# Capital Ltd FY21 revenue of $226.8 million, up 68% on FY 2020

- Link: https://www.directorstalkinterviews.com/capital-ltd-fy21-revenue-of-226.8-million-up-68-on-fy-2020/4121056314
- Published: 2022-03-10T07:50:46+00:00
- Author: Amilia Stone

**Capital Ltd** ([LON:CAPD](https://www.directorstalkinterviews.com/company/capital-drilling-ltd/capd.l))
has announced its full year results for the year ended 31 December 2021.

|   | 2021 | 2020 | % change | 
| Revenue ($ m) | 226.8 | 135.0 | 68.0% | 
| EBITDA^(1) ($ m) | 73.3 | 33.8 | 116.9% | 
| EBIT^(1) ($ m) | 51.9 | 21.6 | 140.3% | 
| Adjusted net profit ($ m) | 36.6 | 11.2 | 226.6% | 
| Investment Gains  ($ m) | 33.7 | 13.6 | 147.9% | 
| Net Profit After Tax ($ m) | 70.3 | 24.8 | 183.5% | 
| Cash From Operations ($ m) | 42.6 | 36.0 | 18.3% | 
| Capex ($ m) | 46.3 | 42.2 | 9.6% | 
|   |   |   |   | 
| Earnings per Share |   |   |   | 
| Basic (adjusted) (cents) | 19.2 | 7.9 | 141.7% | 
| Basic (cents) | 37.0 | 17.8 | 108.2% | 
|   |   |   |   | 
| Final / Interim Dividend per Share (cents) | 2.4 | 1.3 | 84.6% | 
| Total dividend per Share (cents) | 3.6 | 2.2 | 63.6% | 
|   |   |   |   | 
| Adjusted ROCE (%) ^(3) | 22.7 | 22.2 | 2.4% | 
|   |   |   |   | 
| Net cash / (debt) ($m) | (31.9) | 5.0 |   | 
| Investments ($m) | 60.2 | 27.2 | 121.4% | 
| Adjusted Net Cash (Including Investments) ($ m) | 28.3 | 32.2 | (12.2)% | 
| Net Cash/Equity (%) | 12.9 | 21.9 | (41.2)% |

_*All amounts are in US dollars unless otherwise stated_

(1)      EBITDA, EBIT, Net Asset Value per share and Net Cash are non-IFRS financial
measures and should not be used in isolation or as a substitute for Capital Limited
financial results presented in accordance with IFRS.
(2)      ROCE calculated utilising
12 months EBIT.(3)      Adjusted ROCE excludes Mining Assets and Prepayments, Net
Equity Raise proceeds and Sukari prepayment from Capital Employed.

**Financial Overview**

·      FY2021 revenue of $226.8 million, up 68% on FY 2020 ($135.0 million);

·      2021 EBITDA of $73.3 million, up 116.9% on FY 2020 ($33.8 million);

·      EBITDA margins increased to 32.3% up from 25.0% in FY 2020;

·      Net gains from equity investments of $33.7 million in 2021 (realised + unrealised),
increasing the value of Group strategic investments to $60.2 million, net of cash
proceeds, as of 31 December 2021 (31 December 2020: $27.2 million);

·      Net Profit After Tax (NPAT) $70.3 million (including investment gains), an
increase of 183.5% on FY 2020 ($24.8 million); and adjusted net profit after tax
of $36.6 million, up 226.6% on FY 2020 ($11.2 million);

·      Cash capex of $46.3 million, up 9.6% on FY2020 ($42.2 million);

·      Cash from operations of $42.6 million, an increase of 18.3% on FY 2020 ($
36.0 million);

·      Net cash including investments of $28.3 million, down from net cash including
investments of $32.2 million at year end 2020;

·      Basic earnings per share (including investment gains) of 37.0 cents, up 108.2%
on FY 2020 (17.8 cents); and adjusted earnings per share of 19.2 cents, up 141.7%
on FY 2020 (7.9 cents)

·      Declared a final dividend of US$2.4 cents per share, to be paid on 10 May
2022 which, together with the interim dividend of US$1.2 cents per share brings 
total dividends declared for 2021 of US$3.6 cents per share (up 64% on 2020 total
dividend of US$2.2 cents per share). 

