Foraco International Reports Q2 2018

TORONTO and MARSEILLE, France, Aug. 2, 2018

TORONTO and MARSEILLE, France, Aug. 2, 2018 /CNW/ - Foraco International SA (TSX:FAR) (the "Company" or "Foraco"), a leading global provider of mineral drilling services, released its unaudited financial results for the second quarter 2018 today. All amounts are denominated in US Dollars (US$) unless otherwise indicated.

"With US$46 million in revenue, Q2 2018 is our strongest quarter since Q3 2014, confirming the positive trend observed throughout 2017 and Q1 2018. This performance is primarily due to the continued growth in Canada, Russia and Australia. In other regions where we operate, the market recovery is still in its initial phase which gives us opportunities for future developments." commented Daniel Simoncini, Chairman and Co-CEO of Foraco. "Our utilization rate increased to 43% during the quarter, reaching its highest level since 2013, but still significantly below the rates reported before the industry downturn. In Q2, we are pleased to report the satisfactory performance of our contracts which confirms the agility of our organization and our ability to adapt to an increasing demand and changing environments."

"In Q2 2018, we recorded an EBITDA of US$5.2 million, a 44% increase compared to Q2 2017. We believe that we can further increase our margins through improved productivity, recovery in selling prices and a better absorption of our fixed operational costs. Despite the activity increase recorded in Q2 compared to Q1 2018, we managed to reduce our working capital requirements by US$3 million during the quarter and we are still expecting further improvements before the end of the year given the seasonal nature of our activities." added Jean-Pierre Charmensat, Co-CEO and Chief Financial Officer. "We invested US$3.5 million in CAPEX linked to new contracts and recorded a positive free cash flow during the quarter. Our net debt decreased from US$135 million as at March 31, 2018 to US$127 million as at June 30, 2018, a US$8 million improvement due to the impact of foreign exchange and to the positive free cash flow generated during the quarter."

Q2 2018 Highlights

Revenue

• Q2 2018 revenue amounted to US$ 45.7 million compared to US$ 36.6 million in Q2 2017, an increase of 25%.
• The utilization rate was 43% in Q2 2018 (40% in Q1 2018) compared to 39% in Q2 2017.

Profitability