- Major Drilling Group International (TSX:MDI), a small-cap mining stock, added more than 9 per cent after reporting a profit in fiscal Q2 2024, extending its profitable streak to three-and-a-half years
- Management expects strong demand into 2024 and over the next few years spurred on by a growing shortfall in strategic minerals
- Major Drilling Group International is a global drilling service company primarily serving the mining industry
- Major Drilling Group International stock (TSX:MDI) is down by about 12 per cent year-over-year, but has added approximately 90 per cent since 2018
Major Drilling Group International (TSX:MDI), a small-cap mining stock, added more than 9 per cent after reporting a profit in fiscal Q2 2024, extending its profitable streak to three-and-a-half years.
The quarter, ended Oct. 31, was highlighted by:
- Revenue of C$207 million, the company’s highest since July 2012, which was up by 2.6 per cent year-over-year because of rising mining exploration and resource definition spending amid depleting reserves and a global push to secure supplies of battery metals
- South and Central America provided the most notable revenue support, rising by 25.9 per cent year-over-year to C$52.5 million because of battery metals demand, particularly in Chile and Argentina, offsetting a 5.7 per cent decline in North American revenue to C$106.7 million
- A gross margin of 25.3 per cent, down from 26.3 per cent year-over-year, with the company attributing the figure’s steadiness to inflationary headwinds being offset by modest price improvements
- EBITDA of C$43.6 million (C$0.53 per share), up from C$43 million (C$0.52 per share) year-over-year
- Net earnings of C$23.7 million (C$0.29 per share), up from C$23.6 million (C$0.29 per share) year-over-year
- Share repurchases of C$7.3 million for 875,268 shares
- A net cash increase of C$23.4 million during the quarter to C$84.2 million with no debt on the balance sheet. The company spent C$17.4 million on capital expenditures, including six new drills, while disposing of five less-efficient models, bringing its fleet to 602
Management expects strong demand into 2024 and over the next few years spurred on by a growing shortfall in strategic minerals like copper, uranium, nickel and lithium, each of which is essential to global decarbonization.
The company has been profitable for more than three consecutive years, beginning with net income of C$10.03 million in fiscal 2021, C$53.46 million in fiscal 2022 and C$74.92 million in fiscal 2023, followed by C$21.77 million in fiscal Q1 2024.
“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,” Denis Larocque, president and CEO of Major Drilling, said in a statement. “During the quarter, we saw our combined revenue from copper and lithium increase by 40 per cent, as compared to last year, now representing over 30 per cent of our activity, while gold represented approximately 40 per cent.”
Major Drilling Group International is a global drilling service company primarily serving the mining industry. The company boasts more than 1,000 years of combined experience and maintains field operations and offices in Canada, the United States, Mexico, South America, Asia, Africa and Australia.
Major Drilling Group International stock (TSX:MDI) is up by 7.84 per cent, trading at C$8.53 per share as of 10:06 am ET. The stock is down by about 12 per cent year-over-year, but has added approximately 90 per cent since 2018.
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