, Environmental &
Infrastructure segment to the Mining & Energy segment in some African
countries. In Africa, where Foraco generates most of its revenue in the Water
supply segment, most of its operations are halted between July and October,
due to the rainy season.

    Currency and exchange rate

    The average exchange rate between the Euro and Canadian dollar for the
three and nine-month periods ended September 30, 2007 were 1.4387 and 1.4657,
respectively. On September 30, 2007, the closing exchange rate between the
Euro and Canadian dollar was 1.4171.

    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 100 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 X 228, F: (416) 815-0080, E: bwigle@equicomgroup.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890