AKITA announces third quarter results and net income of $1.5 million for the quarter
CALGARY, AB, Nov. 3, 2025 /CNW/ - AKITA Drilling Ltd. (TSX: AKT.A)
AKITA Drilling Ltd. ("AKITA" or the "Company") announces results for the nine months ended September 30, 2025.
The Company's net income increased to $1,545,000 in the third quarter of 2025, up 40% when compared to the same quarter of 2024. The increase in net income was driven by improved results in the Company's Canadian operating segment and lower selling and administrative expenses in the quarter. These improvements were partially offset by declining results in AKITA's US operating segment. The same factors influenced the Company's adjusted funds flow from operations, which increased to $9,272,000 in the third quarter of 2025 up from $8,435,000 in the same period of 2024. Net cash from operations decreased to $5,663,000 for the three months ended September 30, 2025, compared to $6,458,000 in the same period of 2024. This decrease was mainly due to the change in non-cash working capital, which increased to $1,146,000 in the third quarter of 2025, compared to a decrease of $1,175,000 in the third quarter of 2024. Capital expenditures increased to $8,832,000 in the third quarter of 2025, from $7,378,000 in the third quarter of 2024. In both periods, capital expenditures related to routine items. At September 30, 2025, AKITA's net debt balance was $27,814,000, down from $47,718,000 at September 30, 2024. During the quarter the Company repurchased and cancelled 84,366 Class A non-voting shares under its NCIB.
Colin Dease, AKITA's Chief Executive Officer stated: "The third quarter was challenging for the Company, with industry-wide activity in the US continuing to decline and several programs in Canada delayed. Looking ahead, the fourth quarter and early part of next year are expected to be very active for our Canadian fleet, while activity in our US fleet is not showing signs of recovery until the first quarter of 2026."
CONSOLIDATED FINANCIAL HIGHLIGHTS
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||
$Thousands, except per share amounts | 2025 | 2024 | Change | % | 2025 | 2024 | Change | % |
Revenue | 44,604 | 45,828 | (1,224) | (3 %) | 159,264 | 130,469 | 28,795 | 22 % |
Operating and maintenance expenses | 34,006 | 35,727 | (1,721) | (5 %) | 117,669 | 99,044 | 18,625 | 19 % |
Operating margin | 10,598 | 10,101 | 497 | 5 % | 41,595 | 31,425 | 10,170 | 32 % |
Margin % | 24 % | 22 % | 2 % | 9 % | 26 % | 24 % | 2 % | 8 % |
Net cash from operating activities | 5,663 | 6,458 | (795) | (12 %) | 32,881 | 24,318 | 8,563 | 35 % |
Adjusted fund flow from operations(1) | 9,272 | 8,435 | 837 | 10 % | 36,164 | 26,080 | 10,084 | 39 % |
Per share | 0.23 | 0.21 | 0.02 | 10 % | 0.91 | 0.66 | 0.25 | 38 % |
Net Income | 1,545 | 1,106 | 439 | 40 % | 12,474 | 3,254 | 9,220 | 283 % |
Per share | 0.04 | 0.03 | 0.01 | 33 % | 0.31 | 0.08 | 0.23 | 288 % |
Capital expenditures | 8,832 | 7,378 | 1,454 | 20 % | 23,449 | 18,439 | 5,010 | 27 % |
Weighted average shares outstanding | 39,731 | 39,734 | (3) | (0 %) | 39,733 | 39,728 | 5 | 0 % |
Total assets | 259,824 | 251,486 | 8,338 | 3 % | 259,824 | 251,486 | 8,338 | 3 % |
Total debt | 39,674 | 55,551 | (15,877) | (29 %) | 39,674 | 55,551 | (15,877) | (29 %) |
(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail. | ||||||||
Canada
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||
$Thousands, except per day amounts | 2025 | 2024 | Change | % | 2025 | 2024 | Change | % |
