TIDMCAPD
RNS Number : 7983W
Capital Limited
20 April 2023
FOR IMMEDIATE RELEASE
20 APRIL 2023
Capital Limited
("Capital", the "Group" or the "Company")
Q1 2023 Trading Update
Capital (LSE: CAPD), a leading mining services company, today
provides its trading update for the period 1 January to 31 March
2023 (the "Period").
FIRST QUARTER (Q1) 2023 KEY METRICS
Q1 2023 Q1 2022 vs Q4 2022 vs
Q1 2022 Q4 2022
====================== ========== ========== =========== ========== ===========
Revenue ($m) 77.8 66.9 16.3% 79.1 -1.6%
====================== ========== ========== =========== ========== ===========
ARPOR(#) ($) 192,000 174,000 10.3% 191,000 0.5%
---------------------- ---------- ---------- ----------- ---------- -----------
Average Utilised Rigs 95 90 5.6% 94 1.1%
====================== ========== ========== =========== ========== ===========
Fleet Utilisation (%) 77% 82% -6.1% 73% 5.5%
---------------------- ---------- ---------- ----------- ---------- -----------
Average Fleet 123 110 11.8% 129 -4.7%
====================== ========== ========== =========== ========== ===========
Closing Fleet Size 123 110 11.8% 129 -4.7%
All amounts are in USD unless otherwise stated
(#) Average revenue per month per operating rig
* Unaudited numbers
Financial Highlights
-- Revenue US$77.8 million, a 16.3% increase on Q1 2022 (US$66.9
million) and a 1.6% decrease on Q4 2022 (US$79.1 million);
-- Non-drilling revenue contributed 27% of total revenue in Q1
2023 with consistent Mining Services operations and MSALABS
continuing along its growth path;
-- Average monthly revenue per operating rig ("ARPOR") was
US$192,000 in Q1 2023, a 10.3% increase on Q1 2022 ($174,000) and
0.5% on Q4 2022 (US$191,000). We saw ARPOR pick up particularly in
Q4 2022 and expect higher levels to continue going forward. This
has been the direct result of our fleet repositioning strategy in
the latter half of 2022, with a focus away from shorter term
contracts in favour of large scale mine sites and world class
developments;
-- Final dividend of US 2.6 cps declared at the FY22 results for
the 2022 financial year (2021: US 2.4 cps), will be payable 09 May
2022.
Operational Update
-- Safety performance remains world-class with Q1 2023 Total
Recordable Injury Frequency Rate ("TRIFR") of 0.7 per 1,000,000
hours worked (FY 2022: 1.2).
-- Capital Drilling: Improving ARPOR following fleet repositioning strategy
- Fleet utilisation was 77% in Q1 2023, compared to 82% in Q1
2022 and 73% in Q4 2022. While we continue to see very strong
demand for our services, this level is close to our target
utilisation, allowing us to mobilise quickly to new projects and
also operate an effective maintenance strategy, key to ensuring we
provide a high quality of service;
- New contract wins:
-- An extension of the exploration drilling contract with
Perseus Mining at the Yaouré gold mine in Côte d'Ivoire;
- Recent Q1 2023 contract wins (previously announced):
-- A two-year diamond drilling services contract with Barrick at
the Reko Diq copper-gold project, Pakistan;
-- A three-year reverse circulation and diamond drilling
services contract with Fortescue Metals Group at the Belinga iron
ore project, Gabon;
-- A diamond drilling services contract with Kodal Minerals at
the Bougouni lithium project, Mali.
- Rig count decreased from 129 to 123 through Q1 2023. This is
the result of timing differences between decommissioning of old
rigs and replacement rigs commissioning. We continue to expect rig
count to end 2023 at similar levels to the end of 2022 as guided at
our FY22 results.
-- Capital Mining: Consistent performance continuing
- Sukari Gold Mine (Egypt) waste mining contract had another
strong performance through Q1 2023;
- Capital remains active in the tendering pipeline.
