Foraco International Reports Q4 2017

TORONTO and MARSEILLE, France, March 5, 2018

TORONTO and MARSEILLE, France, March 5, 2018 /CNW/ - Foraco International SA (TSX:FAR) (the "Company" or "Foraco"), a leading global provider of mineral drilling services, today released its unaudited financial results for the fourth quarter and full year 2017. All figures are expressed in US Dollars (US$) unless otherwise indicated.

"We are pleased to announce that the positive trend reported over the last quarters was confirmed in Q4 with a significant volume of services to be performed in 2018 and beyond. The order book at year end exceeded US$ 200 million, a record high since 2014 and a sharp 117% increase compared to last year. Of this, US$ 128 million are expected to be realized within a year, a 78% increase compared to last year. Almost all regions contributed to this performance, led by North America," commented Daniel Simoncini, Chairman and Co-CEO of Foraco. "Q4 revenue was up 22% compared to the same quarter last year, although we have not yet detected a recovery in selling prices. FY 2017 revenue amounted to US$ 135.7 million, compared to US$ 115.2 million one year earlier, an 18% increase driven mainly by activity in countries where average revenue per rig is higher. Indeed, the utilization rate of the rigs only increased slightly (35% in FY 2017 vs 33% last year), leaving room for a further increase in revenue going forward."

"We are also pleased to report that this increase in activity benefited to our financial metrics. Our profit margin including depreciation in cost of sales is improving year on year, and represented 10.4% of revenue in FY 2017, a significant improvement compared to last year (3.9% of revenue). Our FY 2017 EBITDA came to US$ 12.1 million versus US$ 7.0 million last year," added Jean-Pierre Charmensat, Co-CEO and Chief Financial Officer. "We managed to maintain our working capital requirement at close to nil, and invested US$ 9.5 million in CAPEX in FY 2017, adding five underground rigs to our fleet to serve newly-acquired contracts. Free cash flow before debt servicing was a positive US$ 2.2 million in FY 2017. Our focus on cost control and our remarkably improved order book will result in continued improvement of cash generation."

Three months Q4 2017 Highlights

Revenue

• Q4 2017 revenue amounted to US$ 35.0 million compared to US$ 28.7 million in Q4 2016, an increase of 22%. Mining activity increased by 32%, whereas the water activity decreased by 48%. Some long-term contracts in the water segment were completed during the last quarter of 2016.

Profitability