Revenue Canada | 18,217 | 14,842 | 3,375 | 23 % | 52,766 | 40,211 | 12,555 | 31 % |
Revenue from joint venture drilling rigs | 10,530 | 11,038 | (508) | (5 %) | 31,637 | 33,185 | (1,548) | (5 %) |
Flow through charges(1) | (1,369) | (855) | (514) | (60 %) | (3,436) | (2,539) | (897) | (35 %) |
Adjusted revenue Canada(1) | 27,378 | 25,025 | 2,353 | 9 % | 80,967 | 70,857 | 10,110 | 14 % |
Operating and maintenance expenses Canada | 13,319 | 11,577 | 1,742 | 15 % | 38,202 | 30,057 | 8,145 | 27 % |
Operating and maintenance expenses from joint venture drilling rigs | 7,628 | 7,989 | (361) | (5 %) | 23,101 | 23,250 | (149) | (1 %) |
Flow through charges(1) | (1,369) | (855) | (514) | (60 %) | (3,436) | (2,539) | (897) | (35 %) |
Adjusted operating and maintenance expenses Canada | 19,578 | 18,711 | 867 | 5 % | 57,867 | 50,768 | 7,099 | 14 % |
Adjusted operating margin Canada(1) | 7,800 | 6,314 | 1,486 | 24 % | 23,100 | 20,089 | 3,011 | 15 % |
Margin %(1) | 28 % | 25 % | 3 % | 12 % | 29 % | 28 % | 1 % | 4 % |
Operating days | 715 | 698 | 17 | 2 % | 2,133 | 1,819 | 314 | 17 % |
Adjusted revenue per operating day(1) | 38,291 | 35,852 | 2,439 | 7 % | 37,959 | 38,954 | (995) | (3 %) |
Adjusted operating and maintenance expenses per operating day(1) | 27,382 | 26,807 | 575 | 2 % | 27,129 | 27,910 | (781) | (3 %) |
Adjusted operating margin per operating day(1) | 10,909 | 9,045 | 1,864 | 21 % | 10,830 | 11,044 | (214) | (2 %) |
Utilization(1) | 46 % | 45 % | 1 % | 2 % | 46 % | 39 % | 7 % | 18 % |
Rig count | 17 | 17 | - | 0 % | 17 | 17 | - | 0 % |
(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail. | ||||||||
During the third quarter of 2025, AKITA's operating days in its Canadian division increased by 17 days to 715 days, compared to 698 days in the same period of last year. AKITA's triple rigs, which are a mix of deep gas and oilsands rigs, increased by 32 operating days; double rigs increased by 35 operating days; while the Company's single rigs decreased 50 days over the same period. The increase in activity for the triple rigs was concentrated in the deep gas market, as the Company's oilsands rigs started up late in the quarter and therefore did not achieve as many operating days as in the prior year. Programs for the single rigs were deferred into the fourth quarter of 2025, causing the decrease in activity when compared to the prior year. AKITA ended the quarter with 11 rigs operating in Canada, corresponding to a 65% utilization rate for the Company's Canadian fleet, compared to industry activity of 58%.
Adjusted operating margin in Canada increased 24% to $7,800,000 in the third quarter of 2025, compared to $6,314,000 in the third quarter of 2024. The most significant factor contributing to the improved margin quarter-over-quarter was the increased number of high margin rigs working in the quarter, which accounted for approximately 50% of the increase. The remaining increase was attributed to a combination of standby revenue and labour contract operating profit.
Adjusted operating and maintenance expenses per operating day increased marginally to $27,382 per day in the third quarter of 2025, compared with $26,807 per day in the same period of 2024. This 2% increase reflects higher material costs, partially offset by ongoing cost control initiatives during the quarter.
AKITA's Canadian operating results include its share of revenue and costs from its joint venture drilling rigs, as AKITA provides the same drilling services through its joint venture drilling rigs as it does with its wholly-owned drilling rigs.
