# Capital Ltd revenue up 52% on Q1 2021 to US$66.9 million

- Link: https://www.directorstalkinterviews.com/capital-ltd-revenue-up-52-on-q1-2021-to-us66.9-million/4121061740
- Published: 2022-04-21T07:32:58+01:00
- Author: Giles

**Capital Ltd** ([LON:CAPD](https://www.directorstalkinterviews.com/company/capital-drilling-ltd/capd.l)),
a leading mining services company focused on the African markets, has provided its
Q1 2022 trading update for the period ended 31 March 2022.

**FIRST QUARTER (Q1) 2022 KEY METRICS**

|  | Q1 2022 | Q1 2021 | Q4 2021 | % change fromQ1 2021 | % change fromQ4 2021 | 
| Revenue (US$m) | 66.9 | 44.0 | 66.5 | 52.0% | 0.6% | 
| ARPOR*(US$) | 174,000 | 180,000 | 184,000 | -3.3% | -5.4% | 
| Average utilised rigs | 90 | 64 | 86 | 40.6% | 4.7% | 
| Fleet Utilisation (%) | 82% | 67% | 79% | 22.4% | 3.8% | 
| Average Fleet | 110 | 95 | 109 | 15.8% | 0.9% | 
| Closing fleet size | 110 | 98 | 109 | 12.2% | 0.9% |

_* Average monthly revenue per operating rig_

**Financial Highlights**

· Revenue US$66.9 million, a 52.0% increase on Q1 2021 (US$44.0 million) and a 0.6%
increase on Q4 2021 (US$66.5 million);

· Mine-site services continue to underpin revenue streams, contributing 87% of Group
revenue;

· Strong growth in non-drilling revenue contribution (28% of total revenue) compared
with Q1 2021 (21%), particularly driven by the ramp up of Mining Services and MSALABS;

· Average monthly revenue per operating rig (“ARPOR”) decreased 2.2% on Q1 2021 (
$184,000) and 5.4% (US$174,000) on Q4 2021 (US$184,000). ARPOR in the quarter was
impacted by increased rig movement within each region and also a higher proportion
of revenue at Geita coming from the underground;

· Final dividend of US 2.4 cps declared at the FY21 results for the 2021 financial
year (2020: US 1.3 cps), will be payable 10 May 2022.

**Operational Highlights**

· Fleet Utilisation increased to 82%, an increase of 22.4% on Q1 2021 (67%) and 
3.8% on Q4 2021 (79%) driven by start-up of new contracts;

· Safety performance remains world-class with the Group remaining LTI free across
twenty-six sites in Q1 2022;

–  Two sites in our East African operations achieved safety milestones remaining
LTI free for five and six years;

· Capital Drilling: Outlook underpinned by further contract wins:

–  New contract wins:

– An extension of the exploration and delineation drilling contract with Predictive
Discovery at its Bankan Project in Guinea, initially expanding from 2 to 5 rigs;

– An exploration drilling contract with WIA Gold at its Bouaflé project in Côte 
d’Ivoire;

–  An extension of the exploration drilling contract with Golden Rim at the Kada
Gold mine in Guinea;

–  An extension of the exploration drilling contract with Perseus Mining at the 
Yaouré Gold mine in in Côte d’Ivoire;

–  Rig count increased from 109 (31 December 2021) to 110, with 5 rigs due to be
commissioned in Q2 2022.

· Capital Mining continues to perform strongly

–  Sukari Gold Mine (Egypt) waste mining contract continues to perform at steady
state levels aligned to contract targets for the quarter;

–  Capital remains active in the tendering pipeline as mining projects move through
the DFS stage.

· MSALABS: Growth trajectory on track

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

– MSALABS provisionally awarded a 5-year agreement with Barrick at the Kibali Gold
Mine in the Democratic Republic of Congo for provision of laboratory management,
sample preparation, and geochemical assay services on site, subject to final terms
and conditions. The contract includes the new Chrysos PhotonAssay technology, with
a unit expected to be on site in H2 2022;

– Awarded a 12-month contract with New Found Gold for processing 20,000 samples 
per month through our new Val d’Or PhotonAssay facility commencing in Q2 2022;

–  Awarded a 3-year contract with Victoria Gold Corp for the provision of a sample
preparation facility on site at its Eagle Gold Project near Mayo, Yukon as well 
as geochemical assay services in our Langley Hub laboratory;

–  Awarded a 2-year contract and commenced provision of services with Shanta Gold
for sample preparation on site at their West Kenya Project Area. 

**Outlook**

· Q1 2022 has continued to see robust demand with the outlook remaining strong across
all business units;

–  The drilling business has a strong outlook with utilisation rates at very high
levels and the group’s rig count due to finish the year ~10 rigs higher than at 
the end of Q1 2022; 

–  The Sukari earth moving contract is now performing at steady state levels; 

–  MSALABS is experiencing very strong demand for its laboratory services with the
rollout of the Chrysos units progressing further in Q1 2022 and set to continue 
through the remainder of the year;

–  Business mix underpinned by long-term mine-site contracts with blue-chip customers,
with  non-drilling revenues to proportionally increase further through 2022;

–  Tendering activity across all business units remains robust, with a number of
opportunities progressing;

· Macro conditions continue to suggest sustained strength in the demand environment
and outlook with gold and other key commodities still trading at near decade long
highs; and

· Revenue guidance for 2022 remains $270 to $280 million (compared to FY2021 revenues
of $226.8 million).

> **Commenting on the trading update, Jamie Boyton, Capital Ltd Executive Chairman,
> said:**
> ‘The Group had another strong performance through Q1 2022 across all its business
> units, setting a solid foundation to deliver another record year in 2022. While
> we continue to see growth across all business units, our focus on operational 
> excellence and safety remains paramount and so it is pleasing to see another world
> class performance. Market conditions remain buoyant, and we are very active in
> the tendering market across drilling, mining and MSALABS. We maintain our revenue
> guidance of $270-280 million.
> In drilling, while we saw some short term variation in group ARPOR, utilisation
> rates were very strong as a number of new contracts were brought online. We expect
> the division to continue to grow through the year, with the expected increase 
> in rig count weighted Q2-Q4 of this year. Our mining division continues to perform
> well with Sukari now operating at peak steady state levels. MSALABS also continues
> to go from strength to strength on an exceptional growth trajectory, both with
> its traditional business and in the roll out of the revolutionary Chrysos technology,
> highlighted by the clear demand for the unit in Val d’Or and the provisional award
> for a unit at Barrick’s Kibali Gold mine.’

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