London-listed mining services company Capital has posted 2023 first-half net profit of US$16.8 million, down 15.6% on the previous corresponding period, on 11.7% higher revenue of $154.3 million as it continues to invest heavily in growth.
The drilling and mining contractor, which has a fast-growing mineral analysis business, allocated $36.2m of capital expenditure in the first half of 2023, compared with $22.6m in the same period last year, while its net debt nearly doubled year-on-year to $66.5m (at the end of June) as it geared up in Gabon under a new services contract with Fortescue-controlled Ivindo Iron.
Capital’s dominant drilling arm, running 125 rigs through Q2, had lower average rig utilisation in the first half of 2023 (75% versus 83% in H1 2022), with conflict in Sudan a factor, however, average monthly revenue per operating rig (ARPOR) was 8.7% higher year-on-year at US$188,000 in H1 2023.
Capital’s 2023 H1 EBITDA of $43.9m was up 10% yoy, while its EBITDA margin was about the same at 28.5%.
CEO Peter Stokes said full-year revenue guidance remained at $320-340m and EBITDA margins were expected to remain at 25-30% going forward.
“Despite temporary operational disruption through the period, namely the Meyas Sand gold project [in] Sudan, the underlying demand from our customers continues to remain strong and we remain confident in our revenue guidance for 2023 of $320-340m,” Stokes said.
“We remain active in tendering across the business, with our capital allocation strategy biased towards returns and not a singular business division.
“Given the strength in the business, we have now also announced an interim dividend of 1.3c per share, a testament to our commitment to creating value for our shareholders and our confidence in the bright future ahead for our company.”
Capital’s share price is down about 10% in the past month, capitalising the company at £154 million.