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(Alliance News) - Mining services company Capital Drilling Ltd said Tuesday its revenue dropped in the third quarter of 2019, due to a slight fall in utilisation and a reduction in drilling activities.
For the quarter to the end of September, revenue declined by 5.2% to USD29.4 million from USD31.0 million the year before, but rose by 6.1% from USD27.7 million the prior quarter.
Average monthly revenue per operating rig declined by 12% to USD174,000 from USD198,000 the prior year.
The utilisation of Capital Drilling's fleet of rigs was 52% in the quarter, down from 53% the prior year, reflecting reduced drilling activities at Acacia Mining's North Mara gold mine in Tanzania, due to the suspension of the tailings facility by the Tanzanian government.
This situation has now been resolved, and activity at North Mara has increased in the fourth quarter.
Looking ahead, Capital Drilling said it is on track to achieve its 2019 revenue guidance of USD110 million to USD120 million, as increasing activity is expected to see revenue increase further in the fourth quarter.
For 2018, Capital Drilling reported revenue of USD119.4 million.
"In the first nine months of 2019 Capital Drilling has positioned itself for further growth, which is now bearing fruit with strong exploration contracting and mobilisation activity and, as recently announced, broadening our service offering with the award of our first comprehensive mining services contract with Allied Gold Corp at their Bonikro gold project," said Executive Chair Jamie Boyton.
"Our West African growth strategy continues to pay dividends, with a record number of contracts commencing in the fourth quarter. During the quarter, we have invested to support the new contracts, and we are confident that Capital Drilling is building a stronger, broader revenue base as a result," Boyton added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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