Foraco International announces 2008 second quarter results



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

    TORONTO and MARSEILLES, France, Aug. 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 six-month periods ended June 30, 2008. Foraco's financial statements
are prepared in accordance with International Financial Reporting Standards
("IFRS"), rather than Canadian Generally Accepted Accounting Principles
(Canadian "GAAP"), and as such may not be directly comparable to the financial
statements of other Canadian issuers. All figures are reported in Euros
((euro)), unless otherwise indicated.

    
    Q2 2008 Highlights

    -  Revenue increased 21% to (euro)24.6 million from (euro)20.3 million in
       Q2 2007

    -  Gross profit increased 31% to (euro)7.9 million from (euro)6.1 million
       in Q2 2007

    -  Net earnings increased 73% to (euro)3.3 million, or (euro)0.06 per
       share (basic and diluted), compared to (euro)1.9 million, or
       (euro)0.04 per share (basic and diluted) in Q2 2007
    

    "We are pleased to report strong growth in consolidated revenue, gross
margin and net earnings for the second quarter of 2008. Our Mining & Energy
segment revenue, which accounted for approximately 73% of our consolidated
revenue in the period, increased 28% compared to the second quarter a year ago
as we benefited from increased business activity in Africa, Europe and North
America. Our Water, Environmental & Infrastructure segment revenue increased
6% in the quarter, largely as a result of growth in our water drilling
contracts in western Africa," said Daniel Simoncini, Chairman and Chief
Executive Officer of Foraco. "Over the past year, as we have expanded our
operations in North America, we believe we have made strong progress in
building relationships with the mining majors and are now increasingly being
considered for projects around the world. As we continue to grow and add
capacity, we will strategically deploy resources or expand into regions that
present the greatest opportunities."
    "Our gross margin, which reflects depreciation expense in cost of goods
sold, increased to 32.4% in the quarter, up from 30.0% in the second quarter a
year ago, reflecting stronger overall performance, increased business activity
and capacity utilization," said Jean-Pierre Charmensat, Vice-CEO and Chief
Financial Officer. "Looking ahead, we will continue to capitalize on favorable
market conditions through the selective expansion of our operations in key
growth regions, investing in new drilling equipment and optimizing the
allocation of our production capacity. With (euro)18.6 million in cash and
equivalents and continued strong growth in operating cash flow, we are well
positioned to capitalize on growth opportunities."

    
    Financial Results

    -------------------------------------------------------------------------
                                     Three      Three       Six        Six
                                     months     months     months     months
                                     ended      ended      ended      ended
    (In thousands Euros)            June 30,   June 30,   June 30,   June 30,
                                      2008       2007       2008       2007
    -------------------------------------------------------------------------
    Revenue                          24,556     20,313     47,265     34,569
    -------------------------------------------------------------------------
    Gross profit(1)                   7,949      6,082     14,409      9,319
    -------------------------------------------------------------------------
    Operating profit                  5,270      3,289      9,376      4,939
    -------------------------------------------------------------------------
    Net profit for period             3,332      1,922      6,028      2,934
    -------------------------------------------------------------------------
    (1) Includes depreciation expenses allocated to cost of sales
    

    Three-month period ended June 30, 2008

    Revenue for the three-month period ended June 30, 2008 increased 21% to
(euro)24.6 million, compared to (euro)20.3 million in the second quarter of
2007. Revenue growth was achieved in both the Mining & Energy and Water,
Environmental & Infrastructure segments, with the greatest growth realized in
the Company's Mining & Energy operations in Africa. For the second quarter of
2008, Foraco's revenue derived from its operations in Africa and Europe
increased to (euro)13.9 million and (euro)2.1 million respectively, up from
(euro)10.9 million and (euro)1.4 million respectively in the second quarter a
year ago. In North America, Foraco's revenue increased to (euro)6.7 million in
the second quarter of 2008 compared to (euro)6.1 million in the same period a
year ago.
    Gross profit (including depreciation) for the three-month period ended
June 30, 2008 increased 31% to (euro)7.9 million, or 32.4% of revenue,
compared to gross profit (including depreciation) of (euro)6.1 million, or
29.9% of revenue, in the second quarter a year ago. Increased gross profit and
margin for the second quarter of 2008 reflects Foraco's strong revenue growth
and the improvement in profitability in both business segments during the
period.
    Selling and marketing expenses, and general and administrative expenses
("operating expenses"), for the second quarter of 2008 totaled  (euro)2.5
million, or 10.1% of revenue, compared to operating expenses of (euro)2.1
million, or 10.1% of revenue, in the second quarter of 2007. Increased
operating expenses in the second quarter of 2008 reflect increased business
activity, and Company initiatives to further strengthen its corporate
organization and controls.
    Operating profit totaled (euro)5.3 million (or 21.5% of revenue) for the
second quarter of 2008 compared to (euro)3.3 million (or 16.2% of revenue) a
year ago.
    Net earnings for the second quarter of 2008 increased 73% to
(euro)3.3 million, or (euro)0.06 per share (basic and diluted), compared to
(euro)1.9 million, or (euro)0.04 per share in the second quarter a year ago.

