RNS Number : 4679C
Capital Limited
27 March 2025
Capital Limited
("Capital", the "Group" or the "Company")
Full Year Financial Results for the Year Ended 31 December 2024
Capital (LSE: CAPD), a leading mining services company, today provides its full year financial results for the year ended 31 December 2024.
FY 2024
FY 2023
vs FY 2023
Revenue
348.0
318.4
9.3%
EBITDA (adjusted for IFRS 16 leases and exceptional items)1,2,3
80.0
91.8
(12.9%)
Operating Profit
39.3
60.3
(34.9%)
Operating Profit (excluding exceptional items)4
47.3
60.3
(21.5%)
Investment Gain / (Loss)
12.1
3.0
304.7%
Net Profit After Tax (NPAT)
18.3
38.5
(52.5%)
NPAT (excluding exceptional items and investment gain/(loss))4
14.3
35.5
(59.7%)
Earnings per share
Basic EPS (cents)
8.9
19.1
(53.5%)
Basic EPS (excluding exceptional items and investment gain/(loss)) (cents)
6.8
17.5
(61.1%)
Final Dividend per Share (cents)
1.3
2.6
(50.0%)
Cash from Operations (adjusted for IFRS 16 leases)2
77.1
84.3
(8.6%)
Capex5
67.2
69.0
(2.6%)
Net Debt1
75.7
69.8
8.5%
Investments held at fair value
30.3
47.2
(35.8%)
Margins
EBITDA Margin (adjusted for IFRS 16 leases and exceptional items)1,2,3
NPAT Margin (excluding exceptional items and investment gain/(loss))
4.1%
11.2%
All amounts are in US dollar millions unless otherwise stated
(1) EBITDA and Net Debt 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. Alternative performance measures are detailed on pages 21 - 22 of this results announcement. (2) Adjustment for the cash cost of the IFRS 16 leases, which amounts to $13.1 million in 2024 and $8.2 million in 2023. (3) Exceptional items include ERP implementation costs of $2.7 million (2023: nil) and provisions against VAT receivables of $2.5 million (2023: nil). (4) Exceptional items include ERP implementation costs of $2.7 million (2023: nil), provisions against VAT receivables of $2.5 million (2023: nil) and impairments relating to MSALABS of $2.8 million (2023: nil). (5) Capital expenditure (Capex) consists of cash purchases of PPE, prepayments for PPE and assets purchased through OEM-financing.
FY 2024 Financial Overview
· FY 2024 revenue of $348.0 million, up 9.3% on FY 2023 ($318.4 million);
· FY 2024 EBITDA (adjusted for IFRS16 leases and exceptional items) of $80.0 million, down 12.9% on FY 2023 ($91.8 million);
· FY 2024 EBITDA margin (adjusted for IFRS16 leases and exceptional items) down to 23.0% (FY 2023: 28.8%);
· Value of the Group's strategic investment portfolio as of 31 December 2024 decreased to $30.3 million (FY 2023: $47.2 million) including net cash disposal of $28.9 million;
· Operating Profit of $39.3 million for FY 2024, down 34.9% on FY 2023 ($60.3 million). Excluding the impact of exceptional items, adjusted operating profit is $47.3 million, down 21.5% on FY 2023 ($60.3 million);
- The Company has taken the decision to book non-cash provisions and impairments in 2024 primarily relating to historical VAT receivables and various laboratory assets in Mali.
· Net Profit After Tax (NPAT) of $18.3 million for FY 2024, down 52.5% on FY 2023 ($38.5 million). Excluding the exceptional items and impact of investment gains, adjusted NPAT is $14.3 million for FY 2024, down 59.7% on FY 2023 ($35.5 million);
· Basic Earnings Per Share (EPS) of 8.9 cents for FY 2024, down 53.5% on FY 2023 (19.1 cents). Excluding the impact of exceptional items and investment gains, adjusted EPS is 6.8 cents, down 61.1% on FY 2023 (17.5 cents);
· Cash from Operations (adjusted for IFRS 16 leases) of $77.1 million for FY 2024, a decrease of 8.6% on FY 2023 ($84.3 million);
· Total Capex of $67.2 million for FY 2024, a decrease of 2.6% on FY 2023 ($69.0 million). Total capex consisted of cash capex of $34.5 million (2023: $47.9 million), prepayments of $4.0 million (2023: $5.3 million) and financed capex of $28.7 million (2023: $15.8 million);
· Net Debt of $75.7 million, an increase of 8.5% on FY 2023 ($69.8 million); and
- Net debt excludes the investment holdings of $30.3 million.
