Thanks for reading my post. I do think the margins are sustainable. I'm not sure about every quarter but I think over the next 2-3 years we will have similar or slightly better gross and EBITDA margins as the last two years. The increase was driven mainly by better utilization of the rigs. Though the total fleet count hasn't increased they have increased the number of rotary rigs that have higher rates. They do have a small exposure to juniors and the market has been soft for them. There is usually a delay in the softer market before it hits the financials so there may not be as much revenue growth in 2024 vs 2023. But I am not sure about how impactful that will be.
Thanks. This is like the 3rd or 4th company in Australia that look interesting. Really need to open an Interactive Brokers account so I can buy on that exchange.
Nice timing on the write-up!
To what extent do you think the margins from the last two years are sustainable? What has driven the increase in margins?
Thanks for reading my post. I do think the margins are sustainable. I'm not sure about every quarter but I think over the next 2-3 years we will have similar or slightly better gross and EBITDA margins as the last two years. The increase was driven mainly by better utilization of the rigs. Though the total fleet count hasn't increased they have increased the number of rotary rigs that have higher rates. They do have a small exposure to juniors and the market has been soft for them. There is usually a delay in the softer market before it hits the financials so there may not be as much revenue growth in 2024 vs 2023. But I am not sure about how impactful that will be.
Dean
Interesting company, thanks for sharing the write-up.
Might be interesting for you to look at Vysarn, it's a water drilling company in Australia with interesting plans for future growth.
Thanks. This is like the 3rd or 4th company in Australia that look interesting. Really need to open an Interactive Brokers account so I can buy on that exchange.