Capital Drilling Ltd (LON:CAPD) executive chairman Jamie Boyton described the mine services contractor’s performance in 2018 as strong, especially in the second half.
The company, in a statement, gave investors an update on the fourth quarter ahead of the release of full-year financial results on 14 March.
It reported fourth-quarter revenue at US$30.5mln, down 1% from US$31mln in the preceding three month period, but, up 12.5% compared to the same quarter a year ago.
The unaudited figure for the twelve month period was US$116mln, down 3% from the 2017 total, but, above the company’s top-end guidance range which was set at US$105mln to US$115mln.
READ: Capital Drilling clinches new contracts and key renewals
Capital Drilling highlighted that cash flow generation rose significantly, with year-end cash amounting to US$10.9mln compared to US$3.4mln at the halfway marker (30 June 2018). At the same time, the net debt position improved to US$9mln, from US$12mln at the end of 2017.
Operational activity improved with utilisation rates measuring 59% at the end of the quarter, versus 47% in the comparative quarter of 2017, thanks to increased exploration activity in West Africa and Botswana.
The company highlighted that its long term contracts continue to perform strongly and it has seen a substantial increase in new tender opportunities through the second half of 2018.
"Capital Drilling's trading performance in 2018 was strong, particularly in the second half of the year which saw the group accelerate its penetration into the fast growth West African mineral drilling industry,” Boyton said.
“The quality of our business improved further, with zero LTIs [lost time incidents] recorded, an outstanding result, in addition to some material contract extensions with some of our longstanding blue chip customers.”
“The improvement in utilisation, specifically in exploration contracts, as well as the prudent management of working capital across the group, translated into improved cash generation over prior periods, further strengthening the group's balance sheet.
He added: “The current year has started strongly with solid tendering activity in West Africa, where we are benefitting from the infrastructure investment that we have made over the past 12 to 18 months."