TIDMCAPD
RNS Number : 0462U
Capital Drilling Limited
19 October 2017
For Immediate Release 19 October 2017
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
Q3 Trading Update
Capital Drilling Limited (CAPD:LN), a leading drilling solutions
company focused on emerging and developing markets, today provides
its Q3 2017 trading update for the period to 18 October 2017.
THIRD QUARTER (Q3) 2017 KEY METRICS
Q3 2017 Q3 2016 Q2 2017 % change % change
from from
Q3 2016 Q2 2017
Revenue
($m) 30.0 23.8 30.7 26% -2%
ARPOR(#)
($) 198,000 187,000 186,000 6% 6%
Average
utilised
rigs 48 40 53 20% -9%
Fleet Utilisation
(%) 52 43 57 21% -9%
Average
Fleet 93 95 94 -2% -1%
Closing
fleet size 92 95 93 -3% -1%
(#) Average revenue per operating rig
Financial Highlights
-- Revenue of $30.0 million, representing 26% growth on Q3 2016
($23.8 million), similar to Q2 2017 ($30.7 million)
-- Strongest third quarter revenue result since 2012
-- Declared an Interim dividend of USD 0.5 cent per share for
the H1 2017 period, paid on 6 October 2017 (2016: Interim dividend
of USD1.5 cents per share)
-- Maintained strong balance sheet and enhanced discipline around capital expenditure
-- Completed the phased strategic investment in A2 Global
Ventures with Capital Drilling now holding a 50% interest in the
minerals testing business
-- Guidance maintained for FY 2017
Operational Highlights
-- Strong ARPOR performance driven by continued solid
performance across the Group's key production contracts at the
Sukari Mine (Egypt - Centamin), the North Mara Mine (Tanzania -
Acacia) and the Geita Gold Mine (Tanzania - AngloGold Ashanti)
-- Utilisation decreased to 52% (from 57% in Q2 2017) reflecting
the completion of drilling activities in Serbia and an easing in
delineation drilling activities in Tanzania
-- Further expanded mine site drilling activity with the ramp up
of grade control drilling at the Tasiast Mine (Kinross) in
Mauritania (two rigs) and the commencement of underground drilling
at the Syama Mine (Resolute) in Mali (one rig commenced in Q3)
-- Successfully completed previously announced exploration
contracts for new and existing customers:
- Aura Energy (Mauritania): One rig program completed over Q3
- Algold (Mauritania): Phase 3 program completed with Phase 4
program scheduled to commence in Q4 (three rigs)
- Thani Stratex (Egypt): Phase 3 (one rig) program completed over Q3 (one rig)
-- Took delivery of an additional blast hole rig for the Geita
Gold Mine in Tanzania with commissioning scheduled for Q4
-- Significant progress made with corporate integration of MS
Analytical including the completion of Capital Drilling's
investment to earn 50%
Trading Update and Outlook
Capital Drilling generated revenue of $30.0 million during Q3
2017, representing an increase of 26% on the same period last year
(Q3 2016: $23.8 million). ARPOR increased 6% ($198,000) over Q2
2017 ($186,000), primarily due to improved consistency of drilling
at the Group's production contracts. The Group's revenue results
continue to reflect the cyclical recovery in demand providing
positive demand support for the mineral drilling industry. Revenue
did however record a marginal decline on Q2 2017 (Q2: $30.7
million) due to the completion of drilling activities in Serbia,
which contributed to rig utilisation of 52%, a 9% decrease to Q2
2017 (Q2: 57%).
During the period the Group acquired two additional underground
rigs to support the newly awarded three year Syama underground
drilling contract in Mali. The first rig arrived on site and
commenced drilling during Q3, with the second rig scheduled to
commence drilling in the current quarter. Capital Drilling also
recently took delivery of a new blast hole rig at the Geita Gold
Mine in Tanzania which will be commissioned in October. The early
conclusion of drilling in Serbia enabled Capital Drilling to
dispose of two rigs in-country, with other assets strategically
redeployed to Mauritania and Mali.
Capital Drilling has been awarded the Phase 4 drilling program
for Algold Resources in Mauritania which will initially require
three rigs, with drilling to commence in late Q4. The Group remains
in active discussions with multiple new and existing customers and
is confident of further exploration contract wins in the current
period.
As previously announced, the Board of Directors declared an
interim dividend for H1 2017 of 0.5cps ($0.7 million), which was
paid on to shareholders on 6 October 2017. A final payment of $950k
was made to acquire a 50% stake in A2 Global (MS Analytical), with
Capital Drilling taking two seats on the Board. MS Analytical
operates a central hub minerals testing laboratory in Vancouver,
Canada, and an expanding network of satellite laboratories in
global emerging markets.
Strong cash generation facilitated the repayment of $1.5 million
on our current revolving credit facility with Standard Bank,
reducing the Group's gross debt to $13.5 million. Discussions on a
refinance of this facility are at an advanced stage and we expect
to update the market on our progress in the current quarter.
Capital Drilling has seen continuing improvements in market
conditions with metal prices and capital markets activities
continuing to be highly supportive of increased drilling activity
levels. While the Group has seen a material increase in revenue
over 2016, there has been in recent months a moderation in demand,
primarily driven by the completion of drilling activities in
Serbia, reduced delineation activity in Tanzania and most recently
reduced activity levels in Kenya.
The Group maintains a robust balance sheet, strong cash
generation and a competitive operating model, placing it in a solid
position to capitalise on the improving conditions. Capital
Drilling remains on track on its guidance for 2017.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"Capital Drilling delivered a solid performance in Q3, with
revenues up 26% compared to the same quarter in 2016. Cash
generation remained strong enabling a reduction in gross debt,
payment of the Group's interim dividend, in addition to payment of
the outstanding cash consideration to earn 50% of A2 Global
Ventures. Market conditions have continued with the positive
momentum in 2017 and shown further signs of strength in this
current quarter."
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, 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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