TIDMCAPD
RNS Number : 8535J
Capital Drilling Limited
16 April 2020
For Immediate Release 16 April 2020
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
Q1 Trading and COVID-19 Update
Capital Drilling Limited (CAPD: LN), a leading mining services
company focused on the African markets, today provides its Q1 2020
trading update for the period ended 31 March 2020 (the "Period"),
together with an update on the COVID-19 situation.
FIRST QUARTER (Q1) 2020 KEY METRICS
Q1 2020 Q1 2019 Q4 2019 % change % change
from from
Q1 2019 Q4 2019
-------------------- --------- --------- --------- ---------- ----------
Revenue (US$m) 32.5 27.0 30.7 20.4% 5.9%
-------------------- --------- --------- --------- ---------- ----------
ARPOR*(US$) 170,000 183,000 167,000 -7.1% 1.8%
-------------------- --------- --------- --------- ---------- ----------
Average utilised
rigs 56 47 55 19.1% 1.8%
-------------------- --------- --------- --------- ---------- ----------
Fleet Utilisation
(%) 57% 52% 59% 9.6% -3.4%
-------------------- --------- --------- --------- ---------- ----------
Average Fleet 98 91 93 7.7% 5.4%
-------------------- --------- --------- --------- ---------- ----------
Closing fleet
size 99 91 95 8.8% 4.2%
-------------------- --------- --------- --------- ---------- ----------
* Average monthly revenue per operating rig
Financial Highlights
-- Revenue US$32.5 million, a 20.4% increase on Q1 2019 (US$27.0
million) and a 5.9% increase on Q4 2019 (US$30.7 million);
-- Mine-site services continue to underpin revenue streams, contributing 93% of Group revenue;
-- Strong growth in non-drilling revenue contribution (12% of
total revenue) compared with Q1 2019 (4%), driven by MSALABS, Well
Force and Capital Mining Services (CMS);
-- West African region contributed 32% to Group revenues in Q1,
a 61% increase compared to Q1 2019 (20%);
-- Average monthly revenue per operating rig ("ARPOR") increased
1.8% (US$170,000) on Q4 2019 (US$167,000) attributed to
strengthening revenue contributions from new contracts (Allied Gold
Corp in Côte d'Ivoire and Barrick Ma'aden in Saudi Arabia),
together with improved performance at long-term contracts (Resolute
and Hummingbird in Mali);
-- Declared a second interim dividend of US 0.7 cps for 2019
financial year in lieu of final dividend (2018: US 1.5 cps),
payable 4 May 2020.
Operational Highlights
-- Awarded a two-year extension of surface exploration and
delineation drilling contract at Hummingbird's Yanfolila Gold Mine
(Mali) to March 2022;
-- Commenced new contracts and contract extensions (previously
announced) in Tanzania, including:
- Bulyanhulu Gold Mine (Barrick) - commenced drilling in
February. Significantly this is Capital Drilling's third contract
with Barrick, following commencement of our recent contract in
Saudi Arabia together with ongoing long-term contract at North
Mara;
- North Mara Gold Mine (Barrick) - a long-term production
drilling contract extension, with additional scope for underground
drilling services; and
- Extension of underground drilling services at Geita Gold Mine
(AngloGold Ashanti) to December 2020.
-- MSALABS commenced a six-month contract with Endeavour Mining
in Côte d'Ivoire in January and was awarded a further contract with
Tudor Gold, due to commence Q2 2020 (previously announced);
-- Achieved a number of world class safety records including:
- Mwanza facility (Tanzania) achieved twelve years LTI free in January;
- North Mara Gold Mine (Tanzania) achieved four years LTI free in March;
- Sukari Gold Mine (Egypt) achieved three years LTI free in January; and
- Geita Gold Mine (Tanzania) achieved three years LTI free in March;
-- Solid and improved performance at the Bonikro project in Côte
d'Ivoire in our first full quarter of operations;
-- The Group's key long-term contracts continue to perform well
with strong performances at AngloGold Ashanti's Geita Gold Mine
(Tanzania), Centamin's Sukari Gold Mine (Egypt), Resolute's Syama
Gold Mine (Mali) and Hummingbird's Yanfolila Gold Mine (Mali);
-- Increase in fleet utilisation to 57% (Q1 2019: 52%)
reflecting the Group's ongoing success in securing contracts with
new and existing clients and despite increased average fleet to 98
rigs (Q1 2019: 91 rigs);
-- Four new rigs commissioned during Q1 to support new long-term contracts.
