TIDMCAPD
RNS Number : 7973F
Capital Drilling Limited
17 July 2019
For Immediate Release 17 July 2019
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
H1 Trading Update
Capital Drilling Limited (CAPD: LN), a leading drilling
solutions company focused on the African markets, today provides
its trading update for the period 1 January to 30 June 2019 (the
"Period"). The Company will announce its half year results and
provide further operational updates on 22 August 2019.
First Half (H1) 2019 Key Metrics
H1 2019 H1 2018 H2 2018 % change % change
from H1 2018 from H2 2018
--------------------- --------- --------- --------- --------------- ---------------
Revenue ($million) 54.7 54.5 61.5 0.4% -11.1%
--------------------- --------- --------- --------- --------------- ---------------
ARPOR ($) 183,000 200,000 189,000 -8.5% -3.2%
--------------------- --------- --------- --------- --------------- ---------------
Average utilised
rigs 48 43 52 11.6% -7.7%
--------------------- --------- --------- --------- --------------- ---------------
Fleet Utilisation
(%) 52 46 56 13.0% -7.1%
--------------------- --------- --------- --------- --------------- ---------------
Average Fleet 91 94 92 -3.2% -1.1%
--------------------- --------- --------- --------- --------------- ---------------
Closing fleet
size 92 95 91 -3.2% 1.1%
--------------------- --------- --------- --------- --------------- ---------------
Second Quarter (Q2) 2019 Key Metrics
Q2 2019 Q2 2018 Q1 2019 % change % change
from Q2 2018 from Q1 2019
--------------------- --------- --------------- -------------- --------------- ---------------
Revenue ($million) 27.7 27.8 27.0 -0.4% 2.6%
--------------------- --------- --------------- -------------- --------------- ---------------
ARPOR ($) 182,000 195,000 183,000 -6.7% -0.5%
--------------------- --------- --------------- -------------- --------------- ---------------
Average utilised
rigs 48 45 47 6.7% 2.1%
--------------------- --------- --------------- -------------- --------------- ---------------
Fleet Utilisation
(%) 52 48 52 8.3% 0.0%
--------------------- --------- --------------- -------------- --------------- ---------------
Average Fleet 92 94 91 -2.1% 1.1%
--------------------- --------- --------------- -------------- --------------- ---------------
Closing fleet
size 92 95 91 -3.2% 1.1%
--------------------- --------- --------------- -------------- --------------- ---------------
Financial Highlights
-- Revenue Q2 2019 ($27.7 million) up 2.6% on Q1 2019 ($27.0 million)
-- Revenue H1 2019 $54.7 million, representing an increase of
0.4% on H1 2018 ($54.5 million). Revenue decreased by 11.1% on H2
2018 ($61.5 million), however revenue is anticipated to increase in
the second half of the year
-- Solid H1 2019 ARPOR of $183,000, down 3.2% on H2 2018
($189,000), Q2 2019 down a marginal 0.5% ($182,000) on Q1 2019
($183,000), primarily due to new contract mobilisations
-- Paid a final dividend of US1.5cps for 2018 financial year in
May 2019, an increase of 25% on US1.2cps for the 2017 financial
year
-- The Group maintains guidance on anticipated revenues for the
current financial year of $110-120 million, with revenue expected
to increase in H2, consistent with 2018
Operational Highlights
-- Maintained robust ARPOR with continued strong performance on key contracts
-- Purchased an additional blast hole rig for the long-term
contract at Sukari Gold Mine (Egypt), as part of the Group's
ongoing fleet management
-- Further progress in the establishment of our West African
operations, with drilling commencing in Burkina Faso with Golden
Rim Resources in May
-- Awarded first drilling contract in Nigeria with Thor
Explorations Ltd with drilling scheduled to commence in Q4
-- Appointment of Jodie North as Chief Operating Officer
-- Increased Business Development resources, appointing Chris
Hall to position of Business Development Manager, West Africa
-- Maintained ongoing rig improvement program, with further
deployment of rigs to high-growth West African region, currently in
transit
-- Achieved a number of world class safety records including:
- Sukari Gold Mine (Egypt) achieved two years LTI free in January
- North Mara Gold Mine (Tanzania) achieved three years LTI free in March
- Geita Gold Mine (Tanzania) achieved two years LTI free in March
- Tasiast Gold Mine (Mauritania) achieved two years LTI free in June
- Syama Gold Mine (Mali) achieved three years LTI free in June
Contract Awards
Capital Drilling was awarded a number of new contracts during
the first six months. These contract wins reflect the Company's
increased presence within West Africa, including the additional
infrastructure and facilities established during 2018, and the
appointment of a further Business Development resource to focus on
the region in Q1 2019. Contract wins include:
-- Compass Gold Corp (Sikasso, Mali). Awarded a 10,000m
exploration drilling contract, utilising one reverse circulation
and one diamond rig from the existing fleet. Drilling commenced in
June
-- Golden Rim Resources (Kouri, Burkina Faso) (previously