· Declared a final dividend of $1.3 cents per share, to be paid on 15 May 2025 which, together with the interim dividend of $1.3 cents per share brings the total dividends declared for 2024 to $2.6 cents per share (2023: $3.9 cents per share).
Operational and Strategic Highlights
· Safety performance maintains its exceptional standing on a global scale with the 2024 Total Recordable Injury Frequency Rate ("TRIFR") of 0.78 per 1,000,000 hours worked, broadly in line with FY 2023 (0.75).
· Capital Drilling - Continued strength of our core business:
· Recent contract awards (previously announced):
- An 18-month diamond drilling services contract at the Mingomba Copper Project in Zambia owned by KoBold Metals;
- A 2-year diamond drilling services contract at Perseus Mining's Yaouré Gold Mine in Côte d'Ivoire;
- A 6-month reverse circulation drilling services contract with Aton Mining at its various exploration properties in Egypt; and
- A 6-month diamond drilling services contract with Lotus Gold at its project site in Egypt.
· Fleet utilisation for FY 2024 was 73%, compared to 73% in FY 2023;
· Average monthly revenue per operating rig ("ARPOR") was $204,000 in FY 2024, up 9.7% on FY 2023 ($186,000); and
· Rig count increased from 127 to 130 through FY 2024, net of depletion.
FY 2024
FY 2023
vs FY 2023
Closing fleet size
130
127
2.6%
Average Fleet
126
125
0.8%
Fleet utilisation (%)
73%
73%
(0.8%)
Average utilised rigs
92
92
0.0%
ARPOR1($)
$204,000
$186,000
9.7%
Surveying revenue ($m)
5.4
3.7
45%
Total Drilling and associated revenue2 ($m)
239.1
215.2
11.1%
(1) Average revenue per month per operating rig (2) Associated revenue refers to revenue generated from complementary services tied to our drilling operations.
· Capital Mining - New contract award at Reko Diq
· Major new contract award at Reko Diq:
- As previously announced, the Company has a letter of intent from Barrick, the operators of Reko Diq, to significantly expand our service offering at their 50% owned major copper-gold project in Pakistan beyond the reverse circulation and diamond drilling geotechnical services we have provided since early 2023;
- These additional works will utilise the majority of the Group's combined mining fleets and covers two components:
§ Early works civils focused on the construction phase of the project prior to first production. The first items of equipment are anticipated to arrive on site in H1 2025; and
§ Tailings storage facility ("TSF") mining services, with phased arrival of further equipment on site planned through 2025 with a gradual ramp up in operations from Q4 2025 onwards and currently envisaged to be at run rate utilisation in H2 2026.
· Other mining contracts came to an end in FY 2024:
- Sukari Gold Mine (Egypt) waste mining contract came to its natural end in September 2024; and
- At Belinga (Gabon), the customer gave notice to conclude our mining contract early in Q4 2024, as they altered their development strategy at the project.
· MSALABS - Ramping up Nevada Gold Mines contract
· Nevada Gold Mines contract:
- The first stage of our state-of-the-art laboratory at Nevada Gold Mines, equipped with Chrysos PhotonAssayTM technology, started receiving samples in Q4 2020 after a slower-than-expected start to the construction of the laboratory and subsequent ramp up; and
- Detailed design of second-stage wet chemistry and multi-element assaying facility is underway and is expected to be commissioned in H1 2026.
· New laboratory in Fairbanks, Alaska:
- We have completed construction of a new laboratory in Alaska. While this is a commercial laboratory, we expect to reach strong utilisation rapidly underpinned by large scale contracts with both Northern Star and Kinross Gold.
· Continued rollout of Chrysos PhotonAssayTM units:
- MSALABS possesses the largest international network of Chrysos PhotonAssay™ technology;
- MSALABS relationship with Chrysos Corporation remains strong with plans to deploy 21 units globally; and
- MSALABS has forged a global partnership with Barrick and Chrysos to deliver PhotonAssayTM technology across Barrick mine sites.
· Capital Investments - Significant returns realised
· Sale of entire shareholding in Predictive Discovery to Perseus Mining for a total cash consideration of ~$31.2 million during H2 2024;
· The total value of investments (listed and unlisted) was $30.3 million as at 31 December 2024 ($47.2 million as at 31 December 2023) including net cash disposal of $28.9 million;
· As at 31 December 2024, the investment portfolio has realised ~$12 million more than total cumulative amounts invested.
