Welcome to the Foraco International SA Fourth Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this time, you will need to press star one on your telephone keypad. If you require any further assistance, you may press star zero for an operator to come back on to assist you. I would now like to hand the conference over to your first speaker today, Mr. Daniel Simoncini. Please go ahead. Thank you, Amy. Thank you all for joining us on our Q4 2020 Results Conference. I am Daniel Simoncini, Chairman and CEO of Foraco, and with me today is Vice CEO and CFO, Jean-Pierre Charmensat. The news release of these results was issued this morning prior to the opening of the TSX through CNW Newswire. If you did not receive a copy of the release, please visit our site, www.foraco.com. 2020 has been incredibly challenging for billions of people, and now more than 150 million people got infected. 2.5 million died of it. Despite all precautions in place, our team lost its first member from COVID early last month in Brazil, and we still have 11 employees who are still under medical monitoring in Russia and Brazil, out of the 178 Foraco employees who tested positive since the beginning of the pandemic. We hope the starting vaccination campaigns will soon render COVID much less worrisome, and meanwhile, we continue to maintain a very strict sanitary protocol throughout the company to maintain the highest barriers against the various transmissions, but alas, most detected contamination occurs outside our workplaces. During 2020, many sectors of the world economy have been badly impacted, but fortunately, we at Foraco have fared well these difficult times, and after a good Q3, we're glad to report a 2020 Q4 revenue at $54.2 million in revenue, which is a nine-year high and a utilization rate of 53% compared to 45% a year ago. This put the full year 2020 revenue at $207 million, 8% above 2019 at constant exchange rates. During the quarter, all our regions performed well, and our sustainable economy-related segment was strong again this quarter. Foraco main exposure to commodities in 2020 are 30% to EV metals, 19% to water, and 31% to gold. I will now pass the conference to Jean-Pierre, who will walk us through the financials in more detail. Jean-Pierre? Thank you, Daniel, and good morning, everyone. So, revenue for the Q4 2020 quarter amounted to $54.2 million compared to $48.4 million for the same period last year, a 12% increase. By reporting segment, we recorded a 54% increase in the water segment, mainly in Africa and Australia. Water represented 17% of Q4 2020 revenue versus 12% in Q4 2019. By geographic region, EMEA and North America were the most active regions. Revenue in EMEA for the quarter was $18.2 million compared to $12.9 million in Q4 2019, a 41% increase, mainly in Africa, thanks to the deep water wells long-term contracts which will continue in 2021. In North America, mainly Canada, the activity increased at $17.3 million in Q4 2020 compared to $16.2 million in Q4 2019. This is mainly due to new contracts which will continue throughout 2021. At $9.6 million, Asia Pacific was stable compared to the same quarter last year. Revenue in South America decreased by 10% compared to Q4 2019, but a 6% increase excluding the adverse foreign exchange impact. The activity in Brazil was particularly impacted by the effect of the pandemic, which disrupted the activity since Q2 2020. In Q4 2020, the geographical activity split was EMEA 33%, North America 32%, Asia Pacific 18%, South America 17%. During the quarter, the gross margin, including depreciation within cost of sales as per IFRS rules, was a profit of $9 million versus $8.9 million for the same quarter last year. This increase is mainly due to the solid performance on ongoing contracts, partially offset by mobilization costs on some new contracts, which impacted the gross margin. SG&A increased by 5% to $5.6 million compared to the same period last year, but decreased as a percentage of revenue from 11% to 10%. The EBIT, or operating result, was a $3.4 million profit versus a $3.6 million in Q4 2019. The EBITDA amounted to $7.8 million, or 14.5% of revenue, compared to $8.2 million in Q4 2019. On a full-year basis, we are pleased to report improved results. In 2020, despite the impact of the COVID-19 pandemic in the first part of the year, revenue amounted to $207.1 million compared to $205.4 million in 2019, a 1% increase and an 8% increase after adjusting for currency fluctuations. Revenue increased 30% in EMEA, mainly in Africa and Russia, and 6% in Asia Pacific. In South America, revenue decreased by 29% or 11% at constant exchange rates due to the impact of the COVID-19, which continued to disrupt the activity throughout the year. Revenue in North America decreased by 4% linked to the COVID-19 pandemic. The full-year 2020 gross profit was $38.2 million versus $32.1 million for last year, a 19% improvement, mainly due to the contribution of the water segment and the solid performance on contracts. The 2020 EBIT was $17.2 million compared to $11.0 million in 2019, mainly as a result of increased gross margin and stable SG&A expenses. The 2020 EBITDA was a