Capital Limited (LON:CAPD) has reported higher revenue in its third-quarter amid an uptick in the utilisation of its fleet of mining rigs.
In an update for the three months to September 30, 2020, the Africa-focused mining services company reported revenues of US$35.3mln, up 20.1% year-on-year, while the company’s fleet utilisation rate increased by 17.3% to 61% as a result of increased exploration drilling activities.
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Capital also highlighted “continued solid operational profitability” which it said was driven by consistent revenue from long-term contracts and prudent cost management, adding that the coronavirus pandemic is continuing to have “no material impact” on its operations.
Looking ahead, the company said equity markets have continued to strengthen with activity levels in the quarter at their highest since 2012, which it said is “a strong indicator of future demand”.
The firm added that the tendering market for drilling had “increased materially”, both in numbers and the size of tenders, and that it is continuing to build its mining fleet to “better position the business to actively engage in the mining services tender market”.
Capital also said opportunities within the mining services business are “progressing well with advanced discussions on a number of opportunities”.
The group has maintained its revenue guidance for 2020 of between US$130mln-US$140mln compared to US$114.8mln in 2019.
"The third quarter saw further progress in our drilling services operations, from production to exploration, with continued excellence in our safety record as well as a strong pick up in rig utilisation. Our West African strategy continued to deliver growth through existing client projects, and we look forward to expanding our reach with the forthcoming expansion into the Guinea-Conakry market. In terms of our broader mining services businesses, Capital made significant progress with the development of our load and haul fleet and capability, while MSALABS, our laboratory business, continued to grow its presence in Africa, leveraging off the well-established Capital network”, executive chairman Jamie Boyton said in a statement.
“Looking ahead into the current quarter, Capital's operations at Sukari, Centamin's Tier 1 gold mine in Egypt continue with no disruptions following the successful safety measures recently implemented in the open pit. Activity levels are beginning to benefit from the gradual easing of travel and other restrictions brought on by the global [coronavirus] pandemic. Capital remains on track to deliver on its guidance for 2020, supported by the positive trends both in the capital markets' appetite for the gold mining sector, the medium-term fundamentals of gold and the increased activity in African mining more generally", the chairman added.