TIDMCAPD
RNS Number : 8017D
Capital Drilling Limited
02 May 2017
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
Q1 Trading Update
Capital Drilling Limited (CAPD:LN), a leading drilling solutions
company focused on emerging and developing markets, today provides
its Q1 2017 trading update for the period to 01 May 2017.
FIRST QUARTER (Q1) 2017 KEY METRICS
Revenue
($m) 31.6 19.1 27.8 65.4% 13.6%
ARPOR(#)
($) 196,000 181,000 170,000* 8.3% 15.3%
Average
utilised
rigs 51 34 51 50.0% 0.0%
Fleet Utilisation
(%) 55% 36% 55% 52.8% 0.0%
Average
Fleet 93 94 94 -1.1% -1.1%
Closing
fleet size 93 94 92 -1.1% 1.1%
(*) restated
(#) Average revenue per operating rig
Financial Highlights
-- Revenue of $31.6 million, representing 13.6% growth on Q4
2016 ($27.8 million) and 65.4% on Q1 2016 ($19.1 million)
-- Strongest first quarter revenue result since 2013
-- ARPOR up 15.3% ($196,000) on Q4 2016 ($170,000)
-- Declared a final dividend of US1.0cps for 2016 financial year, payable on May 19, 2017
-- Maintained strong balance sheet
-- 2017 revenue guidance increased to $120 - $130 million
(previous guidance of $105 - $112 million), driven by the strength
of the Q1 results and additional rigs commencing drilling
Operational Highlights
-- Maintained utilisation and improved ARPOR over Q4 2016
-- Expanded operations at AngloGold Ashanti's Geita Gold Mine
(Tanzania), with an additional underground rig commencing in
February
-- Newly acquired blast hole and grade control rigs (previously
announced) for long-term production contracts at Centamin's Sukari
Gold Mine (Egypt) and Acacia Mining's North Mara Gold Mine
(Tanzania) commenced operations in February
-- Awarded multiple new exploration drilling contracts with existing customers, including;
- Aton Resources (Egypt): 1 diamond rig, commenced February
- Algold (Mauritania): 2 rigs (1 diamond rig, 1 Reverse Circulation rig), commenced February
- MRL (Mauritania): 1 RC rig, commenced April
- OreCorp Limited (Mauritania); 1 diamond rig, commencing Q2 2017
- Thani Stratex (Egypt): 1 diamond rig, commencing Q2 2017
-- Commenced grade control drilling at the Tasiast Mine in
Mauritania in April with a second rig scheduled for Q3 2017
-- Awarded initial Phase 1 production contract for two blast
hole rigs with Alecto Minerals (Botswana), with the first rig
commencing drilling in March 2017
-- Purchased a further blast hole rig for the Geita Gold Mine,
with delivery scheduled for late Q2 2017
-- Achievement of world class safety milestones, including:
- Tanzania (Mwanza Support Facility) achieved 9 years LTI free in January 2017
- Mauritania (Tasiast Project) achieved 5 years LTI free in February 2017
-- Exploration drilling programs commenced earlier than recent
years following the traditional seasonal shutdown
-- Made initial strategic investment in MS Analytical, a
Canadian head quartered laboratory business with satellite
operations and focus on global developing and emerging markets
Trading Update and Outlook
Capital Drilling generated revenue of $31.6 million during Q1
2017, representing an increase of 13.6% on the previous period (Q4
2016 : $27.8 million) and a 65.4% increase over Q1 2016 ($19.1
million). ARPOR increased 15.3% ($196,000) over Q4 2016 ($170,000)
due primarily to exploration activity becoming more consistent
during the quarter. The result reflects the cyclical recovery in
exploration demonstrated by the earlier and considerably stronger
start-up following the seasonal shut down, together with growing
activity driven by stronger gold and base metal prices.
The Company's long-term production contracts continue to
underpin revenue stability. Encouragingly, operations at AngloGold
Ashanti's Geita Gold Mine expanded during the quarter - an
additional underground rig commenced drilling in February and a new
blast hole rig was purchased with delivery scheduled for late Q2
2017. Three new production rigs acquired for the long-term Sukari
and North Mara contracts (as previously announced) were also
mobilised and began operating in February. Additionally, Capital
Drilling was awarded a Phase 1 production contract for two blast
hole rigs at Alecto Mineral's Mowana Copper project in Botswana.
Drilling started at the mine in March.
Increasing exploration activity seen in H2 2016 has continued.
New short-term exploration contracts awarded during the quarter are
a continuation of drilling programs that commenced last year.
Capital Drilling operated at these sites previously and will
benefit from client and site knowledge, with minimal additional
mobilisation costs, with rigs already on the ground at these
locations.
As previously announced, the Board of Directors declared a final
dividend for the 2016 period of 1.0cps (US$1.35 million), payable
on 19 May 2017. Improving market conditions during the year
required increased capital expenditure, which in turn will
contribute to improved revenue and earnings growth in the future.
As a result, this represents a decrease on the final 2015
dividend.
During the quarter Capital Drilling advanced $0.9 million as
part of its staged strategic investment in laboratory testing
business MS Analytical. MS Analytical operates a central hub
laboratory in Vancouver, Canada, and an expanding network of
satellite laboratories in global emerging markets.
Market sentiment is optimistic, with gold and base metal prices
remaining strong and major mining companies anticipating budget
increases for drilling activities. The industry retains a
fundamental need to replace diminishing resources and reserves
depleted during the downturn, when exploration drilling was
significantly reduced. Given these conditions, the Company expects
a stronger financial performance in 2017 over the prior year and,
as a result of recent contract wins and the improved tendering
pipeline, the Company is increasing revenue guidance for FY17 to
$120 - $130 million, versus previous guidance of $105 - $112
million.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"Encouragingly, the Company has seen the strongest start to the
new financial year in terms of revenue growth for a number of
years. Following the traditional seasonal shutdown, we have seen
drilling programs recommence earlier in January than in recent
years, resulting in revenue growth of 13.6% over Q4 2016.
Our long-term production contracts continue to perform well and
we have commissioned new rigs at Sukari (Egypt) and North Mara
(Tanzania) during the quarter. In a further positive sign of
improving conditions, our operations at Geita (Tanzania) expanded,
with a further underground rig added to the rig fleet, along with
the purchase of a new blast hole rig for the site.
The increase in exploration activity evident in 2016 is
continuing. The Company has been awarded new and repeat exploration
contracts throughout the quarter, and we anticipate further
expansion opportunities throughout Q2.
For the remainder of the year, we anticipate leveraging our new
structure to meet the needs of our growing exploration and
production clients, maximising opportunities in the recent market
upturn, whilst maintaining a prudent approach to managing our
working capital and balance sheet."
For further information, please visit Capital Drilling's website
www.capdrill.com or contact:
Capital Drilling Limited +230 464 3250
Jamie Boyton, Executive Chairman investor@capdrill.com
Dewald van Tonder, Chief Financial Officer
finnCap Ltd +44 20 7220 0500
Christopher Raggett, Corporate Finance
Emily Morris/Simon Johnson, Corporate Broking
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Buchanan +44 20 7466 5000
Bobby Morse capitaldrilling@buchanan.uk.com
Gemma Mostyn-Owen
About Capital Drilling
Capital Drilling provides specialised drilling services to
mineral exploration and mining companies in emerging and developing
markets, for exploration, development and production stage
projects. The Company currently owns and operates a fleet of 93
drilling rigs with established operations in Botswana, Chile,
Egypt, Ethiopia, Kenya, Mali, Mauritania, Serbia and Tanzania. The
Group's corporate headquarters is in Mauritius.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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