Foraco International announces 2009 second quarter results



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

    TORONTO and MARSEILLES, France, Aug. 11 /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 six-month periods ended June 30, 2009. All figures are
reported in Euros ((euro)), unless otherwise indicated.

    
    Q2 2009 Highlights:

    -   Revenue increased to (euro)25.1 million compared to
        (euro)24.6 million in Q2 2008.

    -   Gross profit (including depreciation as a cost of sales) increased to
        (euro)8.1 million from (euro)7.9 million in Q2 2008.

    -   Net earnings totaled (euro)3.2 million, or (euro)0.05 per share,
        compared to (euro)3.3 million, or (euro)0.06 per share, in Q2 2008.

    -   Foraco entered into an agreement to acquire a majority interest in
        Mosslake Drilling Services Pty Ltd ("Mosslake"), an Australian
        company specializing in diamond core, directional, geotechnical and
        large diameter drilling services for top tier companies in the mining
        and mineral exploration industry.

    -   On May 11, 2009, Foraco shareholders approved the payment of a
        dividend in the amount of (euro)0.014 per share. The dividend was
        paid on July 2, 2009 to shareholders of record as at June 11, 2009.
    

    "We are pleased to report that we generated a record level of revenue
during the second quarter of 2009, confirming the strength of our operating
performance and the relevance of our strategy in this depressed economic
environment," said Daniel Simoncini, Chairman and Chief Executive Officer of
Foraco. "Our acquisition of Mosslake in the quarter, marks our entry into the
Australian drilling services market, and further enhances our capability to
serve our customers throughout the entire Australasian region. We also
successfully commenced our drilling operations in northwestern Russia in the
quarter and secured a satisfactory level of new orders for projects to be
carried out in 2009 and beyond. With our recent expansion into Australia and
northwestern Russia, we have strengthened our global market presence and
further enhanced the diversity of our project mix with respect to
commodities."
    "We continue to achieve strong results in both our Mining and Water
segments. During the second quarter, we achieved strong margin performance on
our Mining contracts, despite a slight decline in activity, while increasing
our level of activity in our Water segment. Our record revenue and strong
margin performance demonstrate our commitment to delivering first class
service to our customers," said Jean-Pierre Charmensat, Vice-CEO and Chief
Financial Officer of Foraco. "Looking ahead, we will continue to carefully
monitor our operations and remain attentive to opportunities that optimize
returns on capital expenditures. After the acquisition of Mosslake, our
financial structure remains solid with net debt close to nil, providing us
with the financial flexibility to further pursue our growth strategy."

    Financial Results

    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.


    
    Revenue
                                       Three-month              Three-month
                                       -----------              -----------
                                       period ended     %       period ended
        (In thousands of (euro))       ------------     -       ------------
              (unaudited)             June 30, 2009   change   June 30, 2008
                                      -------------   ------   -------------

    Reporting segment
    -----------------
    Mining & Energy..................        17,488      -2%          17,893
    Water, Environmental &
     Infrastructure..................         7,573      14%           6,664
                                             ------     ----          ------
    Total revenue....................        25,061       2%          24,556
                                             ------     ----          ------
                                             ------     ----          ------

    Geographical region
    -------------------
    Africa...........................        14,072       1%          13,875
    Europe...........................         2,121       1%           2,106
    Asia Pacific.....................         2,991      55%           1,925
    Americas.........................         5,877     -12%           6,650
                                             ------     ----          ------
    Total revenue....................        25,061       2%          24,556
                                             ------     ----          ------
                                             ------     ----          ------
    

    For the three-month period ended June 30, 2009 ("Q2 2009"), revenue
totaled (euro)25.1 million compared to (euro)24.6 million for the three-month
period ended June 30, 2008 ("Q2 2008"). The Company's 2% revenue decrease in
the Mining segment is a direct consequence of the general slowdown in the
industry. In the Water segment, revenue increased by 14% to (euro)7.6 million,
compared to (euro)6.7 million in Q2 2008, as a result of new water projects in
Africa.
    Revenue in Asia Pacific increased to (euro)3.0 million in Q2 2009 from
(euro)1.9 million in Q2 2008. This increase is primarily attributable to the
contribution from Mosslake. Revenue in Americas decreased by 12% as a result
of the reduced activity in the mining industry. Revenue in Europe and Africa
remained stable.

    
    Gross Profit
                                       Three-month              Three-month
                                       -----------              -----------
                                       period ended     %       period ended
        (In thousands of (euro))       ------------     -       ------------
              (unaudited)             June 30, 2009   change   June 30, 2008
                                      -------------   ------   -------------

    Reporting segment
    -----------------
    Mining & Energy..................         6,071       -%           5,979
    Water, Environmental &
     Infrastructure..................         1,979       -%           1,970
                                              -----       --           -----
    Total Gross profit...............         8,070       -%           7,949
                                              -----       --           -----
                                              -----       --           -----

    Gross profit (including depreciation) was stable at (euro)8.1 million in
Q2 2009 compared to (euro)7.9 million in Q2 2008. The Company continues to
experience a high level of business activity and strong operational
performance on projects. As a percentage of revenue, gross profit remained
flat at approximately 32% in both Q2 2008 and Q2 2009.