Operational and Strategic Highlights

·      Rig fleet utilisation increased to 79% in Q4 2021, up 4% on Q4 2020 (76%)
and 34% on Q3 2021 (59%); FY 2021 average utilisation was 75%, an increase of 27%
on FY 2020 (59%);

·      Non-drilling revenue contributed 22% of total revenue for 2021, compared 
with 2020 (9%^([[1]](https://www.londonstockexchange.com/#_ftn1))), primarily driven
by the increased contribution from mining services and MSALABS, which saw significant
growth through 2021;

·      Average monthly revenue per operating rig (“ARPOR”) for Q4 2021 at US$184,000,
up 7% (Q4 2020: US$172,000) and up 6% on Q3 2021 (US$182,000); FY 2021 ARPOR was
$181,000 up 5.8% on FY 2020 $171,000 as core long-term contracts continue to perform
strongly;

·      Safety performance remains world class with the Group remaining LTI free 
across eleven sites through 2021, six of which have remained LTI free in excess 
of three years;

·      Recent contract wins (previously announced):

 * A three-year surface production drilling contract with AngloGold Ashanti at the
   Geita Gold Mine, Tanzania. This contract will utilise five rigs from the existing
   fleet together with one new rig during 2022, and is anticipated to generate revenues
   of $33 million over the contract term;

 * An exploration contract with Firefinch at the Goulamina Lithium mine, Mali, a
   JV project between Firefinch and the world’s largest lithium producer Ganfeng;
   ~ ~

 * An exploration contract with Tembo Mining at the Kabanga Nickel mine, Tanzania.
   This year has seen an investment from BHP intended to accelerate the development
   at the project;

 * Expanded grade control services to include underground at North Mara, Tanzania;

 * A one-year contract extension for underground grade control drilling with Resolute
   at the Syama Gold Mine, Mali.

·      New contract wins:

 * A three-year underground drilling contract with Barrick at the Jabal Sayid copper
   mine, Saudi Arabia; 

 * An extension with [Cora Gold](https://www.directorstalkinterviews.com/company/cora-gold-ltd/cora.l)
   at the Sanankoro Gold Project for drilling exploration;

 * An exploration contract with Aton Mining, Egypt.

·      Sukari Gold Mine (Egypt) waste mining and expanded drilling contracts performed
ahead of contract targets in 2021:

 * Operations achieved mining quantities above contract in 2021, with all production
   phases brought on-line ahead of schedule;

 * The commissioning phase of this contract involved over 400 new employees with
   associated new equipment, and concluded its first year of operation injury free.

·      MSALABS has had a very successful 2021:

 * The rollout of the Chrysos’™ PhotonAssay units is progressing well:

·      The unit at the Bulyanhulu (Tanzania) laboratory has been commissioned and
commenced operations in October;

·      Two further units are due to be commissioned in Val d’Or (Canada) and the
Morila Gold Mine in Mali (80% owned by Firefinch ASX:FFX) in Q1 2022 and Q2 2022
respectively.

·      Accordingly, the Group’s portfolio of long-term mine-site based operations
increased to ten sites, comprising 18 individual contracts with the addition of 
the new contracts with Barrick in Tanzania and Firefinch in Mali;

**Outlook**

·      Revenue guidance for 2022 of $270 to $280 million driven by an increased 
drill rig count, contract extensions and expansions from existing long-term contracts,
load and haul waste stripping contract at Sukari, Egypt running for the whole year
at full capacity and MSALABS continuing to grow through 2022;

·      Capital expenditure is expected to be approximately $45 million in 2022. 
This will fund an increase to the drill rig count, the expansion of MSALABS, including
a major hub laboratory in Saudi Arabia, as well as sustaining capex on the enlarged
drill fleet and the Sukari mining contract;

·      Drill rig fleet size forecast to increase by 11 rigs by the end of 2022, 
net of depletion;

·      The Sukari earth moving contract continues to perform well, with the project
now safely commissioned and we expect the operation to contribute at full capacity
through 2022;

·      Laboratories is seeing strong demand for its services and the rollout of 
the Chrysos units, with the business expected to deliver revenues of approximately
$30 million in 2022, almost double revenue in 2021 (FY 2020 $15.6 million);

·      Business mix underpinned by long-term mine-site contracts with blue-chip 
customers, growing exposure to metals beyond gold, and non-drilling revenues expected
to proportionally increase further in 2022;

·      Tendering activity across all business units remains robust, with a number
of opportunities progressing.

