Foraco International's Q2 Performance: Challenges and Triumphs
Foraco International Reports Financial Performance
Foraco International SA (TSX: FAR) has announced its financial results for the second quarter of 2025. All figures are presented in U.S. dollars unless stated otherwise. Despite some challenges in revenue, the company continues to make significant strides in various regions and sectors.
Q2 2025 Highlights
Revenue: The company reported revenues of US$69.1 million, down from US$77.9 million in the same quarter last year. This reflects a decrease of US$5.8 million or 7.4% when adjusted for constant exchange rates.
Revenue Breakdown: The revenue performance varied across regions:
- Asia Pacific: Notably, this region achieved a record revenue of US$24.7 million, marking an 11% year-over-year growth, driven by the commissioning of proprietary rigs.
- EMEA: Revenue significantly increased to US$7.8 million, a 47% rise attributed to the initiation of key contracts.
- North America: Here, revenue declined by 21% to US$25.3 million due to delays and some program discontinuations.
- South America: The region experienced a decrease in revenue to US$11.3 million, affected by mobilization phase delays for new contracts.
Profitability Metrics
- Gross Margin: For Q2 2025, the gross margin was US$14.1 million (20.5% of revenue) compared to US$17.9 million (23.0%) in Q2 2024. Excluding one-off costs related to reorganization measures, the gross margin would be US$15.1 million (21.9%).
- EBITDA: The adjusted EBITDA for the quarter was US$14.0 million (20.3% of revenue), compared to US$16.4 million (21.0%) in Q2 2024.
- Net Profit: Reported net profit was US$6.0 million (9% of revenue) versus US$7.8 million (10%) last year.
- Free Cash Flow: The company reported a negative free cash flow of US$7.1 million.
- Net Debt: At the end of the quarter, net debt stood at US$76.5 million, compared to US$78.7 million in the previous year.
CEO and CFO Insights
Tim Bremner, CEO of Foraco, emphasized the company's strategy focused on high-potential regions and segments, underscoring their rigorous investment in proprietary rigs. On the other hand, CFO Fabien Sevestre pointed out the ability to maintain profitability despite lower activity levels, thanks to cost control and the resilience of key operations.
Looking Forward
Foraco aims to enhance its operational landscape by pursuing organic growth and targeted acquisitions. With its commitment to environmental and social governance (ESG), the company will continue to roll out advanced technology and improve efficiencies.
Frequently Asked Questions
1. What were Foraco International's total revenues in Q2 2025?
Foraco International reported total revenues of US$69.1 million in Q2 2025.
2. How did the revenues in the Asia Pacific region perform?
The Asia Pacific region recorded revenues of US$24.7 million, representing an 11% year-over-year increase.
3. What were the profitability metrics for Q2 2025?
For Q2 2025, the gross margin was US$14.1 million, EBITDA was US$14.0 million, and net profit was US$6.0 million.
4. How much did the company spend on capital expenditures?
Foraco reported capital expenditures totaling US$9.8 million in H1 2025.
5. What is Foraco's strategy moving forward?
Foraco's strategy focuses on growing services across stable jurisdictions, enhancing high-tech drilling capabilities, and improving ESG practices.
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