COVID-19 Update
-- The COVID-19 pandemic continues to create uncertainty
globally, however mining and production activity have continued
uninterrupted at all the Group's operations and with no recorded
cases of COVID-19 on these sites to date;
-- Strong Q1 revenue result demonstrates that Capital Drilling
has been largely unaffected during the quarter, however as we enter
Q2 global travel restrictions are beginning to impact expat
employee roster rotations with those on site working extended
rosters;
-- In response to extended rosters for both expats and
nationals, fatigue management policies have been implemented
on-site in the form of shortened weekly rosters which will
marginally reduce on-site activity in the current quarter;
-- The Group's supply chain movement is primarily land and sea
based and remains largely unaffected. The majority of restrictions
have been attributed to air-freight movements;
-- Greenfield exploration activity is temporarily put on hold at
the moment as juniors find it difficult to access capital markets
and exploration programs are deferred pending stabilisation of the
current situation.
Outlook
-- Our portfolio of eight long-term mine-site based contracts
provides a level of revenue stability against the global risk
exposure created by the COVID-19 pandemic, as mines continue to
operate with gold exports continuing;
-- Capital Drilling's broader client base and extension of
services provides a platform for further revenue and growth;
-- The company continues to be well positioned for an
anticipated uplift in demand, especially in West Africa as is
evidenced by the increased regional contribution to revenue;
-- The gold price remains highly supportive and has continued to
rally during the quarter, reaching seven year highs early in Q2, a
positive indicator given c.90% of revenue is derived from the gold
sector.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"It is pleasing to see the activity undertaken during 2019 to
position the business for growth is now delivering improved revenue
performance. Additionally, revenue from our non-drilling businesses
has grown strongly over the last 12 months, as we further
strengthened our services portfolio. Most importantly, our strong
safety performance continued with a number of LTI milestones across
our operations. Notwithstanding these positive results, the
COVID-19 pandemic continues to create uncertainty globally. We are
closely monitoring developments and keeping our employees safe
remains our first priority. We have experienced some disruption to
international employee travel and have adjusted our business
accordingly but have remained largely unaffected to date. Our
long-term contracts at operating mine sites provide revenue
stability during this time, with operations continuing
uninterrupted to this point. Despite the current levels of
uncertainty, we remain well positioned to pursue new opportunities
and the rising gold price continues to underpin the strength of
Capital Drilling's operations. We will continue to focus on growth
of our business in West Africa in conjuction with broadening our
service offerings to our clients, together with opportunities
presented by our successful expansion into mining services.
-S -
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
Rick Robson, Executive - Corporate Development
André Koekemoer, Chief Financial Officer
Berenberg +44 20 3207 7800
Matthew Armitt
Jennifer Wyllie
Detlir Elezi
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Buchanan +44 20 7466 5000
Bobby Morse capitaldrilling@buchanan.uk.com
Kelsey Traynor
James Husband
About Capital Drilling
Capital Drilling is a leading mining services business providing
a complete range of drilling and mine site services to mineral
exploration and mining companies, with a focus on the African
markets. The company's services include: exploration, development,
drill and blast and grade control drilling for surface and
underground projects and load and haul services. The Group's
corporate headquarters are in Mauritius and it has established
operations in Botswana, Burkina Faso, Côte d'Ivoire, Egypt, Mali,
Mauritania, Namibia, Nigeria, Saudi Arabia and Tanzania.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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