from today's T&T
http://nbbusinessjournal.canadaeast....rticle/1461943
Upturn in activity boosts Major Drilling results
Published Wednesday December 7th, 2011
by codi wilson
Telegraph-journal
Major Drilling Group's second quarter results show record quarterly revenue and solid demand for fiscal 2012.
At the end of the fiscal quarter on Oct. 31, Moncton-based Major Drilling revenue increased 65 per cent to $213.9 million, up from $127.8 million at the end of the same quarter last year.
Net income increased to $31.6 million from $11.3 million.
"Despite the current economic environment, our industry has not shown signs of a slowdown to this point," Francis McGuire, president and CEO of Major Drilling, said during a conference call. "Most commodity prices are at relatively high levels while many of our customers are in a much better financial position than they were three years ago."
McGuire noted that he expects continued growth despite entering into what is often the weakest quarter of the year.
"Mining and exploration companies shut down, often for extended periods over the holiday season," he said. "Weather can also play an important role in affecting operations during this period and beyond.
"Typically, revenue can be reduced by a third because of these factors. Margins are also affected as we mobilize crews in and out for the holidays and as we carry out our annual repair schedules," McGuire said.
"Looking at the balance of fiscal 2012, assuming that customers continue with their stated plans, we should see continuing growth. Our ongoing efforts for training and recruitment should allow our global utilization rates to continue to improve as each month goes by and as we add more drillers."
Recruitment and training remains to be the company's greatest challenge, the CEO said.
"The shortage of experienced drill crews will put added pressure on labour costs and productivity as well," he said.
"Our biggest operational challenge continues to be the shortage of labour."
Michael Mills, a chartered financial analyst with Beacon Securities Ltd., said the company's quarter was better than he had forecast.
"It was a very strong quarter," Mills said. "It was the best quarter they have ever had in terms of sales and earnings."
"It really reflects the strength of the entire sector right now. Major is certainly benefitting from the acquisition of Bradley Group."
Major Drilling acquired Bradley Group, a drilling company based in Rouyn-Noranda, Que., at the end of September for $80 million.
Mills predicts that Major Drilling could be taking in a billion dollars annually by the end of fiscal 2013.
"(It) would make them a pretty illustrious company in terms of Atlantic Canadian companies that do north of a billion dollars in revenue," he said.
personal note - If Major Drilling is on the verge of becoming a billion dollar company, they really need to build a new office building and world HQ downtown!!