positive $34.1 million, or 16.4% of revenue, compared to $29.3 million, or 14.2% of revenue in 2019. In 2020, the cash flow generated by operation was $34.1 million compared to $29.2 million in 2019, mainly linked to the increased margin. Working capital decreased by $3.3 million versus $0.6 million in 2019. During the period, CapEx amounted to $13.3 million in cash compared to $12.5 million in cash in 2019. The CapEx relates to major rigs overhauls and singular equipment and rods. The free cash flow before debt servicing was $20.1 million in 2020 compared to $11.4 million in 2019. At December 31, 2020, our net debt, excluding the effect of IFRS 16, amounted to $136.2 million compared to $128.9 million at the 2019 year-end. The net debt is penalized by the adverse foreign exchange variations, $15.1 million, and cost of financing, including capitalized interest, $6.7 million. At year-end, we met our covenants. Now, our focus for the next quarter will be to continue to generate free cash flow and to deleverage the company's balance sheet, and we are making progress with our lenders to refinance our outstanding secure bonds due in May 2022 in order to improve the terms and extend the maturity of the debt. I will now return the call to Daniel, sorry, for his closing remarks. Daniel? Thank you, Jean-Pierre. Thanks to the vaccination campaign, which is underway on the planet, there is much more hope to get to an end of the pandemic sometime late 2021 or early 2022. Many say the recovery economically shall be gradual, but we are confident the jurisdictions where we operate will be among the first to get out of the sanitary crisis. In parallel, the energy transition, which was not really slowed down last year, is poised to accelerate, and the world will need much more resources to reach the climate protection targets, and especially heavy metals, which already amount to 30% of our activity. This is why we are cautiously confident our sector will embark on a growing part of the cycle sooner than later. During the last bidding season, which comes to an end, we have seen a solid demand for our services, with some subsegments growing lately, like copper, nickel, and gold, while water drilling remains a remarkable driver of our activity. As of December 31, 2020, our order backlog was $270 million, out of which $174 million are to be executed in 2021 versus $158 million last year. This is a 10% increase. This makes us expect a good 2021 activity if everything goes up as per the plan, which is not a done deal, indeed. However, we remain confident that our business model is one of the most resilient in the industry and that we will continue to improve our performances by many metrics. One of the main 2020 goals was to initiate discussions with our existing lenders and other potential lenders to explore few scenarios of refinancing our long-term debt at better terms, as Jean-Pierre said, and extended maturity. We are currently making progress, and we will communicate in due time according to the TSX's closing rules. In conclusion, Foraco is closing a good financial year despite one of the most global adverse events in modern history, and we start 2021 with one of the strongest order books ever. We will now focus on the safe execution of these contracts, and we are hopeful the coming year will be better than 2020 for everybody. Thank you for listening. I will now turn the call to Amy, who will take the first question. Amy? At this time, ladies and gentlemen, if you would like to ask a question, please go ahead and press star, then the number one on your telephone keypad. If you would like to withdraw your question, you may press the pound key. Your first question today comes from the line of Nicholas Cortellucci with M Partners. Please proceed with your question. Hey, guys. Good. I'm Nicholas from M Partners. Congrats on a great quarter. Just had a quick question. We know the junior miners have been raising money through the last 6-9 months. I was just wondering when do you guys think you're going to start seeing the impact of that on your revenue and backlog? Thanks. That's true. We have already seen the impact of that on the late part of the year. As you know, we are not that exposed to the junior space, which accounts for 12% or 13% of our whole activity. And the juniors we are working with are fully cashed. And we are hopeful that we will see a marginal effect of this in the coming quarter, starting now, in certain regions such as Africa, Canada, and in another, let's say, in a lesser extent, Brazil and Argentina. So the money is already flowing to the drill rig, but we are not that focused on the junior side because our tier one major miners' customers are already booking us a lot. Gotcha. Makes sense. Thanks for that, guys. Have a great day. Thank you. Thank you. And again, ladies and gentlemen, it is star one to ask a question. Your next question comes from the line of Steven Green with Ordinance Capital. Please proceed with your question. Hi, Daniel. I'm glad you're doing well. I'm glad the company had a good quarter, and I'm sorry for any loss that you had from COVID, even though you seem to have managed