Revenue: Moncton's Landdrill International contracts expected to generate $20 million in 2011
Inked contracts to drill more than 216,000 metres in Canada alone will generate some $20 million in revenues in 2011 - assuming work is completed - on top of a projected high demand for projects to take on out of Mexico and Mongolia, the company announced in a release.
President and CEO Ron Goguen has seen nothing like it, he said in an interview.
"I've been 30 years in the business and it's the first time I see ourselves with as many contracts as we have signed plus the amount we have to bid going forward," Goguen said.
The firm's 2009 results, released at the end of April, 2010, indicate revenues of just under $15 million, down 39 per cent from 2008's roughly $24.5 million.
"2009 was a very poor year, 2010 was a better year but we're way ahead now," he said, pointing out that last year in Canada, the firm drilled 220,000 metres; contracts signed for 216,000 metres in 2011 in Canada only takes the company to the first half of the year.
"Mexico should be probably better than double what we were in 2010. We have a lot of work to bid," Goguen said.
The executive said demand for his firm's services is driven by mineral firms being able to raise money to drill on the markets, as well as high prices for commodities.
"The price of gold has been excellent and I think that intermediate and smaller companies have been able to raise cash very well," Goguen said.
"They need to add value to their companies and they do that through drilling, getting their reserves."
For example, in Labrador where the firm drills for iron ore, there's a push on upping production by its clients, largely driven by a move towards open-pit mining - which is easier and safer than underground mining, Goguen said.
"The big thing coming in Canada is open-pit," he said.
Goguen said Landdrill is not as pressured by labour constraints as another industry player out of Moncton, Major Drilling Group International Inc. (TSX:MDI).
Major Drilling is in the middle of a hiring blitz to find drillers ahead of a season the company anticipates will be busy.
Goguen said his company is largely prepared.
"We put a big push in the last part of 2010 and we've been able to get some. But the labour market will always be tough for experienced drillers, certainly in Canada," he said.
Landdrill, which has its offices in Moncton's Caledonia Industrial Park, peaked at 240 employees globally in 2008. This year, the firm could reach 350, Goguen anticipates.
In November, the firm reported revenues for the third quarter were up by 125 per cent over revenues from the same period last year; Landdrill brought in about $11.6 million - and net income of $649,000 - for the three-month period that ended Sept. 30, 2010, compared to revenues of about $5.1 million and a net loss of $652,000 for 2009's comparable three-month period.
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