Canadian drilling services company, Geodrill, has responded to an anticipated third-quarter loss by pausing its dividend, a move that led to a significant 27% drop in its share price to 1.73 Canadian dollars per share today. The expected loss is linked to an unaudited noncash credit loss provision of approximately $3.6 million pre-tax, associated with aging trade receivables from specific clients.
The firm's operations have seen a downturn in key regions such as West Africa and South America, leading to projected revenues nearing $30 million. This forecast signals a decline from the previous year's Q3 revenue of $35.2 million.
The company's board has indicated plans to reassess the dividend suspension in 2024. This decision comes as Geodrill navigates through the financial implications of its anticipated losses and decreased revenues.
InvestingPro Insights
In light of the recent developments with Geodrill, InvestingPro's data and tips provide some valuable insights. With a market cap of 1880M USD, the company's price to earnings (P/E) ratio stands at -19.75, suggesting the market's expectations of future earnings growth. Despite the current downturn, the company has a perfect Piotroski Score of 9, indicating a strong financial health.
InvestingPro Tips highlight that Geodrill has been consistently increasing its earnings per share and has managed to raise its dividend for four consecutive years, until the recent pause. On a positive note, the company's liquid assets exceed its short term obligations, which could be a crucial factor in weathering the current financial storm.
Lastly, it's worth noting that Geodrill's net income is expected to grow this year, according to InvestingPro's analysis. This, coupled with the fact that analysts predict the company will be profitable this year, could signal a potential turnaround for Geodrill. For more detailed insights and additional tips, consider exploring InvestingPro's extensive database.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.