Capital Limited (LSE:CAPD) hoisted its dividend 64% after more than doubling profits last year and guided to a year of further revenue growth in 2022.
The mining services company, which earlier this year revealed turnover had grown 68% to US$226.8mln in the 2021 calendar year, today reported underlying profits (EBITDA) of US$73.3mln, a 116.9% increase on the previous year.
On top of the revenue growth, EBITDA margins increased to 32.3% from 25.0% on the back of what the company said was increased expenditure discipline.
Profit before tax increased 141% to US$82.0mln.
Profits benefited from US$33.7mln of net gains from equity investments, which executive chairman Jamie Boyton said have become a “core pillar” of group strategy, providing equity returns and serving as “a highly effective business development tool for several years”.
Despite a 9.6% increase in spending cash on capital expenditure to US$46.3mln, cash from operations grew 18.3% to US$42.6mln and the balance sheet ended the year with net cash including investments of US$28.3mln.
The board declared a final dividend of 2.4 US cents per share, which brings the total dividend for 2021 to 3.6 cents per share, compared to 2.2 cents a year ago.
Boyton said the mining business took “a sizeable step forward” in 2021 with the ramp up of the load & haul contract at the Sukari mine in Egypt, which was delivered ahead of contact expectations.
“Operations are now fully commissioned and 2022 will be the first complete year with the earth moving contract at full run rate,” he said.
“Following the rise in commodity prices, we are seeing an increase in projects moving forward to development and therefore we expect the pipeline of new mining contracts to expand in the coming years.”
For 2022 new revenue guidance was provided of US$270-280mln, driven by a net increased of 11 in the drill rig count, contract extensions and expansions from existing long-term contracts, a full year of Sukari at full capacity and the MSALABS geochemical laboratory services continuing to grow.
Capital expenditure is expected to be roughly flat at US$45mln to fund an increase to the drill rig count, the expansion of MSALABS, including a new hub laboratory in Saudi Arabia, as well as sustaining capex on the enlarged drill fleet and the Sukari mining contract.