> **Commenting on the results, Jamie Boyton, Executive Chairman of Capital Limited,
> said:**
> ‘2021 has been another outstanding year for Capital and marks the business’s second
> consecutive year of material growth. While this has been supported by a rapid 
> increase in demand over the past 12 months, we have also taken a notable shift
> forward in our service offering, increasing our non-drilling revenues to 22% of
> the Group from just 9% the prior year, while also growing our drilling business.
> In order to drive the growth in the business, we increased our headcount by 1,000
> new people through the year, and despite this significant new onboarding and increased
> activity across the group, we maintained our industry leading safety performance,
> with a TRIFR result of 0.98 (2020: 0.77).
> We entered 2021 flagging the disconnect between decade-high commodity prices, 
> with exploration spending at half the levels of a decade ago. We saw this begin
> to correct through early 2021 with a rapid pickup in market activity evident in
> our operational metrics. On top of an increased rig count, rig utilisation increased
> to 75% in 2021 compared to 59% in 2020, while ARPOR also increased by 5.8% to 
> $181,000 from 2020. We are continuing to invest in our drill rig fleet to meet
> the continued strength in demand we are seeing and ensuring we have a favourable
> balance of rig type in the regions where we are operating. Our focus will nevertheless
> remain on growing long term contracts and partnerships with blue-chip customers
> to reduce the volatility and ensure the [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
> of the business through the cycles.
> Our mining business has taken a sizeable step forward in 2021 with the exceptional
> ramp up of the Load & Haul contract at Sukari, which we 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. 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.
> MSALABS also performed well through 2021, setting the foundations for further 
> growth in the coming years. 2022 will be an exciting year for MSALABS as it continues
> the rollout of the revolutionary Chrysos PhotonAssay technology, as well as developing
> a major hub laboratory in Saudi Arabia. PhotonAssay, which provides gold assay
> results in minutes rather than weeks or months, has the potential to disrupt the
> geochemical analysis sector. This technology is a key driver of growth in MSALABS,
> with revenues expected to approximately double in 2022 YoY.
> Another key contributor to our strong result for the year has been returns from
> our equity investments, which have become a core pillar of our Group strategy.
> Capital Investments not only contributes through equity returns, which amounted
> to $33.7 million in 2021, but has also served as a highly effective business development
> tool for several years, with $41 million or 18% of group revenue coming from investee
> companies in 2021. This creates a strong partnership approach to our contracting
> model and remains core to the investment strategy.
> In view of the significant progress made in 2021, Capital today is a stronger 
> and more robust business. We will continue to pursue our key strategic priorities
> during 2022 and have confidence in maintaining a growth trajectory in the business,
> with revenues expected to reach $270-280 million in 2022.’

**Results Conference Call**

Capital Ltd will host a Webcast on Thursday 10 March 2022 at 09.00 am (London, UK
time) to update investors and analysts on its results. Participants may join the
webcast via the like below. Shareholders may also join the webcast by dialling one
of the following numbers, approximately 10 minutes before the start of the call.
Participants may also wish to download the 2021 Results Presentation, which is available
by clicking [http://www.capdrill.com/investors/presentations](http://www.capdrill.com/investors/presentations)

**Webcast Link**

[https://webcasting.buchanan.uk.com/broadcast/6221ec7cd196af24e1e91a0c](https://webcasting.buchanan.uk.com/broadcast/6221ec7cd196af24e1e91a0c)

**Dial-In Details**

United Kingdom Toll-Free: 08003589473

United Kingdom Toll: +44 3333000804

PIN: 35312080#

International dial-in numbers – [Link](https://urldefense.proofpoint.com/v2/url?u=https-3A__events-2Dftp.arkadin.com_ev_docs_NE-5FW2-5FTF-5FEvents-5FInternational-5FAccess-5FList.pdf&d=DwMGaQ&c=24Pv9SDmf15C3K1GQEblf0-dR4hG0m_5jejOBrkAV6M&r=QYkWmyFK8Y3e5jgEzqfg7BS4FTqS479bXiF2HYjlTIk&m=ieAtP9kTeBzfQmfbL2SLaqwFb5awB94m5UCaATVhTIJj0orOFv4i-8OBxpmh01Er&s=t71yT1mI7NRQzK3hfBkNUcZIYz52cleNDfaxzcuc5uc&e=)

