Good morning, ladies and gentlemen, and welcome to the Foraco International SA Q2 2023 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I would now like to turn the conference over to Mr. Tim Bremner. Please go ahead, sir.
Thank you, Lara. Good morning, everyone. Thank you for taking the time to join us on our 2023 results conference. I am Tim Bremner, CEO of Foraco, and with me today is Fabien Sevestre, CFO. This is our first results call. We're very pleased to be with you today. As most of you know, Foraco announced this leadership transition in March 2023, which has come into effect this July 1st. Daniel Simoncini and Jean-Pierre Charmensat will remain on the board. Both Fabien and I want to take this opportunity to say thank to Daniel and Jean-Pierre, who've been at the helm of Foraco for 26 years, providing the team with solid and guidance. Fortunately, they'll not be too far away and will continue to guide the new leadership team at the board level.
The news release of these results was issued this morning prior to the opening of X through CNW Newswire. If you did not receive a copy of the release, it is available at the Foraco website, www.foraco.com. After the outline of financial results, we will open the call for your questions, moderated by Lara. We're pleased to report yet another good quarter, with revenues of just over $100 million, up 16% the same quarter last year. These results lifted our 12 months performance to $364 million revenue and $83 million, compared to $294 million revenue and $50 million EBITDA 1 year ago. We continue to experience excellent global performance of our operations. Our utilization rate on the quarter remained consistent at 59% compared to one n et profit for the quarter stands at $11 million , up 54% year-on-year.
This performance is a direct result of the dedicated confidence of our team, whom we wish to thank for their ongoing commitment and contribution. During the quarter, the outlook for our business remained largely unchanged, despite a quarter-over-quarter reduction in the IMF metal price index of 8%. We continued to experience a strong demand for our growing services, especially related to EV metals in most of our regions. Demand from our customers remains strong as we continue to work through our long-term contracts. My pleasure to now turn the call over to Fabien, who will walk us through the financials in more detail. Fabien?
Thank you, Tim, and everyone. First of all, as a reminder, we report in full IFRS and in US dollars. Revenue for Q2 2023 amounted to $100 million, compared to $86 million for the same quarter last year. 60% increase, driven by sustained demand in battery metals, gold, and water, which represents a total of 80% of our activity. Our reporting segment, mining segment, represented 88% of Q2 2023, and water represented 12%. During this quarter, South and North America were the most active regions. Revenue in South America increased by 56% to $39 million. All countries reported an increase in activity, powered by new long-term contracts with senior companies. North America revenue amounted to $13 million Q2 2023, 17% increase, driven by long-term contracts renewed last year with senior customers.
Revenue in Asia Pacific increased 20% at $17 million, reflecting quarter increase in demand and again in market share. Revenue for the quarter was $13 million, compared to $21 million in Q2 2022. The activity was stable in Europe and Africa, the activity decreased in the CIS, due to the political and economic uncertainties in the region. In Q2 2023, the geographical activity split was: North America 31%, South America 39%, EMEA 13%, Asia Pacific 17%. During this quarter, the gross margin, including depreciation cost of sales, as per IFRS, was $26 million versus $19 million for the same quarter last year, a 30% increase. Ongoing contracts reported solid performances. SG&A increased by 15% to $7 million, compared to $6 million for the same period last year. That was stable as a percentage of revenue at 7%.
EBIT was a $19 million profit versus $13 million in Q2 2022. This represent a 50% increase. The EBITDA amounted to $24 million or 24% of revenue, a 33% increase compared to $18 million in Q2 2022 or 21% of revenue. For the segment, revenue amounted to $188 million, compared to $154 million in H1 2022, a 22% increase. This increase in revenue is due to favorable market dynamics, with the company having renegotiated and extended its long-term rolling contracts since the previous year. Coupled with the companion capacity to deliver, this has generated significant growth. Revenue increased 26% in North America, 54% in South America, and 35% in Asia Pacific compared to H1 2022. Revenue decreased 32% in EMEA due to the political and economic uncertainty in CIS.
The year-to-date 2023 gross profit was $47 million versus $28 million for the same period last year. 6% improvement, mainly due to increased activity and the capacity of a company to deliver good performances on contract. Year-to-date EBIT was a positive $33 million compared to $16 million in the same period last year, 104% increase. The year-to-date 2023 EBITDA for the six-month period was a positive $43 million compared to b illion in the same period last year, a 63% increase. H1 2023, the working capital requirement was $14 million compared to $12 million for the year last year. This increase is the result of a ramp-up of activity. CapEx amounted to $14 million in cash, compared to $9 million in cash in H1 2022. CapEx is related to the acquisition of rigs, major rigs overhaul, ancillary equipment, and rods.
At June 30, 2023, our net debt, including lease obligation, amounted to $80 million versus $91 million at June 30, 2022, and $76 million at December 31, 2022. Coverage ratio improved to 0.97. We are taking advantage of our robust financial position to engage in proactive negotiations to improve the company debt and significantly reduce interest cost. I would now hand the call back to Tim for his closing remarks. Tim?
Thank you, Fabien. It was an excellent quarter indeed. We're getting a lot of positive feedback from our customers regarding their future drilling requirements for the near and medium term. Many of our long-term contracts have already been confirmed for next year. Additionally, it seems that inflation fears are diminished, as is the potential for a regional or global recession, which bodes well for our business. More than ever, the demand for the main EV metals remains strong as the world continues to responsibly address climate change. Foraco is well positioned for the future. We have a balanced business, which is the result of our strategy that is generating profitable growth. We are working to restructure our debt, that when completed, will result in substantial reduction in interest costs.