    Six-month period ended June 30, 2008

    Revenue for the six-month period ended June 30, 2008 increased 37% to
(euro)47.3 million, compared to (euro)34.6 million in the same period of 2007.
Revenue growth was achieved in both the Mining & Energy and Water,
Environmental & Infrastructure segments, with the greatest growth realized in
the Company's Mining & Energy operations in North America, Europe and Africa.
For the first half of 2008, Foraco's revenue derived from its operations in
North America, Europe and Africa increased to (euro)15.1 million, (euro)4.5
million and (euro)24.5 million respectively, up from (euro)9.9 million,
(euro)2.4 million and (euro)18.8 million respectively in the first half of
2007.
    Gross profit (including depreciation) for the six-month period ended
June 30, 2008 increased 55% to (euro)14.4 million, or 30.5% of revenue,
compared to gross profit (including depreciation) of (euro)9.3 million, or
27.0% of revenue, in the first half of 2007. Increased gross profit for the
first half of 2008 reflects Foraco's strong revenue growth and the improvement
in profitability in both business segments during the period.
    Selling and marketing expenses, and general and administrative expenses
("operating expenses"), for the first half of 2008 totaled (euro)4.9 million,
or 10.3% of revenue, compared to operating expenses of (euro)3.7 million, or
10.7% of revenue, in the first half of 2007. Increased operating expenses in
the first half of 2008 reflect increased business activity, and the Company
initiatives to further strengthen its corporate organization and controls.
    Operating profit totaled (euro)9.4 million (or 19.8% of revenue) for the
first half of 2008 compared to (euro)4.9 million (or 14.3% of revenue) a year
ago.
    Net earnings for the first half of 2008 increased 105% to (euro)6.0
million, or (euro)0.10 per share (basic and diluted), compared to (euro)2.9
million, or (euro)0.07 per share in the first half of 2007.
    For the six-month period ended June 30, 2008, cash flow from operations
before changes in working capital increased to (euro)12.0 million compared to
(euro)8.1 million in the first half of 2007.
    As at June 30, 2008, cash and cash equivalents totaled (euro)18.6 million
compared to (euro)23.3 million as at December 31, 2007. This decrease in cash
and cash equivalents was primarily attributable to: increased working capital
requirements in connection with increased business activity; and the Company's
acquisition of 1.5 million Foraco common shares from a single foreign
shareholder for approximately (euro)3.4 million during the second quarter to
meet the Company's obligation under the free share plan and for the purpose of
potential acquisitions.

    
    Segment Revenue Performance

    (In thousands (euro))             Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    June 30,   June 30,   June 30,   June 30,
                                       2008       2007       2008       2007
                                    --------   --------   --------   --------
    Reporting segment
    -----------------
    Mining & energy                  17,893     14,012     34,308     22,584
    Water, environmental &
     infrastructure                   6,664      6,301     12,957     11,985
                                    --------   --------   --------   --------
    Total revenue                    24,556     20,313     47,265     34,569
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    Geographical region
    -------------------
    Africa                           13,875     10,925     24,508     18,820
    Europe                            2,106      1,381      4,501      2,371
    Asia Pacific                      1,925      1,939      3,137      3,432
    Americas                          6,650      6,068     15,119      9,946
                                    --------   --------   --------   --------
    Total revenue                    24,556     20,313     47,265     34,569
                                    --------   --------   --------   --------
                                    --------   --------   --------   --------
    

    Mining & Energy

    The Mining & Energy segment continued to benefit from favorable general
market conditions in the second quarter of 2008. In Africa, the Company's
significant drilling contracts in Guinea were primarily attributable to its
second quarter revenue growth in this segment. In the Americas, revenue growth
was driven by continued strong demand for the Company's services and new
drilling equipment put into operation in both Canada and the U.S.

    Water, Environment & Infrastructure

    In the Water, Environmental & Infrastructure segment, revenue increased
by 5.8% during the second quarter and 8.1% for the six-month period ended
June 30, 2008, with growth driven primarily by deep water drilling projects in
Niger.

    Currency and exchange rate

    The average exchange rate between (euro) and Canadian dollar ("C$") for
the three-month period ended June 30, 2008 was 1.58. As at June 30, 2008, the
closing (euro)/C$ exchange rate was 1.60.

    Dividend

    The Company held its Annual General Meeting of Shareholders ("AGM") on
May 13, 2008 in Marseille, France. At the AGM, shareholders approved, among
other matters, the payment of a dividend in the amount of (euro)0.014 per
share, or the equivalent of C$0.02 per share (based on the Bank of Canada noon
buying rate as of May 13, 2008 of one Euro equal to C$1.5520). The dividend
was paid to shareholders of record as at June 13, 2008.
    Foraco's Financial Statements and Management's Discussion & Analysis
("MD&A"), for the three-month and six-month period ended June 30, 2008 will be
filed on SEDAR today and will be available via Foraco's web site at
www.foraco.com.

    Notice of Conference Call and Webcast

    Management of Foraco will host a conference call today, August 8, 2008,
at 10:00 am (EDT) to discuss its 2008 second quarter financial results. You
can join the call by dialing 1-800-814-4941 or 416-644-3434. Please call in
15 minutes prior to the call to secure a line. You will be put on hold until
the conference call begins. 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 August 15, 2008 at midnight by calling 1-877-289-8525 or
416-640-1917, reference number 21278222 followed by the number sign.

    To view Foraco's Q2 financial statements, please click here:
    http://files.newswire.ca/476/ForacoQ2statements.pdf

    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 113 drilling rigs, with a presence in
18 countries across five continents. For more information about Foraco, visit
www.foraco.com.

    Caution concerning forward-looking statements

    This document 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 Annual Information Form dated March 31, 2008,
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 Foraco 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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