Geodrill (TSX:GEO) shares fell sharply on Tuesday after the company warned of a third-quarter loss due to a credit loss provision and suspended its dividend.
The Canadian drilling services company said in a statement that it expects to book an unaudited non-cash expected credit loss provision of approximately $3.6 million before tax related to the aging of its trade receivables for certain customers.
Revenue for the quarter is also expected to be down to about $30 million, from $35.2 million in 3Q 2022, as a result of slower-than-expected drilling activity in West Africa and South America, the company said. As a result, it said earnings, underlying earnings (EBITDA) and earnings per share will be impacted.
Due to the net loss it expects to report for the quarter, Geodrill (TSX:GEO) said its board of directors has decided not to declare the second semi-annual dividend for its 2023 financial year and will review the dividend position again in 2024.
The company results are scheduled to be released on November 13.
Its shares fell 28% to C$1.71 by midday in Toronto.
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