Direct costs for the quarter ended December 31, 2012, were $7.41 million compared to $11.54 million in the quarter ending December 31, 2011, as adjusted to include depreciation in accordance with IFRS. The decrease is a direct result of the decreased activity in the second quarter of fiscal 2013. Gross margins for the quarter ended December 31, 2012, were 19.1% compared to 19.8% during the quarter ending December 31, 2011 and lower than the 21.3% recorded in the first quarter of fiscal 2013. The small decrease in gross margin from year to year is directly related to higher fixed costs in the Canadian operations that were offset mostly by higher margins in the Panama and Columbia operations. Management restructured two of its Canadian operations, which is beginning to result in improved margins and profitability.
In accordance with IFRS, $649,821 of depreciation expense of property, plant and equipment is included in direct costs for the quarter ending December 31, 2012, as compared to $663,782 in the second quarter of fiscal 2012.
General and administrative expenses decreased by $145,869 from $1.92 million in the second quarter of fiscal 2012 to $1.78 million in the second quarter of fiscal 2013. During the quarter, the Company recorded a bad debt allowance of $45,000, a reduction of $12,780 in travel expenditures and $112,300 in lower salaries from restructuring in the Canadian operations.
General and administration costs represent 19% of revenues during the second quarter of fiscal 2013, as compared to 13% reported in the first quarter of fiscal 2013, and 13% in the second quarter of fiscal 2012. Management expects general and administration costs to remain around $1.70 million per quarter for the remainder of fiscal 2013.
Net loss after tax for the second quarter of fiscal 2013 is $434,676 compared to a net income after tax of $439,638 in the first second quarter of fiscal 2012.
The Company's cash (cash and cash equivalents) position at December 31, 2012, is $1.48 million compared to $1.24 million at June 30, 2012.
Marketable securities increased $192,171, from $338,698 at June 30, 2012, to $530,869 at December 31, 2012. Marketable securities consist primarily of 1.50 million shares in Standard Gold Inc and 3.56 million shares of International Millennium Mining Corp. We have adjusted the value of our holdings at December 31, 2012, as recorded in the comprehensive income statement. At December 31, 2012, the balance of $530,869 consists of shares in public corporations.
Accounts receivable decreased by $3.64 million to $6.73 million at December 31, 2012, from $10.37 million at June 30, 2012. The decrease is primarily due to reduced activity during the first six months of fiscal 2013.
Property, plant & equipment decreased to $12.51 million at December 31, 2012 from $13.47 million at June 30, 2012, a decrease of $967,146 during the first six months of fiscal 2013, resulting from equipment depreciation offset by equipment purchases of $337,788. The Company has a capital expenditure budget of $1.80 million for fiscal 2013 with an emphasis on modernizing its drill fleet.
Consolidated Financial Results for six months ending December 31, 2012
Revenue for the six months ending December 31, 2012 decreased approximately 26% to $23.00 million, compared to $31.29 million in the comparable period in fiscal 2012. Revenues from our international divisions continue to represent a significant part of Cabo Drilling's operations with 30% of revenues for the first six months of fiscal 2013, as compared to 28% during the comparable period in fiscal 2012. Management expects the international revenues to continue to represent a larger portion of overall revenues in the remaining six months of fiscal 2013.
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