Drilling services have reached price levels that are too low to be sustainable in the long term, said Francis McGuire, president and CEO of Major Drilling Group International (TSX: MDI), in the company’s most recent financial statements – perhaps suggesting a market bottom.
Major Drilling reported a net loss of $7.3 million, or 9¢ per share, in its most recent quarter, ended July 31.
Amidst a continuing downturn in the mining sector and lower demand for exploration and development drilling, the company saw its revenue decline 38% to $67.6 million in the first quarter of fiscal 2015, from $108.2 a year earlier. Gross margins declined to 24.7% from 38%.
“In the quarter, revenue and margins reflected the impact of the lowest pricing we have seen in 15 years,” McGuire said.
Read the complete article at NorthernMiner.com/news/drilling-prices
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