announced). Awarded a 20,000m exploration drilling contract
utilising one multi-purpose rig from the existing fleet. Drilling
commenced in May
-- Allied Gold Corp (Bonikro, Côte d'Ivoire). Awarded a
five-year exploration drilling contract, utilising one diamond rig
and one reverse circulation rig from the existing fleet. Drilling
is scheduled to commence in Q4
-- Thor Explorations Ltd (Segilola, Nigeria). Awarded a
five-year exploration and grade control contract, utilising one
reverse circulation rig from the existing fleet. This will
transition to grade control in 2020, with exploration drilling
scheduled to commence in Q4 and grade control in 1H 2020
-- Kinross Gold Corp: (Tasiast, Mauritania): MSALABs was awarded
a three-year onsite laboratory services contract with Kinross at
the Tasiast Gold Mine, Mauritania. Operations commenced in July
2019
-- Resolute Mining Ltd (Syama, Mali). Awarded one-year extension
of the long-term underground grade control drilling contract
utilising two underground rigs from the existing fleet. Contract
extended to June 2020
Trading Update and Outlook
Capital Drilling generated revenue of $27.7 million during Q2
2019, representing an increase of 2.6% on the previous period (Q1
2019: $27.0 million) and a marginal 0.4% decrease over Q2 2018
($27.8 million). ARPOR decreased marginally by 0.5% ($182,000) over
Q1 2019 ($183,000) and down 8.5% from H1 2018 ($200,000) as a
result of new contract mobilisations to Compass Gold (Mali) and
Golden Rim Resources (Burkina Faso). Revenue increased marginally
over the previous corresponding period to $54.7 million (H1 2018:
$54.5 million). The result remains in line with Company guidance
with an improved revenue performance expected for the second half,
consistent with the performance in 2018 and following new contract
starts detailed above.
Significant progress has been made during the half developing a
solid pipeline of new opportunities, as indicated by new contract
wins announced above. This positions the company well for the
remainder of the year with new contracts expected to contribute to
additional revenue from late Q3.
The Company's long-term contracts continue to perform well. It
is encouraging to see an extension of the underground contract with
Resolute Mining at its Syama Gold Mine in Mali, together with the
award of two additional long-term drilling contracts with Thor
Explorations in Nigeria and Allied Gold Corp in Côte d'Ivoire.
MSALAB's three-year contract with Kinross in Mauritania further
adds to the Company's long-term contract portfolio. It is also
pleasing that our new business development strategy has seen
Capital Drilling enter the new markets of Burkina Faso and Nigeria,
as well as securing additional new clients within our established
West African countries of operation.
Encouraging signs in the market remain, with recent firmness in
the gold price positive for Capital Drilling given that the gold
mining sector represents 90% of our overall business by revenue.
The current gold price is driving renewed interest from equity
markets in the exploration sector, which together with improved
operating cashflow from the mining companies, will continue to
drive an increase in exploration budgets. Combined with the success
of the Company's business development activities in securing new
contracts, these are positive indicators and underpin our
confidence in our growth plans for the remainder of the year.
As previously announced, the Company paid a final dividend for
the 2018 period of US1.5cps (US$2.04 million), payable on 3 May
2019. This represents a 25% increase on the final 2017
dividend.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"The first half of the year was focused on further consolidating
Capital Drilling's presence in the highly active West African
market, with a number of new contracts awarded, which will
contribute to Group revenues from the end of Q3. This strong push
into this region has seen the commencement of our first drilling
contract in Burkina Faso during Q2. Today we have also announced
our expansion into Nigeria from Q4, a mineral rich yet poorly
explored country with significant potential, where we already
operate a successful mineral analytics laboratory. Pleasingly, our
major operations have also continued to achieve significant safety
milestones throughout the first half."
- ENDS -
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
André Koekemoer, Chief Financial Officer
Peel Hunt LLP +44 20 7418 8900
Ross Allister
James Bavister
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Buchanan +44 20 7466 5000
Bobby Morse capitaldrilling@buchanan.uk.com
James Husband
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 92
drilling rigs with established operations in Botswana, Burkina
Faso, Côte d'Ivoire, Egypt, Kenya, Mali, Mauritania, Nigeria and
Tanzania. The Group's corporate headquarters are in Mauritius.
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END
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