Capital H1 2021 revenue of $98.7 million, up 51.6% on H1 2020

Capital Limited (LON:CAPD), a leading mining services company focused on the African markets, has announced half year results for the period 1 January to 30 June 2021. 


 H1 2021H1 2020% Change from H1 2020
Average Fleet Size (No. of drill rigs)99990.0%
Closing fleet size (No. of drill rigs)106997.0%
Rig Fleet Utilisation (%)735728.1%
ARPOR ($)180,000170,0005.9%
Capex1 ($ m)27.77.0295.7%
Revenue ($ m)98.765.151.6%
EBITDA2 ($ m)28.415.484.4%
EBIT2 ($ m)20.29.6110.4%
Adjusted Net Profit3 ($ m)12.73.8238.6%
Investment Gains ($ m)5.79.9-42.3%
Net Profit After Tax ($ m)18.413.635.3%
Earnings per Share   
Basic (adjusted) 3 (cents)6.72.8140.1%
Basic (cents)9.810.0-2.5%
Interim Dividend per Share (cents)1.20.933.3%
Net Asset Value per Share (cents)86.372.419.2%
Adjusted Return on Capital Employed (ROCE) (%)417.923.1 
Net Debt ($ m)32.80.1 
Net Debt/Equity (%)20.10.1 

*All amounts are in US dollars unless otherwise stated

(1) Capex is net of prepayments.

(2) 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.

(3) Adjusted net profit and adjusted earnings per share are pre investment gains.

(4) Adjusted ROCE is calculated utilising 12 months EBIT and excludes investments at fair value from assets.

Financial Overview

·    H1 2021 revenue of $98.7 million, up 51.6% on H1 2020 ($65.1 million);

·    H1 2021 EBITDA of $28.4 million, up 84.4% on H1 2020 ($15.4 million);

·    EBITDA margins increased to 28.8% from 23.7% in H1 2020;

·    Net gains from equity investments of $5.7 million in H1 2021 (realised + unrealised), increasing the value of Group strategic investments to $31.0 million, net of cash proceeds, as of 30 June 2021 (31 December 2020: $27.2 million);

·    Net Profit After Tax (NPAT) $18.4 million (including investment gains), an increase of 35.3% on H1 2020 ($13.6 million);

·    Cash capex of $27.7 million (H1 2020: $7.0 million) included the majority of the remaining capex relating to the Sukari earth moving contract;

·    Cash from operations of $5.4 million (H1 2020: $7.0 million), impacted by a significant build in working capital;

·    Net debt of $32.8 million (H1 2020: net debt of $0.1 million and year end 2020 net cash of $5 million) reflecting increased capex for Sukari;

·    Earnings per share (including investment gains) was 9.8 cents in H1 2021 (H1 2020: 10.0 cents); and

·    Declared an interim dividend of 1.2 cents per share, to be paid on 1 October 2021 to shareholders registered on 3 September 2021 (up 33.3% on 2020 interim dividend 0.9 cents per share).  

Operational & Strategic Review 

·      Rig fleet utilisation increased to 79% in Q2 2021, an increase of 36.2% on Q2 2020 (58%) and 17.9% on Q1 2021 (67%);

·      Non-drilling revenue contributed 17% of total revenue for H1 2021, compared with H1 2020 (9%[1]), driven by mining services, maintenance services and MSALABS;

·      West African region’s contribution to Group revenue was 38% in H1 2021, compared to a 31% contribution in H1 2020 and 32% in H2 2020;

·      H1 2021 average rig utilisation was 73%, an increase of 28.1% on H1 2020 (57%) and 21.7% on H2 2020 (60%);

·      Average monthly revenue per operating rig (“ARPOR”) of $180,000, up 5.9% on H1 2020 ($170,000) and 5% on H2 2020 ($172,000) as core long-term contracts continue to perform strongly;

·      Safety performance remains outstanding with Capital achieving eight LTI free milestones, six of which are in excess of three years;

·      Previously announced contracts:

–        New contract awards include an exploration contract with new client Shanta Gold at its West Kenya project, Kenya (commencing Q3), together with exploration contracts with Arrow Minerals (Burkina Faso) and Allied Gold (Egypt); and

–        Contract extensions include a two-year contract extension for surface exploration and resource development drilling with Resolute at the Syama Gold Mine, Mali.

·      Increased rig capacity at multiple operations, including:

–        Sukari Gold Mine, Egypt (Centamin);

–        Geita Gold Mine, Tanzania (AngloGold);

–        North Mara Gold Mine, Tanzania (Barrick);

–        Morila Gold Mine, Mali (Firefinch); and

–        Sanankoro Project, Mali (Cora Gold).

·      New contract wins include:

–        Exploration contract with Altus Strategies (Mali);

–        A two-year grade control and delineation drilling contract with Kinross (Mauritania);

–        An additional exploration and delineation rig with Centamin (Egypt); and

–        MSALABS provisionally awarded a five-year contract with Societe Des Mines De Morila SA at the Morila Gold Mine in Mali (80% owned by Firefinch ASX:FFX), subject to final terms and conditions. The contract would include the new Chrysos PhotonAssay technology with a unit expected to be on site before the end of the year. This would be the first Chrysos unit to be deployed in Western Africa.

·      Sukari Gold Mine (Egypt) waste mining and expanded drilling contracts continue to perform well:

–        Blast hole fleet is fully utilised, with all seven new blast hole rigs now operational;

–        Large excavator fleet (1 x CAT 6020 and 2 x CAT 6040) commissioned and operational; and

–        Workforce recruitment is approximately 98% complete, with remaining employees undergoing onboarding.

