AKITA announces second quarter results with net income of $2.3 million, debt repayment of $10 million and commencement of a normal course issuer bid

Executive Summary

• AKITA Drilling Ltd. reported a reversal to profitability for Q2 2025, posting a net income of $2.3 million compared to a loss of $0.5 million in the prior year period.
• The company achieved significant deleveraging, reducing total debt to $39.7 million (from $52.4 million in Q2 2024), which triggered the initiation of a Normal Course Issuer Bid (NCIB) to return capital to shareholders.
• US operations drove strong growth with a 40% increase in operating days and a 36% rise in adjusted revenue, while Canadian operations maintained stable margins despite higher activity levels.

Key Details

• Consolidated Financials (Q2 2025 vs Q2 2024):
  • Net Income: $2.3 million (vs. $(0.5) million loss).
  • Revenue: $49.6 million (up 29% from $38.3 million).
  • Adjusted Funds Flow from Operations: $9.9 million (up 54% from $6.4 million).
  • Net Cash from Operations: $18.2 million (up 67% from $10.9 million).
  • Working Capital Release: $11.5 million (vs. $7.0 million in prior year).
  • Total Debt: $39.8 million (down 24% from $52.4 million).
  • Debt to EBITDA Ratio: 0.53:1.
• Canadian Drilling Division:
  • Operating Days: 490 (up 4% from 473).
  • Adjusted Revenue: $18.0 million (down 2% from $18.4 million).
  • Adjusted Operating Margin: $4.4 million (essentially flat).
  • Utilization: 32% (up from 31%).
  • Rig Count: 17.
  • Note: Adjusted operating margin per operating day decreased to $8,896 due to the absence of a profitable labor contract active in 2024; excluding this, margin per day increased 4% YoY.
• United States Drilling Division:
  • Operating Days: 875 (up 40% from 623).
  • Adjusted Revenue: $33.9 million (up 36% from $24.9 million).
  • Adjusted Operating Margin: $9.8 million (up 42% from $6.9 million).
  • Utilization: 65% (up from 46%).
  • Rig Count: 15.
  • Note: Adjusted revenue per operating day decreased to $38,706 (down 3%) due to pricing pressure and a one-time drill pipe revenue inclusion of $1.1 million.
• Capital Return Strategy:
  • The company announced the commencement of a Normal Course Issuer Bid (NCIB) effective August 6, 2025, as the first step in its return of capital strategy, enabled by the achievement of internal leverage thresholds.

Notable Quotes

• "We have made significant progress in de-leveraging the Company over the past three years, reducing debt from $95 million at March 31, 2022 to $39.7 million at June 30, 2025. We are pleased with this accomplishment and appreciate our shareholders' patience during this deleveraging phase. We are excited to announce the launch of an NCIB as the first step to return value to our shareowners." — Colin Dease, President and CEO