08:00 Thu 16 Apr 2020
Capital Drilling Ltd - Q1 Trading and COVID-19 Update
For Immediate Release |
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Q1 Trading and COVID-19 Update
FIRST QUARTER (Q1) 2020 KEY METRICS
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Q1 2020 |
Q1 2019 |
Q4 2019 |
% change from Q1 2019 |
% change from 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
· 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% (
· 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
Operational Highlights
· Awarded a two-year extension of surface exploration and delineation drilling contract at
· Commenced new contracts and contract extensions (previously announced) in
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- Extension of underground drilling services at
· 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 (
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· 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
· 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
· 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;
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· The company continues to be well positioned for an anticipated uplift in demand, especially in
· 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,
"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
- ENDS -
For further information, please visit
Jamie Boyton, Executive Chairman investor@capdrill.com
Rick Robson, Executive -
André Koekemoer, Chief Financial Officer
Berenberg +44 20 3207 7800
Matthew Armitt
Jennifer Wyllie
Detlir Elezi
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.
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