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Capital Drilling revenues soar, swings group to a profit
Drilling services group Capital Drilling swung to a profit in its most recent trading year, thanks to a substantial boost to its revenue.
Capital Drilling posted a pre-tax profit for the year ended 31 December of $9.7m, a marked improvement from the loss of $1m a year earlier, principally driven by a substantially higher revenue that more than offset increasing administrative expenses.
Revenue rose 28% to $119.5m, leading to a gross profit of $39.3m, up almost 50% from $26.3m, thanks to increased contributions from its Geita and Sukari projects, as well as contracts from Mali, Mauritania, Kenya, and Serbia.
EBITDA moved ahead an impressive 85.5% to $24.3m.
Capital's average fleet size dropped to 93 drill rigs from the 94 it held in 2016, helping push its fleet utilisation rate to 53% from 45% and the average revenue per operating rig to $194,000 from $177,000.
Capital Drilling will pay a final dividend of 1.2 cents per share, up from 1.0 cents the year before.
As of 31 December, net cash had moved ahead more than 700% to $4.9m from the $600,000 posted a year earlier.
Capital's executive chairman Jamie Boyton, said, "Capital Drilling saw a return to profitability in 2017 as the company continued to drive down costs, extend long-term contracts, as well as secure additional long-term contracts in the West Africa market."
"Metals prices improved over 2017 and there was a strong increase in capital markets activity, which has translated into increased budgets from mining and exploration companies. The work done in 2016 in preparing and mobilising assets in preparation for the improving sector contributed to an outstanding increase in cash generation and profitability for the group," Boyton added.
Earnings per share swung from a loss of 3.6 cents to a gain of 3.8 cents each.
As of 1200 GMT, shares had gained 8.24% to 39.29p.