Foraco International reports Q2 2025

Executive Summary

• Foraco International SA reported Q2 2025 financial results showing a decline in revenue and profitability compared to the prior year, driven by program discontinuations and delays in North America and South America, partially offset by strong growth in Asia Pacific and EMEA.
• The company reported a Net Profit of US$6.0 million for Q2 2025 (down from US$7.8 million in Q2 2024) and an EBITDA of US$14.0 million (down from US$16.4 million).
• Free Cash Flow was negative US$7.1 million due to working capital requirements and capital expenditures for new contract mobilizations, while Net Debt stood at US$76.5 million.

Key Details

• Q2 2025 Revenue: US$69.1 million, a decrease from US$77.9 million in Q2 2024. At constant exchange rates, revenue decreased by US$5.8 million (-7.4%).
• H1 2025 Revenue: US$124.1 million, down from US$155.0 million in H1 2024.
• Regional Performance (Q2 2025):
  • Asia Pacific: US$24.7 million (+11% YoY), driven by proprietary rig commissioning.
  • EMEA: US$7.8 million (+47% YoY), supported by new contracts.
  • North America: US$25.3 million (-21% YoY), due to program discontinuations and delays.
  • South America: US$11.3 million (-38% YoY), impacted by mobilization phases in Chile/Argentina and client delays in Brazil.
• Profitability Metrics (Q2 2025):
  • Gross Margin: US$14.1 million (20.5% of revenue); excluding US$1.0 million in one-off reorganization costs, it was US$15.1 million (21.9%).
  • EBITDA: US$14.0 million (20.3% of revenue); excluding one-off costs, it was US$15.0 million (21.7%).
  • Net Profit: US$6.0 million (9% of revenue), compared to US$7.8 million (10%) in Q2 2024.
  • EPS: Basic US$6.43; Diluted US$6.34.
• Cash Flow & Balance Sheet:
  • Free Cash Flow: Negative US$7.1 million, primarily due to working capital needs and Capex for new deployments.
  • Net Debt: US$76.5 million (including IFRS 16), or US$69.5 million at constant FX, compared to US$78.7 million as of June 30, 2024.
  • Cash from Operations: US$21.0 million in H1 2025 (down from US$33.9 million in H1 2024).
  • Capex: US$9.8 million in H1 2025, primarily for new rigs and ancillary equipment.
• Operational Updates:
  • Rig utilization rate was 35% in Q2 2025, down from 40% in Q2 2024.
  • Foraco sold its 50% stake in Eastern Drilling Company LLP (Kazakhstan), generating a net gain of US$289 thousand.
  • SG&A expenses decreased 19% in Q2 2025 to US$4.7 million (6.8% of revenue).
  • CEO Tim Bremner noted early wins in the US, including four new contracts to be executed in H2 2025, and the relocation of over 10 rigs across continents.

Notable Quotes

• Tim Bremner, CEO: "In Q2 2025, we continued to focus on aligning our portfolio with high-potential regions and segments... While some regions face program discontinuations and delays in starting new contracts, we are seeing positive developments, with Asia Pacific achieving another robust quarter, the award of a significant long-term contract in Chile, and early wins, including four new contracts in the US to be executed in the second half of the year."
• Fabien Sevestre, CFO: "During this quarter, despite lower activity in America, we managed to maintain solid profitability supported by cost discipline and the resilient performance of our operations... The exit from Kazakhstan generated an accounting net gain of US$0.3 million. Working capital requirements, although still negative, improved significantly during the quarter, partially offsetting the impact of capital expenditures needed for new deployments."