Lastly, our culture of innovation, integrity, and involvement across key markets is to provide extra value for our customers that make us their contractor of choice. Thank you everyone for your time and interest in Foraco. I'll now turn the call back to Lara, who will take the first question. Lara?
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by 1 on your touch-tone phone. Again, that's star followed by 1 on your touch-tone phone. If you would like to withdraw your request, please press star followed by 2. One moment, please, while we compile the Q&A roster. Your first question comes from the line of Steven Reeves from Ordnance Capital. Please go ahead.
Hi, Tim, how are you? Welcome, welcome as the CEO.
Hi. Hi, Steven. Thank you very much. It's a pleasure to hear from you.
Well, Daniel gave you a great foundation to build from, hopefully we can take it from here. You know, the company is doing amazing. I mean, doing better than it was back in 2012, the last time it was a cyclical high, and I think this is gonna keep on going. You know, it's very frustrating. It sounds like we're, it's like we're talking to the wind. You're gonna do $100 million in EBITDA in the next 12 months, and the stock and the, and the valuation of the equity is only $100 million, $122 million, say. I mean, I know you have debt and stuff, and I guess you're gonna address the debt, but what can we...
I mean, I know Daniel never wanted to do a US listing. We need this, we need some liquidity here. We need to be able to take advantage of the fact that we are the player for water, we're a way to play the growth in all the electric metals. We know it, it's, it's crazy. You doubled the EBITDA in the last year. The stock price is down. I just don't know how do you plan on getting this message out? I guess the key is getting rid of the debt.
Steven, we share the same concern you do, and it's a discussion that we have on our own, I assure you. Your question is a tough one, and it's also very complex to answer. First and foremost, as you know, we don't control the market, and the micro-cap market has, you know, had a fairly tough time, and that's significant. You know, we combine that with the volatility that we've seen in the metals market as well, and it creates even a tougher situation. Look, we need buyers. There's too many sellers at the moment. That's obvious.
I honestly feel that once we get the debt restructuring done, this will help norm the stock, if you know what I mean, and put us in a better position. We have our job to do as well as getting the word out, and Daniel and I are going to be doing that. And, you know, I think we're doing all of the right things. I know you and others have been exceptionally patient, and for that, we're very, very grateful. We're entirely aware of the question that you've posed and working on it diligently.
Is there any chance for a U.S. listing, or that's still out of the question?
I think that's out of the question. Well, it is out of the question at the moment because of other priorities that we've got to deal with. It is, it is a question that we get asked frequently. It is, it is... We're aware of that, but, you know, truthfully, we need to get through this financial restructuring, focus on the ongoing profitability of the business and maintain that course for now.
In your debt covenants, you can prepay the debt at your will?
Yes, we can.
Okay. It's just frustrating because I mean, you guys are doing an amazing job. I mean, you don't have to be a micro-cap with the numbers you're putting up. You know, if you were selling at 10 times earning, you'd be a billion-dollar company. I mean, it's, you don't have to be a micro-cap. You don't have to lump yourself into with companies that are losing money. I mean, you guys have solid, you have long-term contracts. You have everything. It's like you have a recurring revenue stream. I mean, you have a quite a great base to build from. You still have room in your utilization rate to grow the company.
I hate to lump ourselves into these small, micro-caps that don't have any chance at all, you know?
Well, I don't think we're in that category. But we're, you know, really, the whole segment has been overlooked, and it's just a matter of us taking the time to get the message out, and it's a grind, but it's our job, Danielle's and my job, and we do talk about that frequently. We had a good webinar this past June with a lot of participants. We're going to host another when summer holidays are over, and I'm certain that we'll have good participation then. I really think that pursuing the course that we're on is the right thing to do, to take advantage of any opportunity that we get to speak to somebody. I'm available.
I'm in Canada, which would be easy for me to arrange meetings, and we'll do so, whenever.
You I mean, you have enough cash flow to pay a lot of the debt down as you see fit. I mean, you can pay the debt down if you want to?
Yeah, there are restrictions on us at this time to pay the debt down. You know, we have been working on a debt restructuring plan. That is a priority. Even after this debt restructuring, our priority is to continue to pay that debt down. You know, we'll make, have a significant reduction in the interest cost, but that doesn't change of ongoing debt reduction even after the restructuring.
Okay. All right. Well, thank you. Just one quick... Is there a conference call tomorrow as well? It says in your press release, you have a conference call tomorrow at 10:00 A.M.
Yeah, no, that was an error. We apologize for that, we'll make certain that doesn't happen again. We appreciate you adjusting your schedule to be with us.
All right, great. Well, thank you, and hopefully, we can get this thing going in the right direction because you guys do a great job. Daniel did a great job, and it's a great company, and it's in all the right places.
Yeah, it is a great company. I've been here for 17 years with Daniel. He's been an absolute mentor, and will continue to be so. We look forward to getting this right.
All right. Well, thank you, and nice to talk to you for the first time.
Thanks, David. It's great to hear from you, too.
Thank you. Again, ladies and gentlemen, should you have a question, please press star followed by the number one on your touchtone phone. There are no further questions at this time. I'd now like to turn the call back over to Mr. Tim Bremner for any closing remarks.
Thank you, Lara. Well, everyone, we appreciate your interest in Foraco. Thank you. It was a great quarter. We look forward to speaking to you again at the Q3 conference call in late October. Thank you very much, everyone, and have a good day.
Thank you.
Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.