Good morning, ladies and gentlemen, and welcome to Orbit Garant Drilling 2025 third quarter results conference call. At this time, all lines are in listen-only mode. Following management's remarks, 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. Please be aware that certain information discussed today may be forward-looking and that actual results could differ materially. Certain non-IFRS financial measures will also be discussed. Please refer to the company's SEDAR filings for additional information on both risk factors and non-IFRS measures. This call is being recorded on Thursday, May 8 2025. I would now like to turn the conference over to Mr. Daniel Maheu, President and CEO of Orbit Garant. Please go ahead, sir.
Thank you, Operator, and good morning, ladies and gentlemen. With me on the call is Pierre-Luc Laplante, Chief Financial Officer. Following my opening remark, Pierre-Luc will review our financial result in greater detail, and I will conclude with comments on our outlook. We will then welcome questions. We generate revenue growth of 3.9% in the quarter compared to Q3 last year. This increase was driven by increased drilling activity in South America, which more than offsets our slower activity in Canada. Our adjusted EBITDA and net earnings also increased compared to Q3 a year ago, reflecting improved profitability in our South American operation, as well as a foreign exchange gain. Our fiscal third quarter is typically the slowest period of the year for our Canadian operation. January is a relatively slow month, and there is a gradual ramp-up of drilling activities each year after a shutdown during the holiday season.
Challenging winter weather also affects our operation during Q3. This year, we also experienced lower demand for surface drilling projects in the quarter compared to Q3 last year, which impacted our margins. However, customer demand for underground drilling services remains strong, and we expect demand for surface drilling from senior and well-financed intermediate companies to pick up throughout this calendar year. On a year-to-date basis, our revenue and profitability have both improved in fiscal 2025. Our revenue is up 4.5% compared to the first nine months of fiscal 2024, and our adjusted gross margin for the period is at 19.3%, up from 15.3% last year. This performance reflects strong operating results in both Canada and South America. We continue to benefit from our strategic focus on senior and well-financed intermediate customers and our exit from West Africa in Q2 last year.
Gold prices have increased dramatically this calendar year, reaching a record high of approximately $3,500 an ounce in April. Copper prices are also up on the year. These prices are highly supportive for our operation in both Canada and South America. I will now turn the call back over to Pierre-Luc to review our financial result for the quarter in greater detail. Pierre-Luc.
Thank you, Daniel, and good morning, everyone. Our revenue totaled CAD 50.0 million in the quarter, an increase of 3.9% from CAD 48.2 million in Q3 last year. Canada revenue was CAD 36.1 million compared to CAD 37.2 million in Q3 last year, reflecting slower drilling activity. International revenue increased 26.3% year over year to CAD 13.9 million from CAD 11.0 million in Q3 a year ago due to increased drilling activity in South America. Gross profit was CAD 5.9 million for the quarter, or 11.9% of revenue, compared to CAD 6.4 million, or 13.2% of revenue, in Q3 last year. Our adjusted gross margin, excluding depreciation expenses, was 16.5% in the quarter compared to 17.6% in Q3 last year. The decreases in gross profit, gross margin, and adjusted gross margin were primarily attributable to slower drilling activity in Canada during the quarter, partially offset by increased drilling activity in South America.
Consolidated earnings from operations for the quarter were CAD 2.4 million compared to CAD 3.3 million in Q3 last year. Drilling Canada's operating earnings totaled CAD 1.1 million compared to CAD 3.1 million in Q3 last year, and our international operating earnings increased to CAD 1.3 million from CAD 0.2 million a year ago. Adjusted EBITDA increased to CAD 6.2 million, up from CAD 3.9 million in Q3 last year. Net earnings were CAD 2.7 million, or CAD 0.08 per share, compared to CAD 2.0 million, or CAD 0.05 per share, last year. The increases in our adjusted EBITDA and net earnings were primarily attributable to the improved operating earnings in South America and a favorable foreign exchange gain of CAD 2.0 million, partially offset by the reduced operating earnings in Canada. In addition, net earnings in Q3 this year were impacted by income tax expense of CAD 0.6 million compared to a recovery of CAD 1.3 million last year.
Turning to our balance sheet, we withdrew a net amount of CAD 0.8 million on our credit facility in the third quarter, compared to a repayment of CAD 1.3 million in Q3 last year. Our long-term debt under the credit facility, including an undrawn CAD 5.0 million revolving credit facility and the current portion, was CAD 19.4 million at quarter-end, compared to CAD 21.5 million as of June 30, 2024, our fiscal 2024 year-end. Our working capital totaled CAD 52.9 million as of March 31st, compared to CAD 48.6 million at the end of fiscal 2024. I'll provide a quick update on our normal course issuer bid. During the third quarter, we repurchased and canceled 24,628 common shares at a weighted average price of CAD 0.83 per share. That is significantly below the current share price. To date, we have purchased and canceled nearly 70,000 shares under the NCIB.
We will continue to monitor our share price for potential opportunities to repurchase shares if and when we believe it is an appropriate use of our capital, but debt reduction is a higher priority. I'll now turn the call back to Daniel for closing comments. Daniel.
Thank you, Pierre-Luc. We have now generated a year-over-year increase in net earnings in five consecutive quarters. While slower demand for surface drilling in Canada impacts our margin in Q3, we believe that our overall performance to date in fiscal 2025 demonstrates that we have the right strategic plan in place to build value for shareholders. This strategy took shape two years ago when we implemented a five-point plan to improve our operating performance over a 15-month period. While that period has passed, we continue to focus on key elements of the plan, including primarily focusing on our operation in Canada and South America, and prioritizing long-term specialized drilling contracts with senior and intermediate customers. Our two capital allocation priorities are maintenance capital expenditure and debt reduction. Our strategic plan is working, and we are going to stick on it as we work hard to strengthen our profitability.
Metal prices are also trending positively for us. With gold prices spiking to record levels this year, gold miners are highly motivated to increase their mineral reserve and resources, but they need to spend money on drilling to prove them up. We generate more than 60% of our revenue from gold drilling operations in the first nine months of fiscal 2025 and are therefore well-positioned to benefit from gold exploration and development spending. Copper prices have also increased this year, even with the heightened economic concerns related to tariffs. We believe this reflects the strong demand outlook for copper, a mineral that is necessary for the ongoing electrification of the global economy. We anticipate continued solid demand for senior and well-financed intermediate companies in this environment. Demand from junior companies remains constrained due to the financial conditions, but we believe investor appetite for junior companies will eventually recover.
We have a strong relationship in the junior mining sector and are well-positioned to selectively pursue business with juniors if and when activity picks up again. We have available drill capacity in Canada and can easily mobilize drill rigs with minimal CapEx as opportunities present themselves. With the right strategic focus and supportive industry fundamentals, we believe that we are well-positioned to drive enhanced profitability on a substantial basis and build value for our shareholders. That concludes our formal remarks this morning. We will now welcome any questions. Operator, please begin the question period.
Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. We do not have any questions. That concludes our question-and-answer session.
Thank you to everyone. Okay, so thank you to everyone for participating today. We look forward to speaking with you again after we report our fiscal fourth quarter and year-end results in September.