**CHAIRMAN’S STATEMENT**

2021 has been a transformational year with Capital delivering three record quarters
of revenue growth and the strongest year in our history. We have seen growth in 
all our business areas, but most notably a sizeable shift forward in our service
offering with the addition of large scale load and haul services at Sukari and the
beginning of the rollout of the revolutionary Chrysos PhotonAssay units in our laboratory
business, MSALABS. The operational execution of this growth has been outstanding,
with an exceptional safety performance, maximising the value delivered to shareholders.

We delivered 68% revenue growth, 117% EBITDA growth and 140% EBIT growth. This is
the second consecutive year we have delivered material growth, following 18% YoY
growth in revenue in 2020. Amongst this growth however, our core focus on long life,
mine site contracts (88% of revenue in 2021) with blue-chip customers has remained
unchanged to ensure a business that is sustainable through the cycles.

Our strategy to develop a broader range of services continued successfully during
2021. The contribution from our non-drilling services increased significantly during
the year to 22% of Group revenues, compared to 9% in 2020, driven primarily by the
ramp up of the load and haul operation at Sukari and the continued expansion of 
MSALABS.

In 2020, we announced an equity raise to help fund equipment for a waste mining 
contract with Centamin at the Sukari Gold mine, which represented the largest award
of business in the Group’s history. The ramp up of this operation in 2021 was ahead
of contracted expectations and has reached full run rate going into 2022, while 
remaining injury free. This contract is anticipated to deliver incremental revenues
of US$235 – $260 million over a four-year period.

Our laboratory business, MSALABS, continued to perform well and is positioning itself
for material growth as it rolls out the revolutionary Chrysos PhotonAssay units.
The first of these units was successfully commissioned in 2021 and in 2022 MSALABS
will continue to roll out further units, a key driver of its growth. PhotonAssay
technology has the potential to disrupt the geochemical analysis sector and we are
encouraged by the demand we are seeing.

In addition to the expansion in our service offering, our core drilling business
has also gone from strength to strength. As we entered 2021 there was a clear disconnect
between the rapid increase in commodity pricing seen in 2020, compared to capital
raisings and exploration budgets, which remained at close to half the level seen
when commodity prices were last at these levels. This changed early in the year 
and we saw a rapid and significant increase in demand which was visible in our utilisation
rates in the subsequent three quarters of the year. Elevated commodity prices have
continued into 2022, as has the strong demand we are seeing for our services.

Our Direct Investments portfolio has also cemented itself as the fourth key pillar
of our strategy. We undertook a significant and well-timed investment strategy in
2019 as we expanded our operations in West Africa. We have engaged in direct investments
into exploration and mining companies, and drill for equity, aligning the activity
with service contracts. The year-end portfolio was valued at $60.2 million, up 121%
compared to the year end 2020 position of $27.2 million, with investment gains (
predominantly unrealised) for the year of $33.7 million. This translated into significant
net profit growth in 2021 of 184%.

In addition to the investment gains, these positions have cemented key relationships
and partnerships with the investees, with contracts from these companies generating
$41 million of revenue over 2021 (18% of Group revenue).

At the beginning of 2022 we also launched a buyback programme of up to two million
shares. While our focus remains primarily on growth, the buyback demonstrates both
the huge success we achieved in 2021 and also the confidence we have in the business
going forward.

The Board of Directors has declared a final dividend for the 2021 period of 2.4cps(
$4.5 million), payable on 10 May 2022 to shareholders on the register as of 7 April
2022. This brings the total dividend declared in 2021 to 3.6c per share. The dividend
is a result of our solid financial and operating position.

**OPERATIONAL & SAFETY UPDATE**

I am extraordinarily proud of our Company’s achievements during 2021. Amongst the
significant levels of growth and increased activity, the Group has also increased
its headcount by 1,000 people, a 78% increase YoY. Nevertheless we maintained the
consistency in our operations throughout the year and our industry leading safety
record and I would like to take this opportunity to thank all our employees for 
their dedication.

