The slow recovery in the fortunes of contract drilling services group, Boart Longyear continues apace, the company reporting solid figures yesterday for the first three months of 2019.
But the new failed to move the market and the shares ended steady on 4 cents, though that’s a good thing given the sell-off sparked by Donald Trump’s latest tariff threat against China.
The company reported 47% improvement in adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation), or up $US7 million, on overall revenues that were up 1% to $US190 million.
The company said overall revenues were flat due to discontinued operations and foreign exchange currency movements but were in part lifted by a push to reduce slow-moving inventory.
After allowing for these factors, revenue was up 8% and adjusted EBITDA jumped to $US22 million driven by what the company said were improvements in pricing, cost reductions, and productivity initiatives.
Cash from operations rose from nothing one year ago to $US3 million.
Net profit after tax was up 65% to $US11 million, with $US10 million invested back into the business.
Liquidity at March 31 was $US44 million, made up of $US30 million cash and $US14 million under an asset-based loan facility.
There was an 8% rise in revenue from its drilling business to $US132 million, with its 691 rigs being utilised an average of 41% of the time.
The global products unit brought in $US58 million, down 12%.
CEO Jeff Olsen said the Utah-based company was on target to maintain momentum for 2019, and it was working to position the company to differentiate offerings ahead of its competition, particularly its geological data services unit.
He said the company would continue to improve its relationships with customers and its own business, while also working to reduce debt and improve profitability.
“With commodity markets trending upwards, steps are being taken to deploy capital while finding new growth segments and markets,” he said.
Net debt rose 18% during the quarter to $US729 million as expected as some interest was converted the debt and the company made an accounting change that required capitalisation of around $US30 million of previously off-balance sheet operating leases.