Drillcon perform the drilling operations close to the customers operations site and we are a project driven entity.
The business segment Core Drilling works with long term contracts, normally 2-3 years that provides a steady level of revenues over the time. Normally the rigs for core drilling are allocated to one or several production sites close to each other. This result in a high utilization of each drill rig. The main revenue for core drilling comes mainly from mines in production and less from exploration drilling for a start-up of a mine.
The business segment Raise Boring performs normally in shorter contracts, 4-7 months and can for example consist to drill shafts for elevator or ventilation in a mine. This gives a more volatile result compared with Core Drilling over a shorter period. Each mobilization gives initially higher cost and less revenue. The raiseboring consist of a two step operation, first you drill the pilot hole that gives minor revenue and then you ream that provides the major revenue. This is the final product and what the customer ordered. Drillcon continuously works to eliminate the standby time with mobilization and de-mobilization. Spite this the impact of revenues and cost for the raiseboring operation over a shorter business cycle such as a quarter can variate.
Therefore, it is important to measure Drillcons performance over a longer business cycle, not just a quarter of a year or a shorter period. This since the revenue and cost can considerably deviate over a shorter period.