Major Drilling Achieves Highest Revenue in More Than Ten Years; Strong Cash Generation Drives Share Repurchases
Major Drilling, a leading global drilling company, has announced its highest revenue in over ten years, driven by strong demand from copper and battery metal customers. The company’s focus on diversification has paid off, with growth from its South American operations offsetting a decline in North American revenue.
Denis Larocque, President and CEO of Major Drilling, expressed optimism about the company’s performance. He stated, We continued to see strength in our business as the increase in demand from copper and battery metal customers more than offset the slowdown in exploration from junior gold companies. Larocque highlighted the significant increase in revenue from copper and lithium, which grew by 40% compared to the previous year and now account for over 30% of the company’s activity. Gold represented approximately 40% of their revenue.
In addition to the impressive revenue figures, Major Drilling also demonstrated strong financial results. Ian Ross, the company’s CFO, stated, The Company delivered excellent financial results in the quarter with EBITDA of $43.6 million amidst a backdrop of challenging macro-economic factors. Major Drilling’s lean structure and debt-free balance sheet enabled them to generate a robust cash flow of $23.4 million, leading to a net cash position of $84.2 million.
The company plans to utilize its cash reserves to modernize and optimize its fleet and support equipment. Ross emphasized the importance of investing in their equipment to differentiate themselves in an industry that has seen a lack of investment over the years. Major Drilling allocated $17.4 million for capital expenditures in the quarter, including the acquisition of six new drills. Simultaneously, they disposed of five older and less efficient drills, bringing their total fleet count to 602.
The news of Major Drilling’s achievements is likely to impress investors and shareholders. The company’s strong financial performance and emphasis on modernizing their equipment showcase a commitment to long-term growth and sustainability.
The drilling industry has faced various challenges in recent times, including the global economic slowdown. However, Major Drilling’s ability to adapt to changing market dynamics and capitalize on opportunities has enabled them to maintain a strong position in the industry. With their global diversification strategy and focus on emerging sectors like battery metals, Major Drilling appears well-positioned for continued success.
As Major Drilling continues to generate significant revenue and strengthen its financial position, shareholders can anticipate the company’s commitment to driving value. Through share repurchases, Major Drilling aims to reward its investors and instill confidence in the company’s future performance.
The positive news from Major Drilling is a testament to the resilience and adaptability of the company. With its strategic approach and strong financial foundation, Major Drilling is poised to thrive in an ever-evolving global market.