it very, very well. Just one question to follow up on the debt. You said you're working with the holders. Does any debt plan involve retiring any of the debt at a lower than face value? Steven, we cannot communicate on that yet because we are engaged in complex discussions and conversations with our lenders. So I suggest you wait us to communicate once we are ready to do so. But everything is on the table. And the outcome that we are pursuing is to get a much better balance sheet on that respect. Okay. Well, I. I'm sorry I cannot be more specific on that, okay? I understand. For the moment. I mean, the company is doing really well. I think the last time that revenue was at this level was April 1, I think, 2012. And the market cap of this company was $450 million back then. And I don't think you want I think you thought at that point, I remember attending some conference calls, you wouldn't sell the company. You thought it was going to go higher. Of course, the cycles are we've gone through a terrible down cycle, but now we seem to be on the upside. So right now, the company is selling the price of the stock is about 2x EBITDA and about 10x actual GAAP EPS, which obviously is very cheap for a cyclical company kind of getting ready to take off. What do you think this company looks like over the next year? Or do you think I mean, does it look like we can get some press or some investor relations so we can get the true value of this company compared to what the earnings are and the growth potential? Absolutely, Steven. Once we have given confidence to the investors that the company can renegotiate, I mean, refinance the debt and get an extended maturity, giving some leeway and headroom for growth, I think our job will be to make the necessary and sufficient communication campaigns to the investors to unlock the value of this company. We are absolutely convinced that we can be a very serious challenger of the best in our space, and we are going to do so. Because it is cheap. It is cheap. It is cheap. I mean, 2x EBITDA is kind of cheap. It is that cheap, and we cannot buy anymore. You said that you completed the cycle, the bidding season. I guess prices have firmed up a little bit. My question is about the water. Are you doing water for other companies, mines, or just your own reclamation? No, no, no, no. We always have a customer, except in the case of water for people where we are funded by international aid agencies. But our water business is a large majority underlying the mining operation. Would it be dewatering a mine site, dewatering a property, or bringing fresh water to the property, etc., or helping the local community on that? Are you doing that to competitors? Other miners? No, no, no, no, no, no. We help our customers like Rio Tinto, like Teck Resources, like whomever, I mean, to manage the groundwater they have on the property. So we help them to monitor the groundwater level, the groundwater quality. We help them to dewater part of the mine site. We help them to extract water from a site, pump it to the other side to be stored because it's a very precious resource. So we are helping them to manage the resource. Okay. Good. And how would the prices, I guess, copper price is crazy right now. It's doubled. Yeah. It's doubled. So I guess. As you know, there is a direct or very easy correlation between the commodity prices and the amount of billion dollars the miners put in the ground in terms of drilling or mining. The surge in prices is a bit too new. I'm referring to copper. I'm referring to nickel to, let's say, to trigger a visible and significant positive impact on the market. This is yet to come, okay? However, having said that, the fact that we have one of the best order books for the year to come ever shows that the demand is already there and that the budget, at least in our client portfolio, the drilling budgets are good and slightly growing for the year, okay? But this is not yet correlated to the, let's say, the last 2-3 months surge in copper price, for instance, or the late nickel booming. We have yet to see what the impact of that. Similarly, the fact that there has been a little consolidation in the gold price has not at all impacted the level of activity in the gold space. So there is a kind of dampening effect, if I may say so. Right. But we need the metals we really need are for the EVs and stuff and all the batteries and stuff, the nickels and the coppers. That could be a good growth business for us, and we could be a green energy company. I mean, we need copper. We need a lot of copper for those EVs. Well, if you consolidate our exposure to the green energy or the EV metals or the battery metals, depending on how you call them, plus the water, it's over 50% of our business already. We exited totally from the thermal coal, but we are strong believers in iron ore because even if it's a structural commodity, I mean, the need is there. And our customers have a good ride, and they have excellent visibility on that, whether it be Vale, Rio, BHP, or whatever, okay? That's good. We are involved in the green energy transition anyway. That's excellent. Then your utilization rate