Capital Drilling Limited (LON:CAPD) has seen a marked upturn in activity as confidence in the mining sector returns.
Mark Parsons, chief executive, said: "The improvement of rig utilisation from 34% in January to 59% in December 2016 underpinned what was a very strong year of growth for Capital Drilling.
“The financial metrics of the business have significantly strengthened in line with the improvement in the mining sector.”
Revenues over the year rose 19% to US$93.4mln (US$78.7mln), while underlying earnings rose by 32% to US$13.1mln.
Net losses more than halved to US$4.8mln from US$10.2mln.
Fourth quarter revenue was the highest for two years, boosted by the North Mara contract in Tanzania with gold miner Acacia and an uptick in exploration generally.
Second half sales were US$51.7mln a 30% increase while fourth quarter revenues jumped 47% to US$27.8mln as rig utilisation rose to 55%.
Parsons added that looking for new work in new geographic areas had added some costs, but it expects this to feed through into further growth in profitability and free cash flow generation.
Net cash at the end of the year was US$0.6mln.
House broker finncap added the uptick in activity points to an improvement in mining markets.
Revenues exceeded expectations and although the new contracts incurred higher short-term costs the broker has raised its 2017 earnings per share forecast to 2.3c from 0.8c.
The price target rises to 95p. Shares today were 64.6p, up 2%.
--update for broker comment and share price --