TIDMCAPD
RNS Number : 0335U
Capital Drilling Limited
10 July 2018
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
H1 Trading Update
Capital Drilling, a leading drilling solutions company focused
on the African markets, today provides its trading update for the
period 1 January to 30 June 2018. The Company will announce its
half year results and provide further operational updates on 16
August 2018.
First Half (H1) 2018 Key Metrics
H1 2018 H1 2017 H2 2017 % change % change
from from
H1 2017 H2 2017
------------------- -------- -------- -------- --------- ---------
Revenue
($million) 54.5 62.3 57.1 -12.5% -4.6%
------------------- -------- -------- -------- --------- ---------
ARPOR ($) 200,000 191,000 198,000 4.7% 1.0%
Average
utilised
rigs 43 52 46 -17.3% -6.5%
------------------- -------- -------- -------- --------- ---------
Fleet Utilisation
(%) 46% 56% 49% -17.9% -6.1%
Average
Fleet 94 93 93 1.1% 1.1%
------------------- -------- -------- -------- --------- ---------
Closing
fleet size 95 93 93 2.2% 2.2%
------------------- -------- -------- -------- --------- ---------
Second Quarter (Q2) 2018 Key Metrics
Q2 2018 Q2 2017 Q1 2018 % change % change
from Q2 from Q1
2017 2018
------------------- -------- -------- -------- --------- ---------
Revenue
($million) 27.8 30.7 26.6 -9.4% 4.5%
------------------- -------- -------- -------- --------- ---------
ARPOR ($) 195,000 186,000 205,000 4.8% -4.9%
Average
utilised
rigs 45 53 41 -15.1% 9.8%
------------------- -------- -------- -------- --------- ---------
Fleet Utilisation
(%) 48% 57% 44% -15.8% 9.1%
Average
Fleet 94 94 93 0% 1.1%
------------------- -------- -------- -------- --------- ---------
Closing
fleet size 95 93 93 2.2% 2.2%
------------------- -------- -------- -------- --------- ---------
Financial Highlights
-- Revenue Q2 2018 ($27.8 million) up 4.5% on Q1 2018 ($26.6
million) due to improved fleet utilisation of the Group's
exploration rigs
-- Revenue H1 2018 $54.5 million, representing a decrease of
4.6% on H2 2017 ($57.1 million) and 12.5% on H1 2017 ($62.3
million)
-- H1 2018 ARPOR up 1.0% ($200,000) on H2 2017 ($198,000), a continued solid performance
-- Paid a final dividend of US1.2cps for 2017 financial year in May 2018
-- The Group provided new guidance on our anticipated revenues
for the current financial year to $105-115 million, up from
$100-110 million, on 18 June 2018
Operational Highlights
-- Continued strength in ARPOR reflecting strong contract performance
-- Two new Production rigs deployed at Sukari (Egypt) and North Mara (Tanzania)
-- Made significant progress expanding the Group's presence in
the West Africa region, including asset mobilisations which
increased our rig number to 26 rigs, with further rigs scheduled
for Q3 arrival
-- Established infrastructure with offices, warehouses,
workshops and accommodation in Bamako, Mali, and Yamoussoukro, Côte
d'Ivoire, adding to the existing presence in Mauritania
-- Appointed a Business Development Manager, Julian Blake, initially based in Ghana
-- Announced numerous contract awards, specifically:
- Aton Resources (Egypt): one rig, drilling in Q3
- De Beers (Botswana): two rigs, drilling in Q3
- Graphex Mining (Tanzania): one rig, drilling in Q3
- Hummingbird (Mali): four rigs, commenced in July
- Kinross (Mauritania): Two year drill rig maintenance contract
for two blast hole rigs, commenced in Q2
- Resolute (Mali): Awarded a three year surface exploration
drilling contract, currently drilling with three rigs
-- Achievement of world class safety milestones, including:
- Mali (Syama Project) achieved two years LTI free in June 2018
- Tanzania (North Mara Project) achieved two years LTI free in March 2018
- Tanzania (Geita Project) achieved one year LTI free in March 2018
Trading Update and Outlook
Capital Drilling generated revenue of $27.8 million during Q2
2018, representing an increase of 4.5% on the previous period (Q1
2018: $26.6 million) and a 9.4% decrease over Q2 2017 ($30.7
million). ARPOR increased 4.7% ($200,000) over H1 2017 ($191,000).
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 half increasing the Group's presence in West Africa,
with the establishment of key infrastructure and significant asset
mobilisations. The group had 26 rigs in Côte d'Ivoire, Mali and
Mauritania at June 30, with a further six rigs now scheduled for
shipping during Q3 2018.
The Company's long-term mining and production contracts
continued to perform well over the period, with strong contract
performance contributing to ARPOR to $200,000 over H1 2018. The
award of a three year contract covering the surface drilling
requirements for Resolute in Mali further strengthen the Group's
contract profile, adding greater depth to 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
remains buoyant and we are seeing further strength in the
exploration markets and increasing drilling budgets from major
mining companies. 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 Company paid a final dividend for
the 2017 period of US1.2cps (US$1.63 million), on 18 May 2018. This
represents a 20% increase on the final 2017 dividend.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"The building of our business in West Africa has been the major
focus of our growth strategy over the past 6 months. The investment
in building new operational centres in Côte d'Ivoire and Mali will
provide infrastructure to deploy further production and exploration
rigs, into what is regarded as one of the fastest growing drilling
markets in the industry. With the announced new contracts due to
start over the coming months, we expect to see our utilisation rate
further increase over the second half, which fully underpins the
investment we have made to target the West African market. We are
pleased to have had another exceptional quarter in terms of our
safety record, which remains at the heart of our strategy."
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
Camille Gochez, 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 95
drilling rigs with established operations in Botswana, Côte
d'Ivoire, Egypt, Ghana, Kenya, Mali, Mauritania and Tanzania. The
Group's corporate headquarters are in Mauritius.
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contact rns@lseg.com or visit www.rns.com.
END
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