Geodrill Q2 2024 Update - $GEO.to

Quick update after Q2 2024

*Disclosure: I own shares in GEO.to. I am not a professional. Please do your own due diligence.

Price: $2.74 CAD / $1.95 USD

MC: 99.4 million USD

EV: 99 million USD

1 year performance: +3%

GEO reported this morning and held a call. Results were ahead of my expectations and the stock was up 14% for the day.

*all numbers are in USD unless stated otherwise

Quarter Recap

• Revenue came in at 41.2 million vs 32.6 million last year.

• EBITDA came in at 10.7 million vs 6.2 million last year.

• Receivable condition continues to improve.

• Reached 17.5 million hours LTI (long term injury free).

• Ended the quarter with 91 rigs.

Call Notes

• They sounded confident in overall growth for the next 3-5 years.

• Margins were higher than they expected.

• Rig utilization is trending as expected.

• It sounded like the contract shift to focus more on majors and less exploratory drilling are not as lucrative, but they have substantially less receivable risk.

• Sounds like at some point they will reinstitute the dividend. I’m assuming later this year or early next year.

Valuation

Currently trading 3.7x EV/EBITDA. I think they are closer to 3x EV/EBITDA once they work through the tougher comps.

Closing Thoughts

I am not reading into the quarter as it is seasonally their strongest and the timing of Easter and the wet season make the quarters lumpy. Looking at ttm numbers is a better indicator of the business in my opinion.

The receivable position looks stronger than the last 2 quarters.

I think there is some multiple re-rating if gold and microcaps come back into favor.

I continue to hold my position here.

Thanks for reading.

Dean

* long GEO.to