PARIS: Foraco International SA (TSX:FAR) (the “Company” or “Foraco”), a leading global provider of mineral drilling services, today reported unaudited financial results for its third quarter 2016. All figures are reported in US Dollars (US$), unless otherwise indicated.
“During the quarter, we continued to suffer from low prices and had to cope with the postponement or temporary suspension of certain contracts, and this impacted again our level of activity and thus our financial performance.” said Daniel Simoncini, Chairman and co-CEO of Foraco. “We enter now into the bidding season and for the first tendered jobs, we observed a significant increase of the duration of the proposed contracts. We view this as an indicator of regained confidence and visibility from clients. The next months will tell us if the annual drilling volumes will also be on the rise, which – if confirmed – will mark the turning point of the drilling market trend. We are also pleased to report the positive development of certain niche services offering new technically complex resources with higher added value, in underground and directional drilling. We dedicate the majority of our development capex to such niche markets.
“Despite the continuing global adverse market conditions, the Company managed to maintain a positive EBITDA for the quarter and the first nine months of 2016. Focus continues to be placed on cash management as working capital requirements increased due to the mobilization of contracts and extended terms of payments from certain clients” commented Jean-Pierre Charmensat, co-CEO and Chief Financial Officer. “As agreed in 2015, we met with our French lenders to resume discussions regarding the future of the credit facilities granted and new requirements for upcoming years. Our objective is to finalize the negotiations during the fourth quarter.”