The Group’s rig count increased from 94 at the end of 2020 to 109 at the end of 
2021, with a further three rigs undergoing commissioning. The new rigs supported
both existing long-term contracts and new contract wins. We remain very active with
our fleet management in order to maintain our position as the provider of best-in-
class equipment in the regions where we operate. In addition to the increased fleet
size, our rig fleet utilisation increased to 75% in 2021 vs 59% in 2020, while full
year ARPOR also increased 5.8% in 2021 to $181,000 (2020: $171,000). This stellar
performance is a result of both improving commodity prices and macro conditions 
together with our successful geographical expansion into West Africa. This expansion
has delivered regional revenue exposure beyond our traditional operations in Egypt
and Tanzania, and with it new long-term mine site contracts.

Our portfolio of ten long-term mine site contracts continued to perform well through
2021 with a number seeing increased rig counts on site for further support and new
services. In addition, we signed multiple new contracts while also expanding our
commodity exposure.

By the nature of both the contracting market and also critically the geographic 
regions where we operate, gold mining remains our main exposure. However, at the
beginning of 2022, Capital announced an exploration contract with Firefinch at the
Goulamina Lithium Mine, Mali, a JV project between Firefinch and the world’s largest
lithium producer Ganfeng, as well as an exploration contract with Tembo Mining at
the Kabanga Nickel Mine, Tanzania. Both projects have the potential to be very large,
long-life assets and the latter project has seen an investment from BHP intended
to accelerate development.

For the ramp up of the Sukari mining project we hired over 400 new employees and
purchased 4 excavators, 17 mining trucks and other associated vehicles. Nevertheless
we delivered ahead of our contract terms with the ramp up also completed with its
first year of operation injury free. This outstanding performance in our first major
earth moving contract both reinforces our relationship with Centamin at Sukari, 
where we have provided drilling services since 2005, and also positions us well 
for future tender awards.

MSALABS is quickly becoming a key growth area for the Group. 2021 saw the start 
of the company’s rollout of Chrysos PhotonAssay units, with the first unit now commissioned
at Barrick’s Bulyanhulu Gold Mine in Tanzania. This contract marked both the largest
contract since MSALABS’ establishment, and the first PhotonAssay unit deployed outside
Australia. Two more units were deployed in Q1 2022, the first in Val d’Or in Quebec,
Canada, and the second at the Morila Gold Mine, Mali. MSALABS will also establish
a third major hub laboratory in Saudi Arabia later this year, which will assist 
in setting the foundations for further growth in 2023 and beyond.

Once again, our focus and commitment to the safety of our employees delivered results
significantly better than industry standards, and I congratulate everyone for their
effort. We expect visible safety leadership at all levels of the business, from 
the Executive Leadership Team to crews on site, and we actively invest in training
programs to ensure our workforce is skilled, competent and can identify and mitigate
hazards in the workplace. Our Total Recordable Injury Frequency Rate (TRIFR) was
0.98 per 1,000,000 hours worked. We also achieved a number of site records and safety
milestones during 2021 including:

·              13 years LTIF at Mwanza, Tanzania

·              5 years LTIF at the Syama Gold Mine, Mali

·              5 years LTIF at the North Mara Gold Mine, Tanzania

·              4 years LTIF at the Geita Gold Mine, Tanzania

·              3 years LTIF at Bamako, Mali

·              3 years LTIF at Hummingbird, Mali

·              2 years LTIF at the Jabal Sayid Copper Mine, Saudi Arabia

·              1 year LTIF at the Bulyanhulu Gold Mine, Tanzania

·              1 year LTIF at the Bonikro Mine, Cote d’Ivoire

·              1 year LTIF at the Sukari Gold Mine, Egypt

·              1 year LTIF at the Bankan gold project, Guinea

**OUTLOOK**

As we look to the year ahead, trading conditions continue to point to very strong
demand. Commodity prices, including our main exposure gold, remain at very high 
levels which provide strong profitability and cash flows for the producers and is
a positive indicator for continued momentum throughout 2022.

Equity markets also remain highly supportive for the mining industry, with financings
through 2021 at decade highs according to S&P Global Market Intelligence. Together
this suggests a further improvement in exploration budgets and demand for our services
across all of our business units.

Our focus on long-term mine site contracts continues to underpin our business through
2022. At the end of 2020, we saw an extension and expansion of the drilling contract
at Sukari (in line with the mining contract award) and in 2021 we saw major contract
renewals at Geita. These contract renewals provide clear revenue visibility and 
a strong foundation for the year ahead.