-- MSALABS: Continuing to deliver on its multi-year growth trajectory
- Chrysos' PhotonAssay(TM) unit rollout is progressing well:
-- MSALABS now has six units commissioned across Africa and
Canada, with a mine site laboratory at Barrick's Kibali gold mine,
and the commercial laboratory in Prince George, Canada successfully
commissioned in Q1 2023;
-- The expanded relationship with Chrysos will see MSALABS deploy 21 units by 2025;
- MSALABS extended into the Yukon region in Canada in Q1 2023,
where mining activity is rapidly growing, with a sample preparation
laboratory at Victoria Gold's Eagle mine.
- MSALABS commissioned in Q1 2023 a mine site laboratory at
Shanta Gold's Singida mine, Tanzania, and a laboratory in Bougouni,
Mali, which will support gold and lithium operations in southern
Mali.
Outlook
-- Revenue guidance for 2023 remains $320 to $340 million as guided at our FY22 results;
-- Capital Drilling will continue to see improvement in the
contract portfolio, as evidenced in the strengthening ARPOR run
rates. While planned decommissioning lowered the rig count through
Q1 2023, replacement rigs will bring our total fleet size back up
to similar levels as the end of 2022, as guided at our FY22
results;
-- Capital Mining will remain robust through 2023 with the
Sukari earth moving contract expected to perform at steady state
through the year while we continue to progress opportunities in the
tendering market;
-- MSALABS will continue its multi-year laboratory roll out, particularly focused on Chrysos PhotonAssay(TM) units, and has got off to a strong start in Q1 2023. Guidance for MSALABS remains $40-50 million for 2023, as guided at our FY22 results, and another significant increase YoY (FY 2022: $27.3 million);
-- Tendering activity remains robust across the Group with a
number of opportunities progressing.
Commenting on the trading update, Peter Stokes, Chief Executive,
said:
"The Group has got off to a strong start in 2023 across all our
business units and we remain confident in the $320-340 million
revenue guidance we set at our FY22 results a little over a month
ago. Our mining business at Sukari will remain at steady state
through the year but MSALABS is set to grow significantly again YoY
as it continues to build its global network, skewing Group revenues
more to the second half.
What has been particularly pleasing in Q1 2023 is the ongoing
improvement we have seen in our drilling business's ARPOR, largely
a direct result of our efforts to reposition and strengthen the
portfolio suite through the back half of last year. Through
contract extensions such as with Perseus in Cote d'Ivoire as
announced today, or through the addition of contracts on world
class projects such as Barrick's Reko Diq copper project and FMG's
Belinga iron ore project announced earlier this year, we expend
this trend in ARPOR to continue positively."
Our fleet remains highly utilised, our safety performance world
class and we continue to see a strong tender pipeline of
opportunities. This provides us a solid platform to achieve another
record year milestone for 2023."
- ENDS -
For further information, please visit Capital Limited's website
www.capdrill.com or contact:
Capital Limited +230 464 3250
Jamie Boyton, Executive Chairman investor@capdrill.com
Peter Stokes, Chief Executive Officer
Rick Robson, Chief Financial Officer
Conor Rowley, Investor Relations & Corporate Development
Manager
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Stifel Nicolaus Europe Limited +44 20 7710 7600
Ashton Clanfield
Callum Stewart
Rory Blundell
Buchanan +44 20 7466 5000
Bobby Morse capital@buchanan.uk.com
George Pope
About Capital Limited
Capital Limited is a leading mining services company providing a
complete range of drilling, mining, maintenance and geochemical
laboratory solutions to customers within the global minerals
industry, focusing on the African markets. The Company's services
include: exploration, delineation and production drilling; load and
haul services; maintenance; and geochemical analysis. The Group's
corporate headquarters are in Mauritius and it has established
operations in Côte d'Ivoire, Canada, Democratic Republic of Congo,
Egypt, Guinea, Kenya, Mali, Mauritania, Nigeria, Pakistan, Saudi
Arabia, Sudan and Tanzania.
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END
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