TIDMCAPD
RNS Number : 1927M
Capital Drilling Limited
26 April 2018
For Immediate Release 26 April 2018
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
Q1 Trading Update
Capital Drilling, a leading drilling solutions company focused
on the African markets, today provides its Q1 2018 trading update
for the period to 25 April 2018.
FIRST QUARTER (Q1) 2018 KEY METRICS
Q1 2018 Q1 2017 Q4 2017 % change % change
from from
Q1 2017 Q4 2017
Revenue
(US$m) 26.6 31.6 27.1 -15.8% -1.8%
ARPOR*(US$) 205,000 196,000 198,000 4.6% 3.5%
Average
utilised
rigs 41 51 43 -19.6% -4.7%
Fleet Utilisation
(%) 44% 55% 47% -20.0% -6.4%
Average
Fleet 93 93 92 0% 1.1%
Closing
fleet size 93 93 93 0% 0%
* Average monthly revenue per operating rig
Financial Highlights
-- Revenue of $26.6 million, representing a decrease of 1.8% on
Q4 2017 ($27.1 million) and 15.8% on Q1 2017 ($31.6 million).
-- ARPOR up 3.5% ($205,000) on Q4 2017 ($198,000).
-- Declared a final dividend of US1.2cps for 2018 financial year, payable on May 18, 2018.
-- Maintained strong balance sheet.
-- Company well positioned for anticipated uplift in demand.
Operational Highlights
-- Continued improvement in ARPOR reflecting strong contract performance.
-- Lower utilisation reflective of the movement of 15 rigs into
the high growth West African markets.
-- Established full facilities including offices, accommodation,
warehousing and mechanical support in Bamako, Mali.
-- Established office, accommodation and warehousing facilities
in Yamoussoukro, Côte d'Ivoire.
-- Expanded rig presence in West Africa with 12 rigs now landed
in the region, in addition to the rigs operating under long term
contracts in Mali and Mauritania.
-- Awarded a three year surface drilling contract for Resolute
in Mali, announced to the market on 11 April 2018. Capital Drilling
currently operates five rigs for Resolute at the Syama Gold Mine,
with three surface rigs and a further two underground rigs also
operating under a three year contract.
-- Completed an exploration contract for OreCorp in Mauritania.
-- Achievement of world class safety milestones, including:
- Tanzania (North Mara Project) achieved two years LTI free in March 2018
- Tanzania (Geita Project) achieved one year LTI free in March 2017.
Trading Update and Outlook
Capital Drilling generated revenue of $26.6 million during Q1
2018, representing a decrease of 1.8% on the previous period (Q4
2017: $27.1 million) and a 15.8% decrease over Q1 2017 ($31.6
million). ARPOR increased 3.5% ($205,000) over Q4 2017 ($198,000).
The revenue results are in line with Company guidance and reflect
the continued efforts of the Group to redeploy idle rigs to the
high growth West African markets. Substantial progress was made
over the first quarter with the move into West Africa, with a total
of 12 rigs arriving in the region, adding to the 13 already located
in Mali and Mauritania. With further rigs scheduled to arrive in
the second quarter we will have one of the largest fleets in this
high-growth region.
The Company's long-term mining and production contracts
continued to perform well over the period, with improved contract
performance contributing to further growth in ARPOR to $205,000.
The award of a three year contract covering the surface drilling
requirements for Resolute in Mali was a significant win for the
Group, and further expands the portfolio of mine site based, long
life contracts.
Capital markets activities continued apace over the first
quarter and there has been an increase in tendering activity
levels, reflecting stronger market conditions and Capital
Drilling's increased presence in West Africa. Market sentiment is
optimistic, with gold and base metal prices remaining strong and
major mining companies anticipating budget increases for drilling
activities. There remains a fundamental requirement from the mining
industry to replace resources and reserves depleted during the
downturn, when exploration drilling was significantly reduced due
to budgetary constraints. We remain confident that we will secure
further contract wins in the current quarter.
As previously announced, the Board of Directors declared a final
dividend for the 2017 period of US1.2cps (US$1.63 million), payable
on 18 May 2018. This represents a 20% increase on the final 2017
dividend.
Tanzanian Update / Local Content Rules
Capital Drilling has submitted preliminary local content plans
to the Tanzanian Government, in line with the new local content
regulations that came into force on April 10, 2018. Within these
documented plans we have provided extensive detail on the Group's
progress to enhance and develop our local supply chain and increase
local employment in the workforce. We intend to work with the
Government to clarify the requirements of the new local content
regulations and to practically meet these requirements where
possible. We are pleased to see that the formation of the Mining
Commission has now occurred and we will continue to seek advice on
clarification of specific points around these regulations and the
practical implications thereof.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"Capital Drilling executed its strategy of building its next
platform of growth by targeting the fast growing West African
market during the last two quarters. As a result of asset
mobilisations, the Company now has over a quarter of its young
fleet located in this exciting growth region. This transition has
been implemented in line with our expectations and we are pleased
to see an increase in tendering activity, as well as the award of a
three year drilling contract with Resolute in Mali. Our established
operations have continued to perform strongly, enabling the Group
to declare a final dividend during the current period, while
maintaining a strong balance sheet. We look forward to capitalising
on our strong position in what is a new and exciting market for
Capital Drilling."
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
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, Côte
d'Ivoire, Egypt, Ethiopia, Kenya, Mali, Mauritania and Tanzania.
The Group's corporate headquarters are in Mauritius.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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