At Sukari, operations are now fully commissioned, and 2022 will be the first complete
year with the earth moving contract at full run rate. MSALABS is also at an exciting
inflection point, with one Chrysos PhotonAssay unit successfully commissioned in
Q4 2021 and 2022 set to see material growth driven by the rollout of further units,
as well as the construction of the Group’s third major hub lab in Saudi Arabia.

As we enter 2022, our core drilling business has the highest rig count in the group’s
history and we are confident in maintaining strong utilisation levels given the 
increased activity we are seeing from our existing clients, as well as the strength
we continue to see in commodity pricing. We are also continuing to invest in our
fleet and this will drive a further increase to our fleet size (net of decommissioning
old rigs).

We will continue to execute our key strategic priorities in 2022, focussing on growing
our full-service mining business, growing revenues from our ancillary services businesses,
particularly MSALABS, expanding capacity with our existing clients and maintaining
high levels of utilisation through our fleet.

I would like to take this opportunity to thank all our employees, business partners,
shareholders, our Board of Directors and other stakeholders for their continued 
support of our Company.

Jamie Boyton

Executive Chairman

9 March 2022

**CHIEF FINANCIAL OFFICER’S REVIEW**

**OVERVIEW**

Capital Ltd has delivered a stellar performance in 2021 with all our business areas
achieving growth through the year. We have made transformational steps through 2021,
including expanding our service offering in order to continue to grow the business
even further in 2022 and beyond.

Revenue increased by 68% to $226.8 million (2020: $135.0 million). H2 revenue ($
128.1 million) was 30% higher than H1 revenue ($98.7 million) primarily due to the
weighting of the ramp up of the Sukari waste mining contract, but also new drilling
contract wins through the year, an associated increase in rig count and improved
revenues at MSALABS.

Profitability also improved, with margin improvements across all key metrics on 
the back of increased expenditure discipline. YoY EBITDA and EBIT increased by 117%
and 140% respectively.

Primarily as a result of our expanded service offering into waste mining and the
associated equipment purchases, our capex remained elevated relative to 2020 with
cash capital expenditure of $46.3 million (2020: $42.2 million). In addition to 
the Sukari load & haul contract, growth capex funded the expansion of the rig fleet
in 2021 and also deposits for rigs due to arrive and commission in 2022.

Through 2021 we have increased our debt profile through additional financing to 
fund equipment purchases in combination with operating cash flow. We obtained this
financing from Macquarie Bank ($27.7 million) and OEM financing from Sandvik and
Epiroc.

Cash generated from operations was $42.6 million (2020: $36.0 million). Closing 
cash was $30.6 million (2020: $35.7 million), aided by an additional $27.7 million
in new financing in the year, with net debt of $31.9 million (2020: $5.0 million
net cash). Weighing on cash flows was the increased capex outflow associated in 
particular with the Sukari mining ramp up. Nevertheless our balance sheet remains
in a very strong position with the group finishing 2021 with net cash including 
investments of $28.3 million.

Our portfolio of long-term mine-site based contracts continues to underpin our cash
flow and growth strategy. Mine-site based contracts represent 88% (2020: 93%) of
our Company revenue and growth of this portfolio remains a focus.

Our investment portfolio generated a $33.7 million gain on investments reflected
in the Profit and Loss. This outstanding performance reflects a significant value
increase in a number of investments within the portfolio. The result is a consequence
of the successful 2019 investment strategy. Investment activity decreased in 2020
and 2021 as the cycle improved and capital markets became significantly more accommodating
to equity issuance. The Company’s strategy has therefore matured and rationalised
to a portfolio of strategic core holdings, while continuing to evaluate new opportunities.

Our focus on long-term mine site contracts both reduces the volatility of earnings
and ensures the sustainability of the business through the cycles. This stable business
platform was demonstrated through 2020 and early 2021 through the COVID-19 pandemic
where our portfolio of mine-site based contracts continued uninterrupted. However,
given the sometimes unpredictable nature of the countries where we operate, we have
evaluated a downside model taking the aggregate effect of the reasonable downside
short term risks and demonstrated that the business is robust to scenarios far worse
than experienced or expected. Refer to Note 1.1 of the Annual Financial Statements
for further detail.