United States
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||
$Thousands, except per day amounts | 2025 | 2024 | Change | % | 2025 | 2024 | Change | % |
Revenue US | 26,387 | 30,986 | (4,599) | (15 %) | 106,498 | 90,258 | 16,240 | 18 % |
Flow through charges(1) | (4,561) | (3,310) | (1,251) | (38 %) | (14,883) | (10,652) | (4,231) | (40 %) |
Adjusted revenue US(1) | 21,826 | 27,676 | (5,850) | (21 %) | 91,615 | 79,606 | 12,009 | 15 % |
Operating and maintenance expenses US | 20,686 | 24,150 | (3,464) | (14 %) | 79,467 | 68,987 | 10,480 | 15 % |
Flow through charges(1) | (4,561) | (3,310) | (1,251) | (38 %) | (14,883) | (10,652) | (4,231) | (40 %) |
Adjusted operating and maintenance expenses US | 16,125 | 20,840 | (4,715) | (23 %) | 64,584 | 58,335 | 6,249 | 11 % |
Adjusted operating margin US(1) | 5,701 | 6,836 | (1,135) | (17 %) | 27,031 | 21,271 | 5,760 | 27 % |
Margin %(1) | 26 % | 25 % | 1 % | 4 % | 30 % | 27 % | 3 % | 11 % |
Operating days | 583 | 713 | (130) | (18 %) | 2,378 | 2,056 | 322 | 16 % |
Adjusted revenue per operating day(1) | 37,437 | 38,816 | (1,379) | (4 %) | 38,526 | 38,719 | (193) | (0 %) |
Adjusted operating and maintenance expenses per operating day(1) | 27,659 | 29,229 | (1,570) | (5 %) | 27,159 | 28,373 | (1,214) | (4 %) |
Adjusted operating margin per operating day(1) | 9,778 | 9,587 | 191 | 2 % | 11,367 | 10,346 | 1,021 | 10 % |
Utilization(1) | 43 % | 52 % | (9 %) | (17 %) | 58 % | 50 % | 8 % | 16 % |
Rig count | 15 | 15 | - | 0 % | 15 | 15 | - | 0 % |
(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail. | ||||||||
In the third quarter of 2025, AKITA's operating days in the US decreased 18% to 583 days, compared to 713 days in the same period of last year. This decline is consistent with the overall drop in the US industry rig count, which fell to 526 rigs in September 2025, from 566 rigs in September 2024. AKITA's 850 series rigs generated 250 operating days in the third quarter of 2025 compared to 300 in the same period of 2024, while AKITA's 500 series rigs dropped to 260 operating days from 370 operating days. The drop in AKITA's 500 series rig activity is due mainly to current market demand but was also impacted by delays in operator programs.
The decline in operating days had a corresponding impact on both adjusted revenue and adjusted operating and maintenance expense, reducing operating margin to $5,701,000 in the third quarter of 2025 from $6,836,000 in the same quarter in 2024.
Adjusted margin per operating day remained relatively stable between the third quarter of 2025 and the same period in 2024, increasing modestly by 2% to $9,778 per day. This stability in margin occurred despite a decline in adjusted revenue per operating day which fell to $37,437 in the third quarter of 2025. This revenue figure includes $1,338,000 in pipe replacement revenue recognized during the quarter. By comparison, adjusted revenue per operating day in the third quarter of 2024 was higher at $38,816, with drill pipe revenue of $638,000. The decrease in revenue per day, despite increased pipe revenue, highlights the ongoing pricing pressure in the US market, which is facing a challenging environment characterized by lower industry activity and heightened competition. Despite these challenges, AKITA was able to maintain a stable adjusted margin, largely through disciplined cost management, a continued focus on operational efficiency and improved preventative maintenance. This is evidenced by a 5% decrease in adjusted operating and maintenance expense per day, which was $27,659 per day for the third quarter of 2025.
