Construction steel-structures builder ADF Group, Inc. (DRX.TO) on Wednesday reported a 55% decline in profit for the second quarter, hurt by a nearly 22% drop in revenues as well as a 500 basis points fall in margins. However, the company expects the downward trend will be reversed during the second half of the current fiscal year.
In a statement, chairman and chief executive officer, Jean Paschini said, "These results reflect declines from the corresponding periods of the previous year. However, the decrease in revenues is in line with our forecasts considering the different mix of the contracts from one period to another, and the decrease in the margin is due to the time lag between the recognition of costs and revenues with regard to a contract."
Second Quarter Results
The Quebec, Canada-based company reported net earnings of C$1.85 million or C$0.05 per share for the second quarter, lower than C$4.09 million or C$0.11 per share in the prior-year quarter.
Revenues for the quarter declined to C$18.75 million from C$23.99 million in the same quarter last year.
Revenues from Canadian operations rose to C$3.75 million from C$2.18 million in the year-ago quarter, while revenues from U.S. operations totaled C$15.0 million, lower than C$21.81 million in the prior-year quarter.
Other Metrics
Gross margin for the second quarter was C$4.59 million, down from C$6.94 million in the year-ago quarter, while gross margin percentage dropped 500 basis points to 24% from last year's 29%.
Selling and administrative expenses for the quarter rose to C$1.01 million from C$0.86 million in the year-ago quarter.
As at the end of the second quarter, ADF Group's order backlog totaled C$151 million, up 21% from the end of the year-ago second quarter, with the orders scheduled to be executed over a period of 24 months.
During the second quarter, ADF Group redeemed 446,400 subordinate voting shares at an average price of C$2.44 per share, for a net consideration of C$1.1 million. As at July 31, 2009, the company redeemed 618,300 subordinate voting shares at an average price of C$2.35 per share, for a net consideration of C$1.4 million, since the implementation of the normal course issuer bid program.
The company ended the second quarter with cash and cash equivalents of C$9.10 million, compared to $10.55 million at end of the prior-year quarter.
Half-Yearly Highlights
For the first six months, ADF reported net earnings of C$4.09 million or C$0.11 per share, lower than C$7.28 million or C$0.20 per share in the prior-year period.
Revenues for the year-to-date period declined to C$35.50 million from C$49.15 million in the same period last year.
Looking Ahead...
"We expect that this downward trend will be reversed during the second half of the current fiscal year due to the recent contract awards for which the Corporation supplies the raw material (steel) as well as the connection design and engineering services, in addition to the fabrication hours," Paschini added.
Stock Quote
On the Toronto Stock Exchange, DRX.TO closed Tuesday's regular trading at C$2.49, up C$0.03 on a volume of 37,800 shares. In the 52-week period, the stock has been trading in a range of C$1.01 to C$3.69.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.