The following is a summary of the Major Drilling Group International Inc. (MJDLF) Q2 2024 Earnings Call Transcript:
Financial
Highest revenue in a decade, Q2 revenue of $207 million, up 3% YoY.
Steady gross margin at 31% YoY.
Improvement in foreign exchange loss by $200,000 YoY.
Slight increase in EBITDA to $43.6 million.
Major capital expenditure of $17.4 million, yet net cash up by $23.4 million.
Spent $7.3 million on share buyback, cancelling over 875,000 shares.
Business
Increased revenue from copper and lithium, 30% of operations; gold dominates at 40%.
South American operations generating higher revenue than North American.
Rising global demand driving copper investment emphasis.
Added six new drill rigs; decommissioned five, maintaining industry dominance.
Anticipating a busy fiscal year 2024, high capital expenditure budget of $80 million.
Implemented financial risk protection in Argentina.
Financial Performance:
Major Drilling achieved its highest revenue in over a decade, reporting Q2 revenue of $207 million, a 3% increase YoY.
Gross margins remained steady at 31% year-over-year.
A foreign exchange loss of $900,000 was noted, an improvement from the loss of $1.1 million in the same period last year.
EBITDA slightly increased to $43.6 million compared to last year's $43 million.
Major capital expenditures of $17.4 million were made. Despite this, the company increased its net cash position by $23.4 million, ending the quarter with a total of $84.2 million.
The company repurchased and cancelled over 875,000 shares, spending $7.3 million on its share buyback program.
Business Progress:
Revenue from copper and lithium increased by 40% YoY, representing over 30% of the company's operations, while gold still accounts for 40% of revenue.
Refined operations in South America witnessed higher generation of revenue than the North American segment.
The ongoing demand for most mineral commodities is expected to remain strong, feeding into the company's revenue.
Emphasis on copper investment is anticipated due to increasing global demand for electrification.
The company added six new drill rigs to its fleet, whilst decommissioning five older ones, maintaining its position as the operator and employer of choice in the industry.
Major Drilling anticipates a busy fiscal year in 2024 and has set a higher capital expenditure budget of $80 million, showing readiness to benefit from a potential upturn in mining.
The company has implemented hedging in Argentina to protect itself from financial risks, indicating sound business management.
More detailed: MAJOR DRILLING GROUP INTL INC IR
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