FURTHER INFORMATION
This news release shall be used as preparation for reading the full disclosure documents. AKITA's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the quarter ended September 30, 2025 will be available on the AKITA website (www.akita-drilling.com) or via SEDAR (www.sedar.com) or can be requested in print from the Company.
Non-GAAP and Supplementary Financial Measures
Non-GAAP Financial Measures
Adjusted Revenue and Adjusted Operating and Maintenance Expenses
Revenue and operating and maintenance expenses in AKITA's Canadian operating segment include revenue and expenses from AKITA's wholly-owned drilling rigs as well as its share of joint venture revenue and expenses.
Excluded from the revenue and expenses in AKITA's Canadian and US operating segment are flow through charges that are billed to operators and repaid to the Company. The volume and timing of the flow through charges can artificially impact the operational per day analysis and as a result management and certain investors may find the comparability between periods is improved when these flow through charges are excluded from revenue per day and operating and maintenance expense per day. The flow through charges do not have any impact on the Company's net earnings as the amounts offset each other.
Adjusted Funds Flow from Operations
Adjusted funds flow from operations is not a recognized GAAP measure under IFRS and readers should note that AKITA's method of determining adjusted funds flow from operations may differ from methods used by other companies, and includes cash flow from operating activities before working capital changes, equity income from joint ventures, and income tax amounts paid or recovered during the period. Nonetheless, management and certain investors may find adjusted funds flow from operations to be a useful measurement to evaluate the Company's operating results at year-end and within each year, since the seasonal nature of the business affects the comparability of non-cash working capital changes both between and within periods.
For the Three Months Ended | For the Nine Months Ended | |||
$Thousands | 2025 | 2024 | 2025 | 2024 |
Net cash from operating activities | 5,663 | 6,458 | 32,881 | 24,318 |
Interest paid | 715 | 935 | 2,409 | 3,320 |
Interest expense | (762) | (984) | (2,552) | (3,467) |
Post-employment benefits paid | 78 | 78 | 236 | 236 |
Equity income from joint ventures | 2,782 | 2,918 | 8,201 | 9,592 |
Unrealized loss on foreign exchange | (350) | - | 860 | - |
Change in non-cash working capital | 1,146 | (970) | (5,871) | (7,919) |
Adjusted funds flow from operations | 9,272 | 8,435 | 36,164 | 26,080 |
Non-GAAP Ratios
"Adjusted funds flow from operations per share" is calculated on the same basis as net loss per class A and class B share basic and diluted, utilizing the basic and diluted weighted average number of class A and class B shares outstanding during the periods presented.
"Adjusted revenue per operating day" may be useful to analysts, investors, other interested parties and management as a measure of pricing strength and is calculated by dividing adjusted revenue by the number of operating days for the period.
"Adjusted operating and maintenance expenses per operating day" may be useful to analysts, investors, other interested parties and management as it demonstrates a degree of cost control and provides a proxy for specific inflation rates incurred by the Company
FORWARD-LOOKING INFORMATION:
Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", and similar expressions. In particular, forward-looking information in this news release includes, but is not limited to, references to the outlook for the drilling industry (including activity levels and day rates), the Company's relationships and customers and vendors, advantages associated with the percentage of pad drilling rigs in the Company's Canadian drilling fleet, the renewal of drilling contracts and debt repayment.
Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.
Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and therefore carry the risk that the predictions and other forward-looking statements will not be realized. Readers of this news release are cautioned not to place undue reliance on these statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, estimates and intentions expressed in such forward-looking statements.
The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of, among other things, prevailing economic conditions; the level of exploration and development activity carried on by AKITA's customers, world crude oil prices and North American natural gas prices; global liquefied natural gas (LNG) demand, weather, access to capital markets; and government policies. We caution that the foregoing list of factors is not exhaustive and that while relying on forward-looking statements to make decisions with respect to AKITA, investors and others should carefully consider the foregoing factors, as well as other uncertainties and events, prior to making a decision to invest in AKITA. Except where required by law, the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by it or on its behalf.
SOURCE AKITA Drilling Ltd.