LONDON (Alliance News) - Capital Drilling Ltd Friday said its revenues fell 32% in its first quarter compared to the previous year due to challenging market conditions, but it has seen revenues increase compared to the previous quarter as drilling began at the Geita gold mine in Tanzania.
The emerging and developing markets drilling company said its revenues fell 32% to USD26.1 million for the three months ended March 31 from USD38.3 million a year before, and it noted that market conditions continue to be challenging with lower demand levels reflecting cost cutting and capital discipline in the mining industry.
Capital Drilling said its rig utilisation rates of 44% were down significantly from 66% the previous year and down slightly from 46% in the previous quarter, which it said was consistent with soft demand it experienced in the second half of 2013.
However, the company did note that its revenues were 20% up on its fourth quarter 2013 figures due to the start of production drilling at the Geita gold mine, with five new rigs being bought being added to the fleet at the site.
Capital Drilling said that in the first four months of the year, Geita has seen a steady increase in production output, increasing the company's presence at the site to help with grade control and development drilling.
The company added that it remains focused on strict cost management with ongoing discipline providing a continued conservative gearing profile and strong balance sheet.
Capital Drilling shares were up 0.4% to 31.25 pence Friday afternoon.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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Capital (CAPD)