Orbit Garant Drilling Inc. (TSX: OGD) reported record fourth-quarter revenue, yet profitability weakened as the company absorbed ramp-up costs and inflation, posting a net loss for the period.
The oilfield services provider said fiscal 2026 fourth-quarter revenue rose 21.3% to CAD 57.2 million, supported by demand in Canada and South America. Full-year revenue increased 7.5% to CAD 203.2 million.
Gross profit, however, declined to CAD 4.6 million from CAD 7.6 million a year earlier. Gross margin fell to 8.2% from 16.4%, while adjusted gross margin dropped to 13.6% from 20.2%. Adjusted EBITDA fell to CAD 3.6 million from CAD 5.5 million. The company recorded a net loss of CAD 1.9 million, compared with net earnings of CAD 2.2 million in the prior-year period. Diluted loss per share was CAD 0.05.
CEO Daniel Maheu pointed to higher drill rig utilization—70%, the highest since fiscal 2012—as a factor behind lower drilling efficiency in Canada and increased training expenses. The firm also faced inflation in production costs and drilling consumables, alongside lower revenue per meter on certain legacy contracts signed early in the year.
Longer-term, the company secured a contract expected to generate more than CAD 100 million over its initial term. Operations will scale from two rigs currently to eight additional rigs by June 2027, with ramp-up costs and reduced margins expected to persist through the third quarter of fiscal 2027.
Full-year adjusted gross margin came in at 14.7%, down from 19.5% in fiscal 2025, and adjusted EBITDA fell to CAD 13.7 million from CAD 21.7 million. Net loss for the full year was CAD 1.5 million versus net earnings of CAD 7.5 million previously. Long-term debt rose to CAD 23.7 million from CAD 14.0 million a year earlier, partly reflecting draws on a credit facility and a new term loan tied to the expanded contract.
Management indicated that contract price increases implemented earlier in the year will flow through progressively during the first two quarters of fiscal 2027, with roughly half of contracts reaching new pricing levels by December 2026. Capital spending is projected at CAD 19.3 million for fiscal 2027, including CAD 6.3 million for the new long-term contract. Working capital is expected to use approximately CAD 10 million, primarily for inventory. The company anticipates a return to profitability in fiscal 2027.
Shares fell 12.7% to $1.10 in post-market trading from $1.26, leaving the stock within its 52-week range of $0.91 to $2.48.