·      MSALABS continues to expand, and is advancing the installation of Chrysos’s PhotonAssay units:

–        The initial Chrysos unit has arrived in Tanzania and is in transit to the Bulyanhulu laboratory, commissioning is anticipated imminently, with the Chrysos team now on site;

–        Additional Chrysos unit secured for Canada and scheduled for arrival in Val d’Or, Quebec, in Q4, representing an expansion of our presence in the country and entry into the prolific Abitibi Belt. Offtake discussions are well advanced for the unit’s capacity; and

–        Expanded services with Thor Explorations, commencing management of the mine site laboratory following the first gold pour at the Segilola mine during July.

·      Rig count increased from 98 (31 March 2021) to 106 with the acquisition of new rigs to support existing long term contracts, including four blast hole rigs for Sukari (Egypt), three underground rigs for Geita (Tanzania) and one RC rig for Yanfolila (Mali); and

·      The Group’s portfolio of ten long-term mine-site based contracts performed well.


·      Demand for drilling services has continued to increase this year and the outlook remains robust for maintaining a high utilisation rate through H2 2021;

·      Increases to capex and exploration budgets across the mining sector, supported by the performance of gold, continues to provide a strong tailwind for Capital with c.90% of revenue exposed to the African gold mining sector;

·      Strong demand for laboratory services with MSALABS installing two Chrysos units in H2 2021, and a third unit scheduled for Morila;

·      Drill rig fleet size forecast to increase by a further eight rigs by the end of 2021;

·      Sukari earth moving works continue to ramp up ahead of schedule. Guidance for full operating run rate remains Q4 2021;

·      Highly active tendering market across all business activities, with particularly strong demand in drilling especially in West Africa; and

·      Capital remains committed to its strategy of maintaining a strong balance sheet and providing returns to its shareholders.

The Group maintains its revenue guidance range of $200-210 million for 2021, as guided in the Q2 2021 trading update.

Commenting on the results, Jamie Boyton, Executive Chairman of Capital Limited, said:

“We are pleased to report the Group has delivered its strongest half year performance since its inception. Strength across all areas of the business has led to significant revenue growth, up 52% on the prior period, a reflection of an outstanding performance at our underlying operations and improved market activity. Given the strength of the underlying business, we have today announced an interim dividend to shareholders of 1.2 cents per share, representing a 33% increase on the previous corresponding period.

This year marks a transformational step for Capital as the Group’s mining business began its first major earthmoving contract at Sukari. The team delivered on a demanding ramp up schedule, with mine production commencing in February, just two months after winning the contract. The blast hole fleet is now fully utilised and the three excavators are commissioned and operational. We expect to reach steady state in Q4 this year and deliver incremental revenues of $235 – $260 million over the next four years.

The core drilling business has continued to go from strength to strength. Not only did our fleet size rise from 94 to 106 rigs through the half but our utilisation rate increased from 60% in H2 2020 to 73% in H1 2021, ending Q2 at 79%, levels not seen since 2012. This uplift has been driven by new contract wins and expansion at existing sites including West Africa, a pleasing result following our focus on restructuring and rebalancing our business over the past three years.  

Safety remains at the core of our operations and we have achieved exceptional results during the half, with safety milestones achieved across many of our existing long-term contract sites, including sites with multi-year LTI free records.

MSALABS, our laboratory business, continued to perform well and is positioning itself for growth as it rolls out the revolutionary Chrysos PhotonAssay units. The first of these is now in Tanzania in transit to the Bulyanhulu mine site, marking the largest contract since MSALABS’ establishment. Chrysos has the potential to disrupt the geochemical analysis sector and we are encouraged by the demand we see as we prepare to roll out the second unit in Val d’Or in Quebec, Canada, in Q4 this year and the third at Morila in Mali soon thereafter.

Another key contributor to our strong result for the half has been returns from our equity investments. Capital Investments not only contributes through equity returns, which amounted to $5.7m in H1 2021, but has also served as a highly effective business development tool for several years. This creates a strong partnership approach to our contracting and remains core to the investment strategy.

As the business continues to develop and expand, the long term prospects for Capital look highly encouraging.  The gold price, our principal commodity exposure, remains at elevated levels and equity markets continue to be supportive for capital raising activity, with fundraisings for Juniors and Intermediates experiencing a significant uptick in H1 2021 to decade highs. Despite the increased activity, our strategy remains focused on mine sites to ensure a business that is sustainable through the cycles.

Capital’s position of offering not only drilling but also mining and laboratory services to mine sites, all of which are crucial to the sustainability and growth of any large scale mine, has provided a broader, stronger platform to sustain its growth trajectory over the next few years. We will continue to pursue our key strategic priorities during 2021, focusing on growing our full-service mining business, growing revenues from our ancillary services businesses, expanding capacity with our existing clients and further increasing fleet utilisation. We also remain committed to maximising free cash flow generation and maintaining our strong balance sheet to support further growth initiatives and returns to our shareholders.”

Capital Limited will be hosting a live webcast presentation at 09:00 BST on Thursday 19 August 2021, where questions can be submitted through the platform.

The webcast presentation link:

Dial-in details

United Kingdom Toll-Free: 08003589473 PIN: 74683173#

United Kingdom Toll: +44 3333000804 PIN: 74683173#

Link for international access numbers

Participants may join the webcast approximately five minutes before the commencement time. A copy of the Company’s presentation will be available on 

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