Last checked at 17 May 2012 07:00
Capital Drilling Limited
("Capital Drilling" or "the Group")
Interim Management Statement
17 May 2012
Capital Drilling Limited (CAPD: LN), the emerging and developing markets drilling company, provides its Interim Management Statement ("IMS") for the period to 17 May 2012.
Highlights
·; Record first quarter revenues of $36.0m, up 31% year-on-year (Q1 2011: $27.4m) for the 3 month period to 31 March 2012.
·; Monthly Average Revenue per Operating Rig ("ARPOR") of $186,000, up 26% year-on-year. (Q1 2011: $148,000) Rig utilisation of 74%, down 5% points year-on-year (Q1 2011: 79%) due to higher rig mobilisation in the quarter, on a weighted average fleet of 85 rigs (Q1 2011: 75)
·; Added a further 3 rigs in April, increasing the fleet size to 88 rigs at 30 April 2012.
·; A number of new contracts were won including:
o Centamin - 2 underground (diamond) rigs for the Sukari project in Egypt.
o CMP - 4 diamond rigs for the Pleito Este project in Chile.
o Antofagasta - 4 diamond rigs for the Brujulina project in Chile.
·; The outlook remains positive, with continuing elevated levels of demand. Revenue for the Group continues to be in line with market expectations for the full year.
·; Achievement of a number of safety records including:
o Egypt reached 1,000 days LTI free in January
o Zambia (Lumwana) reached 1,500 days LTI free in January
o Tanzania (North Mara) reached 1,000 days LTI free in January
o Tanzania (Mwanza Workshop) reached 1,500 days LTI free in March
o Egypt (Thani Dubai Shalaten Project) achieved 500 days LTI free in May
Trading Update and Outlook
The Company is pleased to report another strong quarterly revenue performance, with sales of $36.0m in Q1 2012, a 31% increase on Q1 2011. This was a record Q1 performance for the Company and was achieved despite softer utilisation rates, as rigs were mobilised from Mozambique to Zambia & Tanzania, following which the Company expects utilisation to pick up again into Q2. The Group saw a significant increase in ARPOR, up 26% from Q1 2011 to $186,000 per month on a weighted average fleet of 85 rigs (Q1 2011: $148,000 on 75 rigs).
We are encouraged by new contract wins this year and maintain our growth strategy of focussing on the demands of our blue chip customer base and continuing to increase our exposure to high quality customers with long term projects. Q1 has seen us awarded our first underground drilling contract at the Sukari mine in Egypt with Centamin, in addition to further expansion into Latin America, which remains one of the fastest growth opportunities for our services. The increase in total rigs to 88 during the period is consistent with our expansion plans and demonstrates anticipation of further growth from new contracts as well as extension of existing ones.
Despite global uncertainty, the demand environment for quality drilling services has continued to be strong in 2012 with only a slight moderation being experienced in the first quarter. A number of the Group's major clients are seeking to expand their activities over the course of the current financial year and pricing for key commodities remains well above the economic thresholds for sustained levels of exploration and mining activity. As expected, we continue to operate in a tight labour market with the associated cost pressures however, the Company remains on track to deliver on its stated growth strategy.
Commenting on the IMS, Geoff Fardell, Chief Executive Officer, said:
"The current financial year has started well, with solid revenue growth despite the current uncertainty in global capital markets. We remain confident in our ability to meet full year market expectations thanks to our increasing exposure to well capitalised mining majors with solid, long life assets and our sustained expansion into targeted markets. Our business mix has continued to improve with additional contracts with Centamin and in South America, requiring the mobilisation of a number of rigs during the quarter.
The second quarter has started well, and we anticipate that earnings in 2012 will be weighted as usual to the second half. We continue to invest in the future development of the Group and have increased the total rig count to 88 over the period."
For further information please access Capital Drilling's website www.capdrill.com or contact:
Capital Drilling | ||
Jamie Boyton, Executive Chairman | +65 6227 9050 | |
Geoff Fardell, CEO | ||
Liberum Capital Limited Clayton Bush Richard Bootle
Canaccord Genuity Limited | +44 (0)20 3100 2000 | |
Robert Finlay Andrew Chubb | +44 (0)20 7523 8000 | |
Buchanan | ||
Bobby Morse | +44 (0)20 7466 5000 | |
Cornelia Browne Gabriella Clinkard |
About Capital Drilling
Capital Drilling provides specialised drilling services to mineral exploration and mining companies in emerging and developing markets, for exploration, development and production stage projects. The Company currently owns and operates a fleet of 88 drilling rigs with established operations in Chile, Egypt, Ethiopia, Ghana, Mauritania, Mozambique, Tanzania, Solomon Islands and Zambia. The Group's corporate headquarters is in Singapore and it has its administrative offices for South America in Santiago.