Orbit Garant Drilling Reports Fiscal 2021 Third Quarter Financial Results

̶  Revenue growth reflects increased drilling activity in Canada and West Africa, and stronger profitability driven by improved operational efficiencies  ̶ 

VAL-D’OR, QC, May 12, 2021 /CNW/ – Orbit Garant Drilling Inc. (TSX: OGD) (“Orbit Garant” or the “Company”) today announced its financial results for the three-month (“Q3 2021”) and nine-month periods ended March 31, 2021. All dollar amounts are in Canadian dollars unless otherwise stated.

Q3 2021 Financial Highlights

($ amounts in millions,

except per share amounts)

Three months ended
March 31, 2021

Three months ended
March 31, 2020

Nine months ended
March 31, 2021

Nine months ended
March 31, 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”.

“Our financial performance improved year-over-year in the third quarter, as we drilled more metres in Canada and West Africa and benefited from improved operational efficiencies and cost reduction initiatives,” said Eric Alexandre, President and CEO of Orbit Garant. “Our drilling activities in both Canada and West Africa have now either returned to, or surpassed, pre-pandemic levels. While our drilling activity remains below our pre-pandemic levels in Chile, we are seeing demand ramp up in this market as well. During the quarter, we commenced new long-term contracts with a major copper producer in Chile and a major gold producer in Guinea, which are reflected in our increased mobilization costs, including the expansion of our drill fleet in West Africa.”

“The current high level of demand in Canada is presenting challenges in sourcing enough experienced drillers and support personnel in our domestic operations, so we are being more selective on any new projects in Canada. We do not expect a shortage of experienced drillers in our international operations,” continued Mr. Alexandre. “We are encouraged by the strong increase in customer demand we are experiencing across our operations and we believe this positive momentum will continue to be supported by the strength of gold and copper prices, and as macroeconomic conditions continue to stabilize.”

Third Quarter Results

Revenue for Q3 2021 totalled $40.5 million, an increase of 12.5% compared to $36.0 million for the three-month period ended March 31, 2020 (“Q3 2020”). Canada revenue totalled $31.1 million in the quarter, compared to $28.6 million in Q3 2020. The Company’s drilling activities in Canada have returned to pre-pandemic levels following a gradual ramp-up that began in the latter half of the Company’s fiscal 2020 fourth quarter. International revenue increased to $9.4 million in Q3 2021, from $7.4 million in Q3 2020. The increase in International revenue reflects increased drilling activity in Burkina Faso and Guyana, and the commencement of a new drilling project in Guinea, partially offset by a decline in drilling activity in Chile and Argentina.

Orbit Garant drilled a total of 431,370 metres in the quarter, a 20.3% increase from the 358,580 metres drilled in Q3 2020. The Company’s average revenue per metre drilled in Q3 2021 was $92.90, compared to $100.26 in Q3 a year ago. The decline in average revenue per metre drilled is primarily attributable to a lower proportion of specialized drilling activity, and a change in the Company’s revenue mix due to increased drilling activity in West Africa.

Gross profit for Q3 2021 increased to $3.2 million, or 7.8% of revenue, compared to $1.3 million, or 3.5% of revenue, in Q3 2020. Depreciation expenses totalling $2.2 million are included in the cost of contract revenue for Q3 2021, compared to $2.4 million in Q3 a year ago. Adjusted gross margin, excluding depreciation expenses, was 13.1% in Q3 2021, compared to 10.2% in Q3 2020. The Company’s gross profit and margins in Q3 2021 were positively impacted by improved operational efficiencies and cost reduction initiatives, which offset the additional logistical challenges and related costs due to COVID-19, and significant mobilization costs in West Africa and Chile for important, new long-term contracts.

General and administrative (“G&A”) expenses were $3.7 million, or 9.0% of revenue, in Q3 2021, compared to $4.0 million, or 11.1% of revenue, in Q3 2020. The decline in G&A expenses primarily reflects cost reduction measures that were implemented following the onset of the pandemic.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased to $3.6 million in Q3 2021, compared to $0.4 million in Q3 2020. Net earnings for Q3 2021 were $0.7 million, or $0.02 per share, compared to a net loss of $3.4 million, or $0.09 per share, in Q3 a year ago. The positive variances reflect improved gross margins, resulting from improved operational efficiencies and cost reduction initiatives, and the reversal of the provision for litigation in Burkina Faso, which were partially offset by mobilization costs, as described above.

During Q3 2021, Orbit Garant’s financing activities resulted in a $3.2 million increase in debt and lease liabilities, compared to an increase of $0.7 million in Q3 2020.

The Company withdrew a net amount of $3.1 million during Q3 2021 on its Credit Facility, compared to a withdrawal of $1.5 million in Q3 last year. 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 $24.7 million as at March 31, 2021, compared to $28.7 million as at June 30, 2020, a decrease of $4.0 million.

On March 8, 2021, the Company and National Bank of Canada Inc. entered into a Fourth Amended and Restated Credit Agreement in respect of the Credit Facility. Pursuant to the Fourth Amended and Restated Credit Agreement, the Credit Facility consists of a $35.0 million revolving credit facility and a US$5.0 million revolving credit facility guaranteed by Export Development Canada. The current term of the Credit Facility expires on November 2, 2022.

In February 2021, Orbit Garant Chile S.A. entered into a financing agreement with Banco Scotiabank for a total of approximately $2.6 million in order to purchase the office building that it had rented for several years in Santiago. This agreement bears interest at a rate of 3.3% per annum and has a term of 84 months.

As at March 31, 2021, the Company’s working capital was $59.4 million ($52.1 million as at June 30, 2020) and 37,021,756 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.

As previously disclosed, in June 2020, a claim by a financial institution for damages against a subsidiary of Orbit Garant in the amount of approximately $1.90 million was confirmed by a court in Burkina Faso. The Company vigorously disputed this claim and filed an appeal. Nonetheless, given the original claim was confirmed by the court in Burkina Faso, Orbit Garant recorded a provision of approximately $1.96 million in its fiscal 2020 fourth quarter for this claim.

On April 1, 2021, an appeal court ruled in Orbit Garant’s favour and overturned the original decision, resulting in the release of $1.93 million that the Company had deposited into a restricted cash account of which $0.39 had already been released during Q3 2021. Notwithstanding the decision of the court, the claimant has appealed this decision. Based on the assessment of the Company’s legal counsel, management considers this appeal to be unfounded. As a result, the recognized liability of $1.96 million was reversed during Q3 2021.

Orbit Garant’s unaudited interim consolidated financial statements and management’s discussion and analysis for Q3 2021 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 Thursday, May 13, 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: 770936 #. The replay will be available until May 20, 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)

3 months ended
March 31, 2021

3 months ended
March 31, 2020

9 months ended
March 31, 2021

9 months ended
March 31, 2020

Net earnings (net loss) for the period






Finance costs





Income tax expense (recovery)





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)

3 months ended
March 31, 2021

3 months ended
March 31, 2020

9 months ended
March 31, 2021

9 months ended
March 31, 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 227 drill rigs and more than 1,100 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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