**Statement of Comprehensive Income**

| Reported | 2021 | 2020 | 
| $’m | $’m | 
| Revenue | 226.8 | 135.0 | 
| EBITDA | 73.3 | 33.8 | 
| EBITDA (%) | 32.3 | 25.1 | 
| EBIT | 51.9 | 21.6 | 
| PBT | 82.0 | 34.1 | 
| NPAT | 70.3 | 24.8 | 
| Basic EPS (cent) | 37.0 | 17.8 | 
| Diluted EPS (cent) | 36.4 | 17.6 |

_Table 1: Statement of Comprehensive Income (Summary)_

Average rig utilisation increased 16% to 75% (2020: 59%) on a larger average fleet
size of 104 (2020: 98). Average revenue per operating rig (ARPOR) per month also
saw an increase in 2021 to $181,000 (2020: $171,000) attributed to the increased
mobilisation of exploration rigs and some renegotiation of existing contracts.

Non-drilling revenues saw a notable increase in contribution to Group revenues in
2021, driven by the ramp up of the Sukari mining contract as well as the continued
ramp up of MSALABS. 2021 contribution to revenue from non-drilling services was 
22% in 2021 (2020: 9%) and is expected to increase further in 2022.

EBITDA increased 117% to $73.3 million delivering a 32.3% margin (2020: $33.8 million/
25.0%).

EBIT increased 140% to $51.9 million delivering a 22.9% margin (2020: $21.6 million/
16.0%).

Profit Before Tax (PBT) increased by 141% to $82.0 million (2020: $34.1million) 
impacted by Net Interest of $3.6 million (2020: $1.1 million) and benefitting from
an investment gain of $33.7 million (2020: $13.6 million gain). These investments
were aligned to activity with service contracts and provided greater revenue and
earnings. Depreciation of $21.4 million (2020: $12.2 million), flat as a percentage
of revenue at 9%.

NPAT increased 184% to $70.3 million (2020: $24.8 million). The improved NPAT benefitted
from net gains on unrealised equity investments of $33.7 million (2020: $13.6 million
gain).

The Effective Tax Rate for 2021 was 14.3% (2020: 27.4%). The decrease YoY reflects
adjustments in 2020 that did not recur in 2021. In 2020 tax included a $2.8m adjustment
in respect of prior periods’ assessments which were finalised in 2020. The tax recognised
in respect of prior periods in 2021 was $0.2 million. As the Group operates in multiple
jurisdictions, there is an inherent uncertainty in the interpretation of income 
tax laws. As at 31 December 2021, the Group had uncertain income tax positions with
an assessment valued at $2.0 million (2020: $2.7 million). The Group has recognised
a provision of $0.2 million (2020: $0.9 million) as management’s best estimate of
the likely exposure.

As at 31 December 2021, the Group had uncertain income tax positions with an assessment
valued at $2.0 million (2020: $2.7 million). The Group has recognised a provision
of $0.2 million (2020: $0.9 million) as management’s best estimate of the likely
exposure.

The Basic Earnings Per Share (EPS) for the year increased 108% to 37.0 cents (2020:
17.8 cents). The weighted average number of ordinary shares used in the earnings
per share calculation was 189,765,149 (2020: 138,367,746).

The substantial growth in Earnings per Share was driven by the strong operating 
performance and investment gains.

**Statement of Financial Position**

| Reported | 2021$’m | 2020$’m | 
| Non-current assets | 162.4 | 91.1 | 
| Current assets | 189.1 | 135.2 | 
| Total assets | 351.5 | 226.3 | 
|   |   |   | 
| Non-current liabilities | 53.0 | 26.5 | 
| Current liabilities | 75.6 | 51.8 | 
| Total liabilities | 128.6 | 78.3 | 
| Shareholders’ equity ^((1)) | 219.2 | 146.7 |

_Table 2: Statement of Financial Position (Summary)_

_^((1))__ Excludes non-controlling interest of $3.8 million_

As at 31 December 2021, shareholders’ equity increased by 49.4% driven primarily
by strong net profit of $70.3 million. The Group distributed dividends of $4.7 million(
2020: $2.2 million) to shareholders.

The total rig fleet size at the end of 2021 was 109 drill rigs with 3 further rigs
undergoing commissioning (2019: 94).