· The portfolio continues to be focused on a select few key holdings with our holdings in WIA Gold and Sanu Gold comprising over 80% of our investments.
Outlook
· Revenue guidance for FY 2025 of $300 - 320 million;
· Capital Drilling will focus on consolidating ramp ups in key growth area, particularly in Nevada, USA, and ensuring efficiency and productivity across the Group's drilling operations;
· Capital Mining will commence the Reko Diq early works civils contract during the year, pending final contract negotiations, with revenues weighted to H2 2025;
· MSALABS is consolidating its existing platform in key strategic locations. We aim to deliver our robust pipeline having strengthened our business development function. Additionally, we expect full run-rate revenues from the first stage of our Nevada Gold Mines laboratory and our Fairbanks laboratory.
· Capital expenditure is expected to be $45 - 55 million in FY 2025. This will fund the rebuilds and other ancillary spend relating to the new Reko Diq mining contract, typical sustaining and replacement capex across the drilling business to ensure ongoing productivity and the continued expansion of MSALABS; and
· Tendering activity remains robust across the Group with a number of high-quality opportunities progressing.
2024 Final Dividend Timetable
· Ex-Dividend Date: 17 April 2025
· Record Date: 22 April 2025
· Last Date for Currency Elections: 24 April 2025
· Payment Date: 15 May 2025
Dividend Currency Elections
The dividend will be paid on 15 May 2025, in US Dollars ("USD") with an option for shareholders to elect to receive the dividend in Pounds Sterling ("GBP"). Currency elections should be made no later than 24 April 2025 as per the instructions detailed on the Company website (www.capdrill.com). Payments in GBP will be based on the USD/GBP exchange rate on 22 April 2025) and the rate applied will be published on the website thereafter.
Commenting on the results, Jamie Boyton, Executive Chair, said:
"2024 has been a pivotal year of transition for Capital as we establish foundations and a clear roadmap to evolve into a larger, more resilient business - one equipped to deliver consistent margins through the cycle.
Nevertheless, this has not come without challenges with the ramp ups of some of our key growth areas, particularly in North America, behind expectations and negatively impacting our Group financials. In response, we have implemented a range of structural changes within our management team to better position our business to execute on the significant growth opportunities availed to the Group. As a result, we expect margins to bottom in H1 2025 and see a recovery thereafter. 2025 revenue is expected to be in the range of $300 - 320 million with revenues H2-weighted given the ramp up of new projects, predominantly in our mining business.
As we look forward, we see significant growth coming on stream across MSALABS, our mining division, and through continuing to leverage our strong drilling platform. Importantly, this growth comes with reduced capital spend, largely utilising equipment we already own, following a major investment cycle over the past 4 years. This is highlighted by our 2025 capex guidance of $45 - 55 million, a significant year-on-year reduction. This allows us concentrate on successfully finalising the current ramp ups and drive cash flow and a return on our investments.
Whilst we acknowledge challenges throughout the year, we remain positive about the outlook for the business and are excited by opportunity suite ahead of us. We have set a clear pathway to putting the current challenges behind us and driving positive momentum through 2025 and a resumption of growth into 2026 and beyond."
Capital Limited will be hosting a live webcast presentation at 9:00am GMT on Thursday 27th March 2025, where questions can be submitted through the platform.
The webcast presentation link:
Issuer Services | London Stock Exchange | Capital Limited FY 2024 Results
Participants may join the webcast approximately five minutes before the commencement time. A copy of the Company's presentation will be available on www.capdrill.com
- ENDS -
For further information, please visit Capital's website www.capdrill.com or contact:
Capital Limited investor@capdrill.com
Jamie Boyton, Exectuive Chair
Rick Robson, Chief Financial Officer
Conor Rowley, Corporate Development & Investor Relations
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Stifel Nicolaus Europe Limited +44 20 7710 7600
Ashton Clanfield
Callum Stewart
Rory Blundell
FTI Consulting +44 20 3727 1000
Ben Brewerton capitallimited@fticonsulting.com
Nick Hennis
Lucy Wigney
About Capital Limited
Capital Limited is a leading mining services company that provides a complete range of drilling, mining, maintenance and geochemical laboratory solutions to customers within the global minerals industry. The Company's services include exploration, delineation and production drilling; load and haul services; maintenance; and geochemical analysis. The Group's corporate headquarters are in the United Kingdom and it has established operations in Canada, Côte d'Ivoire, Democratic Republic of Congo, Egypt, Gabon, Ghana, Guinea, Kenya, Mali, Mauritania, Pakistan, Saudi Arabia, Tanzania, United States of America and Zambia.