went up to 53%. I assume if you get this is really the sweet spot for the leverage of the model, right? Because if you get from 53% to, say, 60% or 65%, the gross profit, right? I mean, because those fixed costs go way down, right? If you get the. You got it. So this is a sweet spot in the model. What do you think that can you get the utilization rate up to 60%? What does it? I have no idea. You are catching me short. I don't know exactly what the yearly average that we had, but you got the model right. I mean, if we can gain 3%-4% of average yearly utilization, I mean, this goes down straight to the EBITDA. Yeah. That's good. I'm excited. I don't want to ask any more questions because actually, for the first time, did somebody else ask a question in about five years, so that's good. I hope we have a good news soon. I think just one point of clarification. I think there's a typo on page 4 of the earnings release under Q4 2020. It says in the last second of the last one, it says, "This increase is mainly due to new contracts, which will continue throughout 2020." That should be 2021, right? Yeah, yeah. Yeah, yeah, yeah. We noticed that. 2021. Sorry. Okay. I just want to make sure. Okay. Our mistake. All right. Thank you so much. I think this will be a better year. Hopefully, everybody gets vaccinated, and everybody stays safe. Thank you, Steven. Stay safe too. Always a pleasure to talk. All right. We'll talk soon. Have a good day. And again, ladies and gentlemen, if you would like to ask a question, please go ahead and press star then the number one on your telephone keypad. You do have a question from the line of Ray Giddens, a private investor. Please proceed with your question. Hi, guys. As I look at where you are now and hear the other questions, it just seems like you're on the cusp of being one of the great survivors of this cycle. The equity element of your enterprise value is really just a stub. If you can get out of this, you can provide incredible upside. So I guess my question is related to utilization. If we think of, if we say you're somewhere in the 55% area, what is the denominator? The last rig that you would put to work, is that a rig that you would reluctantly put to work? Is that a—I mean, how do you think about utilization? Is it everything here that we would be happy to send out to a client, or there's some older stuff that we'd like to hold back? How would you describe that? Very good question. And when the stars are getting aligned in a sector or in our type of business, you've got a second variable in play, which is the crews, the people. After the depression we had, I mean, the sector, okay, between 2013 and 2016, many, many people have left the industry. And today, one of our biggest bottlenecks is to find good crews and safe crews, people who are able to operate a rig without hurting themselves. So when you mix this plus the fact that the customers are asking for the best of the best rig in the beginning, then when you are fully booked, you say, "Okay, sorry, I go to tier two." The guy says, "Okay, fine. No problem." Then you are scrambling to crew these rigs. And to give you an idea, historically speaking, at Foraco, we never, never went over 66% or 68%. Here, it depends on how you account or you define your convention, as you said, the denominator. We at Foraco, we are calculating our utilization rate in a way that we take each and every rig we have out of the 302, we look where they are located at the moment, and we observe how many days this rig can work according to the climate, according to the rainy season, the winter, the breakup, the freeze-up, or everything. And so we have a certain number of days allocated as a denominator on a rig per rig basis. So the same rig, when it's working in the Arctic, has maybe, I don't know, 120 days, 150 days' worth of work. The same rig you put in Australia, he has 310 or 330. So we take that into consideration, and we compound the utilization rate. So it's depending on where you are and what kind of climate you're working with. The top of the top, I think we had. I'm speaking under Jean-Pierre Charmensat. Was 66% off the top of my head, okay? Today, I don't think we were above 50% last year. I think we were in the 48, 40, whatever. I need to cross-check that. We can gain, let's say, five, six, seven points going forward. And this is what we're going to do, and this is what Steve was saying. I mean, as soon as we reach this status, things are very worthy. The thing we don't want to do, to be complete and to try to answer your question in full, is we don't want to take any human risk to get out an old rig and put it at work with a rookie crew because this is a perfect recipe for disaster, okay? Did I answer your question right? Again, ladies and gentlemen, to ask a question, that is star one. There are no further questions in queue at this time. I turn the call back to the presenters for closing remarks. Thank you, Amy. Thank you, everybody. Talk to you on the next quarter. Have a great day and stay safe. Bye-bye. Thank you. Bye-bye. This concludes today's conference call. Thank you for your participation. You may now disconnect.