Overall PPE increased from $89.0 million in 2020 to $143.6 million in 2021, reflecting
depreciation of $21.4 million (2020: $12.2 million), assets disposed of $0.5 million(
2020: $0.8 million) and additional operating capital expenditure of $75.7 million(
2020: $48.7 million).

Current assets increased to $189.1 million (2020: $135.2million). Inventory increased
by $13.2 million to $37.9 million (2020: $24.7 million) due to increased inventory
levels primarily in Egypt. Prepaid expenses decreased by $10.7 million to $17.7 
million (2020 $28.4 million). Cash and cash equivalents decreased by $5.1 million
to $30.6 million (2020:$35.7 million). Investments held of $60.2 million (2020: 
$27.2 million) are the fair value of trade investments.

Non-current liabilities of $53.0 million (2020: $26.5 million) includes $45.6million(
2020: $26.1 million) of long term loans. Total long term debt includes $15 million
of the renewed Revolving Credit Facility, a $37.7 million asset backed facility 
with Macquarie and OEM financing direct through Epiroc & Sandvik .

Current liabilities consisted of trade and other payables, $46.5 million (2020: 
$39.7million), current portion of long-term liabilities $16.9 million (2020: $4.6
million) and tax liabilities of $10.0 million (2020: $7.2 million). Trade and other
payables includes increased trade payables of $22.1 million (2020: $19.9 million)
due to increased activity levels and investment in the Sukari contract.

**Statement of changes in equity**

| Reported | 2021$’m | 2020$’m | 
| Opening equity | 148.1 | 87.0 | 
| Net proceeds from Equity raise | – | 37.2 | 
| Share based payments | 2.0 | 1.4 | 
| Total comprehensive income | 70.3 | 24.7 | 
| Dividends paid | (4.8) | (2.2) | 
| Gain on change in ownership | 5.6 | – | 
| NCI ex Business Combination | 1.7 | – | 
| Closing equity | 222.9 | 148.1 |

_Table 3: Statement of changes in equity (Summary)_

**Statement of Cash Flows**

| Reported | 2021$’m | 2020$’m | 
| Net cash from operating activities | 30.4 | 28.3 | 
| Net cash used in investing activities | (50.1) | (60.7) | 
| Net cash generated from/(used in) financing activities | 15.5 | 50.1 | 
| Net (decrease)/increase in cash and cash equivalents | (4.2) | 17.7 | 
| Opening cash and cash equivalents | 35.7 | 17.6 | 
| Translation of foreign currency cash | (0.9) | 0.4 | 
| Closing cash and cash equivalents | 30.6 | 35.7 |

_Table 4: Statement of Cash Flows (Summary)_

**Reconciliation of net cash (debt) position**

| Reported | 2021$’m | 2020$’m | 
| Net cash at the beginning of the year | 5.0 | 4.4 | 
| Net (decrease)/increase in cash and cash equivalents | (4.2) | 17.7 | 
|  (increase) in long term liabilities | (31.8) | (17.5) | 
| Translation of foreign currency cash | (0.9) | 0.4 | 
| Net cash at the end of the year | (31.9) | 5.0 |

_Table 5: Reconciliation of net cash (debt) position_

Cash generated from operations was $42.6 million (2020: $36.0 million), an increase
of 18.3% year-on-year.

The investing cash flow have decreased year-on-year with some investments, including
prepayments, for the new Sukari contract occurring in 2020. We continued to invest
through 2021, however, both to complete the ramp up for the Sukari mining contract
as well as increase our drill rig count to meet existing client requirements and
maintain fleet operational readiness.

Financing activities included the dividend cash payment of $4.8 million (2019: $
2.2 million).

The dividend history for the past three years is as follows:

|   | H1 2019 | FY 2019 | H1 2020 | FY 2020 | H1 2021 | FY 2021 | 
| Declaration | 22 Aug 2019 | 19 Mar 2020 | 20 Aug 2020 | 18 Mar 2021 | 19 Aug 2021 | 10 Mar 2022 | 
| Cents per share | 0.7 | 0.7 | 0.9 | 1.3 | 1.2 | 2.4 | 
| Dividend amount ($’m) | $0.95 | $0.96 | $1.23 | $2.47 | $2.28 | $4.55 |

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