Vinmick u may get your chance
Very strong outlook, but weather conditions hurt this quarter's earnings.
Major Drilling Group International Inc. provided a market update on the outlook for drilling services.
'With strong gold and base metal prices, demand for drilling services will continue to grow through calendar 2004. Activity levels in all regions of our operations are expected to be strong,'said Mr. Francis McGuir
e, President & CEO. 'Major Drilling continues to invest heavily in making sure that it takes full advantage of the upturn. From November 2003 to this April, we will have taken delivery of 12 new UDR rigs and continue to re-condition many of our conventional rigs.'
'Demand in Australasia continues to be strong. In South and Central America, at the end of January some 43 rigs have been prepared and committed to projects as compared to 23 rigs last year. In Canada, we already have more meters of drilling under contract for the current calendar year than we drilled in all of calendar 2003,'said Mr. McGuire.
'Climatic conditions throughout the world, however, are affecting our short-term performance. In Australia, heavy seasonal rains have re-emerged for the first time in several years, impacting drilling. In addition, several projects had late starts. These factors impacted some 50 per cent of the Company's surface fleet in Australia. In Canada, severe weather conditions and client delays slowed deployment into the field resulting in a number of late starts. Many of the projects in Latin America were also delayed until late January or February. Consequently, revenues in these regions were lower than expected and costs incurred in the third quarter to prepare for many of these projects will not start to be recouped until the fourth quarter.'
'Start up and climatic difficulties can always play havoc and create volatility with our third quarter results, which are already affected by the Christmas break,'said Mr. McGuire. 'With global weather conditions and delays in start ups, we expect the loss in this year's third quarter to be in the range of $2.5 million to $3.0 million.'
'It is the nature of our business that field conditions can cause quarter to quarter volatility, particularly in quarter three. But with a very positive outlook for both gold and base metals, we would expect very strong levels of performance for the balance of the calendar year.'
Based in Moncton, New Brunswick, Major Drilling Group International Inc. is one of the world's largest metals and minerals contract drilling service companies. To support its customers'mining operations and mineral exploration activities, Major Drilling maintains operations in Canada, the United States, Europe, Latin America, and in Australia, Indonesia, Turkey, Tanzania and Mongolia.
Some of the statements contained in this release may be forward-looking statements, such as estimates and statements that describe the corporation's future plans, objectives or goals, including words to the effect that the corporation or management expects a stated condition to exist or occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ from those currently anticipated in such statements by reason of factors such as, but not limited to, changes in general economic and market conditions. Major Drilling disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.