Orbit Garant Drilling Reports Fiscal 2022 First Quarter Financial Results

̶  Continued year-over-year growth in revenue and metres drilled reflects increased capacity utilization to meet strong customer demand  ̶ 

VAL-D’OR, QC, Nov. 11, 2021 /CNW/ – Orbit Garant Drilling Inc. (TSX: OGD) (“Orbit Garant” or the “Company”) today announced its financial results for the three-month period ended September 30, 2021 (“Q1 2022”). All dollar amounts are in Canadian dollars unless otherwise stated.

Financial Results Summary

($ amounts in millions,

except per share amounts)

Three months ended
September 30, 2021

Three months ended
September 30, 2020




Gross Profit



Gross Margin (%)



Adjusted Gross Margin (%)¹






Net earnings (loss)



Net earnings (loss) per share

       – Basic and diluted



Total metres drilled



1 Adjusted Gross Margin is a non-IFRS financial measure and is defined as Gross Profit excluding depreciation expenses. See “Reconciliation of Non-IFRS financial measures”.

2 EBITDA is a non-IFRS financial measure and is defined as earnings before interest, taxes, depreciation, and amortization. See “Reconciliation of Non-IFRS financial measures”.

“We achieved record first quarter revenue and metres drilled. Our continued year-over-year growth in revenue and metres drilled reflects the increased capacity utilization of our drill fleet as we strive to meet this high level of customer demand,” said Eric Alexandre, President and CEO of Orbit Garant. “Similar to last quarter, our margins were impacted by increased driller training, project ramp-up and mobilization costs. This quarter we also absorbed higher costs for materials and supplies due to supply chain issues, which are currently impacting the entire global economy. We expect our margins to expand over the course of the fiscal year as driller productivity improves, short-term mobilization costs fall away, and we offset cost pressures through contract price increases. We expect supply chain issues to be largely resolved by early 2022.”

“We are encouraged by our positive business outlook. Gold and copper prices remain strong, and our customers are signalling that they will maintain high levels of exploration and development spending in their budgets for the 2022 calendar year,” added Mr. Alexandre. “We will continue to focus on margin enhancement as we adapt to this sustained high level of business activity.”

First Quarter Results

Revenue for Q1 2022 totalled $50.6 million, an increase of 41.9% compared to $35.6 million for the three-month period ended September 30, 2020 (“Q1 2021”), reflecting an increase in drilling activities in Canada and internationally. Canada revenue totalled $37.9 million in the quarter, an increase of 20.7% compared to $31.4 million in Q1 2021, reflecting strong domestic demand for the Company’s drilling services. International revenue increased to $12.7 million in Q1 2022, from $4.2 million in Q1 2021, reflecting increased drilling activities.

Orbit Garant drilled 463,755 metres in the quarter, an increase of 32.0% compared to 351,373 metres drilled in Q1 2021. The Company’s average revenue per metre drilled in Q1 2022 was $108.46, compared to $100.51 in Q1 a year ago. The increase in average revenue per metre drilled is primarily attributable to improved pricing in Canada on drilling activities du to increase of customer demand, partially offset by a lower proportion of specialized drilling activity.

Gross profit for Q1 2022 was $3.8 million, or 7.4% of revenue, compared to $8.7 million, or 24.6% of revenue, in Q1 2021. Depreciation expenses totalling $2.5 million are included in the cost of contract revenue for Q1 2022, compared to $2.4 million in Q1 a year ago. Adjusted gross margin, excluding depreciation expenses, was 12.3% in Q1 2022, compared to 31.3% in Q1 2021. The Company’s gross profit and margins in Q1 2022 were negatively impacted by increased driller training and project ramp-up costs in Canada due to rapid growth in customer demand, and significant mobilization costs related to new, long-term contracts in Guinea and Chile. The Company is also experiencing supply chain disruptions in all of the regions in which it operates, which has resulted in cost inflation for materials and supplies and has negatively impacted gross margins. In addition, the cost of contract revenue was reduced by $2.4 million in Q1 2021 as a result of financial support recorded from the Canada Emergency Wage Subsidy (“CEWS”) program. The Company was no longer eligible for the program in Q1 2022.

General and administrative (“G&A”) expenses were $3.8 million, or 7.4% of revenue, in Q1 2022, compared to $3.2 million, or 9.1% of revenue, in Q1 2021. The increase in G&A expenses in Q1 2022 reflects increased drilling activities and revenues. G&A expenses were reduced by $0.2 million in Q1 2021 due to financial support recorded from the CEWS program. The Company was no longer eligible for the program in Q1 2022, as noted above.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) totalled $2.7 million in Q1 2022, compared to $8.4 million in Q1 2021. Net loss for Q1 2022 was $1.3 million, or $0.04 per share, compared to net earnings of $3.5 million, or $0.09 per share, in Q1 a year ago. The negative variances were primarily attributable to increased driller training and project ramp-up costs, new project mobilization costs and the reduction of financial support from the CEWS program, partially offset by increased drilling activities.

