Capital Ltd (LON:CAPD) reported record quarterly revenue, with growth delivered across all business units, and said it is experiencing the strongest demand environment for drilling services in a decade.
It declared a final dividend of 1.3 US cents for 2020, up from 0.7 US cents in 2019.
The mining services company posted first-quarter revenue of US$44.0mln, up 35% from the year-earlier quarter and 27% higher than in the last quarter of 2020.
Revenue guidance for 2021 remains US$185mln to US$195mln, compared to the US$135mln achieved in 2020, driven by higher drill rig utilisation, new contracts and contract extensions and the start of the load and haul waste mining contract at Centamin PLC’s (LON:CEYL) Sukari gold mine in Egypt.
'The first quarter of 2021 has been the strongest revenue performance in Capital's history, underpinned by significant demand for drilling services in particular, and supported by growth in the company's non-drilling services,” said executive chairman Jamie Boyton.
The company, which started its first drilling operation in 2005, said mine-site services continue to underpin revenue streams, contributing 87% of revenue.
Capital noted that expanded budgets in the exploration drilling market had creating significant tailwinds for the exploration fleet and contributed strongly to overall rig utilisation.
Average monthly revenue per operating rig (ARPOR) increased 5.9% on the year-earlier quarter to US$180,000.
“Looking ahead and having been awarded a number of new contracts with both new and existing customers in West Africa, our rig utilisation is expected to remain strong,” said Boyton.
The West African region contributed 37% to group revenues in the first quarter.
“The execution of the early stages of the Sukari contracts for the waste stripping and additional drilling contracts is progressing well with revenue growth contribution set to accelerate through 2021, reaching full run rate in Q4,” Boyton added.