Updated Aug 11, 2026
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Geodrill posts record revenue but swings to a loss as Chile drags margins lower

TORONTO, Aug. 11. Geodrill Limited (TSE:GEO) swung to a net loss of roughly $200,000 in the second quarter of 2026 even as revenue climbed 10% to a record $55.1 million, with gross margin falling to 16% from 24% a year earlier as operating losses in Chile and rising input costs compressed profitability. EBITDA margin dropped to 14% from 28% in the same period.

By Jonah Berg2 min read
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Key takeaways

  • Geodrill swung to a net loss of about $200,000 in Q2 2026, down from net income of $5.4 million a year earlier.
  • Revenue rose 10% to a record $55.1 million, but gross margin fell to 16% from 24% and EBITDA margin dropped to 14% from 28%.
  • Operating losses in Chile, higher labor and consumables costs, and appreciation of the Ghanaian cedi drove the margin compression.
  • Geodrill was profitable in Ghana, Cote d'Ivoire, Senegal and Egypt and ended June with roughly $118 million in shareholders' equity.
  • The company is reviewing its Chilean contracts individually in a process expected to take several quarters.

TORONTO, Aug. 11. Geodrill Limited (TSE:GEO) swung to a net loss of roughly $200,000 in the second quarter of 2026 even as revenue climbed 10% to a record $55.1 million, with gross margin falling to 16% from 24% a year earlier as operating losses in Chile and rising input costs compressed profitability. EBITDA margin dropped to 14% from 28% in the same period.

Margin collapse behind the record top line

Gross profit totaled $8.8 million in the quarter ended June 30. EBITDA came in at $7.9 million. A year earlier, the company reported net income of $5.4 million.

CEO Dave Harper said Chile delivered the weakest revenue growth of any operating region and that startup challenges there contributed to its negative performance. CFO Greg Borsk said the company is reviewing its Chilean contracts individually, assessing each on profitability and drilling productivity. Because Geodrill is paid by the meter drilled, productivity shortfalls cut into returns regardless of contract pricing.

Chile review expected to take several quarters

Borsk said the assessment could take several quarters. Where a contract is unprofitable, Geodrill plans to finish active drilling rather than retender. He said the company holds accounts in Chile it describes as very good, with at least some expected to continue into 2027.

Management attributed the broader margin compression to higher labor costs, inflation in consumables and other inputs, appreciation of the Ghanaian cedi, and operating losses in Chile. The company's 104-rig fleet remained active across West Africa and the Middle East. Borsk said Geodrill was profitable in Ghana, Cote d'Ivoire, Senegal and Egypt during the quarter.

Capital position and tax dispute

Geodrill ended June with approximately $118 million in shareholders' equity. Management said the company will retain cash to support operations, reviewing options for share repurchases or dividends quarterly.

The company separately disclosed progress on a tax dispute with Cote d'Ivoire authorities. Geodrill requested that monthly installments be cut to about $450,000 from approximately $900,000. The company made $450,000 payments in May, June, July and August. Through June, Geodrill had repaid roughly $4.5 million of a scheduled $8.4 million total, and said it continues to pursue available legal remedies.

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Frequently asked

Why did Geodrill post a loss despite record revenue?

Gross margin fell to 16% from 24% as operating losses in Chile, rising input costs, higher labor costs and appreciation of the Ghanaian cedi compressed profitability, pushing the company to a roughly $200,000 net loss.

What is Geodrill doing about its problems in Chile?

It is reviewing each Chilean contract individually on profitability and drilling productivity, plans to finish active drilling on unprofitable contracts rather than retender, and expects the assessment to take several quarters.

How large is Geodrill's rig fleet and where does it operate?

Geodrill has a 104-rig fleet active across West Africa and the Middle East, with profitable operations in Ghana, Cote d'Ivoire, Senegal and Egypt during the quarter.

What is the status of Geodrill's tax dispute with Cote d'Ivoire?

Geodrill requested that monthly installments be cut to about $450,000 from roughly $900,000, made $450,000 payments from May through August, and had repaid about $4.5 million of a scheduled $8.4 million total through June while pursuing legal remedies.