Liquidity and Capital Resources

The Company withdrew a net amount of $1.4 million during Q1 2022 on its Credit Facility, compared to a repayment of $2.1 million in Q1 2021. The Company’s long-term debt under the Credit Facility, including US$1.0 million ($1.3 million) drawn from the US$5.0 million revolving credit facility and the current portion, was $25.7 million as at September 30, 2021, compared to $24.3 million as at June 30, 2021. The debt was used to support working capital requirements and the acquisition of capital assets, property, plant and equipment.

As at September 30, 2021, the Company’s working capital was $53.5 million ($54.0 million as at June 30, 2021) and 37,372,756 common shares were issued and outstanding. Orbit Garant’s working capital requirements are primarily related to the funding of inventory and the financing of accounts receivable.

Orbit Garant’s unaudited interim consolidated financial statements and management’s discussion and analysis for Q1 2022 are available via the Company’s website at or SEDAR at  

Conference Call

Eric Alexandre, President and CEO, and Daniel Maheu, CFO, will host a conference call for analysts and investors on Friday, November 12, 2021 at 10:00 a.m. (ET). The dial-in numbers for the conference call are 416-764-8688 or 1-888-390-0546. A live webcast of the call will be available on Orbit Garant’s website at:

To access a replay of the conference call, dial 416-764-8677 or 1-888-390-0541, passcode: 135909 #. The replay will be available until November 19, 2021. The webcast will be archived following conclusion of the call.


Financial data has been prepared in conformity with IFRS. However, certain measures used in this discussion and analysis do not have any standardized meaning under IFRS and could be calculated differently by other companies. The Company believes that certain non-IFRS financial measures, when presented in conjunction with comparable IFRS financial measures, are useful to investors and other readers because the information is an appropriate measure to evaluate the Company’s operating performance. Internally, the Company uses this non-IFRS financial information as an indicator of business performance. These measures are provided for information purposes, in addition to, and not as a substitute for, measures of financial performance prepared in accordance with IFRS.

Net earnings (loss) before interest, taxes, depreciation and amortization.

Adjusted gross profit:
Contract revenue excluding operating expenses. Operating expenses comprise material and service expenses, personnel expenses, other operating expenses, excluding depreciation.


Management believes that EBITDA is an important measure when analyzing its operating profitability, as it removes the impact of financing costs, certain non-cash items and income taxes. As a result, Management considers it a useful and comparable benchmark for evaluating the Company’s performance, as companies rarely have the same capital and financing structure.

Reconciliation of EBITDA


(in millions of dollars)

Three months ended

September 30, 2021

Three months ended

September 30, 2020

Net earnings (loss) for the period




Finance costs



Income tax expense



Depreciation and amortization






Adjusted Gross Profit and Margin

Although adjusted gross profit and margin are not recognized financial measures defined by IFRS, Management considers them to be important measures as they represent the Company’s core profitability, without the impact of depreciation expense. As a result, Management believes they provide a useful and comparable benchmark for evaluating the Company’s performance.

Reconciliation of Adjusted Gross Profit and Margin 


(in millions of dollars)

Three months ended

September 30, 2021

Three months ended

September 30, 2020

Contract revenue 



Cost of contract revenue (including depreciation) 



    Less depreciation



Direct costs



Adjusted gross profit



Adjusted gross margin (%) (1)



 (1)  Adjusted gross profit, divided by contract revenue X 100

About Orbit Garant

Headquartered in Val-d’Or, Quebec, Orbit Garant is one of the largest Canadian-based mineral drilling companies, providing both underground and surface drilling services in Canada and internationally through its 220 drill rigs and approximately 1,500 employees. Orbit Garant provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production. The Company also provides geotechnical drilling services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies. For more information, please visit the Company’s website at

Forward-looking information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Orbit Garant Drilling Inc. (the “Company”) and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Risks and uncertainties that could cause actual results, performance or achievements to differ materially include the ability of the jurisdictions in which the Company operates to manage and cope with the implications of COVID-19, the impact of measures taken by such jurisdictions to control the spread of COVID-19 on the Company’s operations, the economic and financial implications of COVID-19 to the Company, including its impact on cash flows, liquidity and the Company’s compliance with its obligations under its borrowing agreements as well as the risks and uncertainties are discussed in the Company’s regulatory filings available at There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by applicable securities laws.

SOURCE Orbit Garant Drilling Inc.

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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