    Operating Expenses (excluding cost of sales)

                                       Three-month              Three-month
                                       -----------              -----------
                                       period ended     %       period ended
        (In thousands of (euro))       ------------     -       ------------
              (unaudited)             June 30, 2009   change   June 30, 2008
                                      -------------   ------   -------------

    Selling and marketing expenses...           706      -5%             740
    General and administrative
     expenses........................         2,291      30%           1,751
    Other (income) and expense, net..             -      N/S             188
    Total............................         2,997      12%           2,679
                                              -----      ---           -----
                                              -----      ---           -----

    Operating expenses (excluding cost of sales) increased to (euro)3.0
million in Q2 2009 up from (euro)2.8 million in Q2 2008. This increase
reflects the strengthening of Foraco's geographical coverage in Canada and the
Company's recent expansion into Australia through the Mosslake acquisition.

    Operating Profit
                                       Three-month              Three-month
                                       -----------              -----------
                                       period ended     %       period ended
        (In thousands of (euro))       ------------     -       ------------
              (unaudited)             June 30, 2009   change   June 30, 2008
                                      -------------   ------   -------------

    Reporting segment
    -----------------
    Mining & Energy..................         3,979        -           4,026
    Water, Environmental &
     Infrastructure..................         1,094     -12%           1,243
                                              -----     ----           -----
    Total operating profit...........         5,073      -4%           5,270
                                              -----     ----           -----
                                              -----     ----           -----

    Operating profit in Q2 2009 decreased slightly to (euro)5.1 million from
(euro)5.3 million in Q2 2008 as a result of higher operating expenses other
than cost of sales.
    Net earnings in Q2 2009 decreased slightly to (euro)3.2 million, or
(euro)0.05 per share, compared to (euro)3.3 million, or (euro)0.06 in Q2 2008.

    Six months ended June 30, 2009

    -------------------------------------------------------------------------
                                        Six month                Six month
                                       period ended     %       period ended
    (In thousands Euros)              June 30, 2009   change   June 30, 2008
    -------------------------------------------------------------------------
    Revenue                                  47,436        -          47,265
    -------------------------------------------------------------------------
    Gross profit(1)                          14,558       1%          14,409
    -------------------------------------------------------------------------
    Operating expenses(2)                     5,406       7%           5,033
    -------------------------------------------------------------------------
    Operating profit                          9,152      -2%           9,376
    -------------------------------------------------------------------------
    Net earnings                              5,928        -           6,028
    -------------------------------------------------------------------------
    (1) Includes amortization and depreciation expenses
    (2) Excluding cost of sales
    

    For the six months ended June 30, 2009, consolidated revenue increased
slightly to (euro)47.4 million compared to (euro)47.3 million in the first
half of 2008. The Company experienced a 3% overall decline in its Mining
segment revenue in the first half of 2009 due to a general slowdown in the
industry. This decline in activity was most evident in the Americas, where
Foraco experienced a year-over-year revenue decline of 19%. Mining segment
revenue in Europe and Asia Pacific increased due to the Company's new project
in northwestern Russia and its acquisition of Mosslake in Australia. The
Company achieved a 10% increase in Water segment revenue in the first half of
2009.
    For the six months ended June 30, 2009, gross profit increased to
(euro)14.6 million from (euro)14.4 million in the first half a year ago.
Overall solid performance on Mining contracts during the first half of 2009
and the positive impact of the significant capital expenditure program
implemented in 2008 allowed the Company to maintain the level of gross margin.
    For the six months ended June 30, 2009, operating expenses (excluding
cost of sales) increased to (euro)5.4 million from (euro)5.0 million in the
first half of 2008. The increase in selling, marketing, general and
administrative expenses in the first half of 2009 is mainly due to the
expansion of geographical coverage as well as Australia, following the
Company's recent acquisition of Mosslake.
    For the six-month period ended June 30, 2009 operating profit decreased
by 2% to (euro)9.2 million compared to (euro)9.4 million in the first half of
2008, reflecting higher operating expenses, other than cost of sales. Net
earnings for the first half of 2009 totaled (euro)5.9 million, or (euro)0.10
per share, compared to (euro)6.0 million, or (euro)0.10 per share, in the same
period a year ago.

    Balance Sheet

    As at June 30, 2009, cash and cash equivalents totaled (euro)12.7 million
compared to (euro)13.0 million of financial debts including the consideration
payable for the remaining shares of Mosslake. Cash and cash equivalents are
mainly comprised of (euro)8.4 million of short-term deposits denominated in
(euro) and held at top-tier European financial institutions. The Company had
available short-term credit facilities of (euro)15.8 million as at June 30,
2009.

    Currency and Exchange Rate

    The average exchange rate between (euro) and C$ in Q2 2009 was C$1.59 for
(euro)1.00. The closing rate at the end of June 30, 2009 was C$1.62 for
(euro)1.00.

    Foraco's unaudited Financial Statements and Management's Discussion &
Analysis ("MD&A"), for the three and six-month periods ended June 30, 2009,
are available via Foraco's website at www.foraco.com.

    Notice of Conference Call and Webcast

    Management of Foraco will host a conference call today, Tuesday, August
11, 2009, at 10:00 a.m. (ET) to discuss its 2009 second quarter financial
results. You can join the call by dialing 1-800-732-9303 or 416-644-3422.
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 Tuesday, August 18,
2009 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number
21310908 followed by the number sign.
    To view Foraco's Q2 2009 MD&A, financial statements and notes, please
click here: http://files.newswire.ca/476/Foraco_Q2_MDA_&_Financials.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 114 drilling rigs, with a presence in
19 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, 2009,
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.





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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