thanks for the post. I think it is worth everyone remembering...

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rollacoaster

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28/02/23

17:32

Post #: 66518983
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Originally posted by jlai20 ↑

First time poster here but feel I can add extra colour as I was on the call as well. Mgmt was shy/couldn't provide Jan/Feb utilisation rates but provided commentary below:

- One investor put it to mgmt that how to read the Jan/Feb softness was to think revenue was flat v pcp but was 'significantly' down from mgmt expectations. Costs kept running so margins likely impacted here.
- Mgmt said that the last two years have seen exploration teams from their clients eager to start digging early and so the last two Jan/Febs have possibly been running at abnormally higher utilisation rates.
- January miss was more from bad weather in Qld, Feb miss was more delay in drilling programs
- mgmt posited that after 2 years of lockdowns, clients are 'taking a breather' gor an extended break before they restart drilling. Timing is not a structural issue, mgmt still upbeat on drilling to take place.
- January usually a soft month in terms of seasonality.

Also, buyback likely stopped as a result of blackout period... not so much because they knew about Jan/Feb weakness.

Cash conversion looked good as usual. Buyback roughly half completed so likely continues in 2H.

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thanks for the post.

I think it is worth everyone remembering that DDH has made plenty of money over the past 18 months despite various other headwinds (labour availability/shortages, cost escalation etc) so DDH is well placed to weather any storm.

Potentially creates a positive scenario to acquire another bolt on driller

DDH Price at posting: 90.0¢ Sentiment: Hold Disclosure: Held
6 Upvote

0 Great analysis

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