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
Audited Audited
Notes
2024
2023
US$'000
US$'000
Revenue
3
348,000
318,424
Cost of sales
4
(203,233)
(171,524)
Gross profit
144,767
146,900
Administration expenses
5
(56,945)
(46,852)
Depreciation, amortisation, and impairments
6
(48,562)
(39,766)
Operating profit
39,260
60,282
Interest income
38
65
Finance costs
(16,741)
(13,002)
Fair value gain on financial assets
12,097
2,989
Share of loss of associate
(387)
-
Profit before taxation
34,267
50,334
Taxation
7
(15,949)
(11,804)
Profit and total comprehensive income for the period
18,318
38,530
Profit attributable to:
Owners of the parent
17,315
36,737
Non-controlling interest
1,003
1,793
18,318
38,530
Earnings per share:
Basic (cents per share)
8
8.87
19.09
Diluted (cents per share)
8
8.85
18.82
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Audited
Audited
Notes
2024
2023
ASSETS
US$'000
US$'000
Non-current assets
Property, plant and equipment
10
240,969
208,657
Right-of-use assets
11
32,062
29,684
Goodwill
1,296
1,296
Intangible assets
794
572
Other receivables
13
10,790
9,789
Investment in associate
6,300
-
Total non-current assets
292,211
249,998
Current assets
Inventories
61,912
61,922
Trade receivables
12
60,226
49,567
Other receivables
13
26,044
24,055
Investments at fair value
30,304
47,154
Current tax receivable
505
686
Cash and cash equivalents
40,526
34,366
Total current assets
219,517
217,750
Total assets
511,728
467,748
EQUITY AND LIABILITIES
Equity
Share capital
14
20
19
Share premium
14
64,719
62,390
Equity-settled employee benefits reserve
3,972
5,763
Other reserve
190
190
Retained income
202,674
195,515
Equity attributable to owners of the parent
271,575
263,877
Non-controlling interest
11,813
9,270
Total equity
283,388
273,147
Non-current liabilities
Loans and borrowings
14
86,925
75,521
Lease liabilities
22,226
21,109
Trade and other payables
7,511
2,057
Deferred tax
3,195
34
Total non-current liabilities
119,857
98,721
Current liabilities
Trade and other payables
57,821
50,685
Provisions
203
487
Current tax payable
10,640
9,315
Loans and borrowings
14
28,259
27,052
Lease liabilities
11,560
8,341
Total current liabilities
108,483
95,880
Total equity and liabilities
511,728
467,748
CAPITAL LIMITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
Notes
2024
2023
US$'000
US$'000
Cash flow from operating activities
Cash generated from operations
15
90,133
92,532
Interest income received
38
65
Finance costs paid
(12,097)
(9,441)
Interest paid on lease liabilities
11
(3,067)
(2,081)
Tax paid
(11,282)
(11,905)
Net cash from operating activities
63,725
69,170
Cash flow from investing activities
Purchase of property, plant and equipment
10
(34,469)
(47,876)
Proceeds from sale of property, plant and equipment
300
69
Purchase of intangible assets and cloud computing arrangements
(2,352)
(1,777)
Purchase of investments at fair value
(8,480)
(9,258)
Purchase of investment in associate
(6,688)
-
Proceeds on sale of investments at fair value
37,278
4,668
Cash paid in advance for property, plant and equipment
(3,970)
(5,318)
Advance payments on leases
(1,825)
(1,205)
Net cash from investing activities
(20,206)
(60,697)
Cash flow from financing activities
Proceeds from loans and borrowings
14
30,000
38,000
Repayment of loans and borrowings
14
(47,262)
(26,732)
Repayment of principle on leases liabilities
11
(10,008)
(6,152)
Arrangement fees paid for new financing
(392)
-
Dividends paid
9
(7,686)
(7,637)
Proceeds from issuance of equity to non-controlling interests
719
1,193
Purchase of shares from non-controlling interest
(1,603)
(1,404)
Net cash from financing activities
(36,232)
(2,732)
Net increase in cash and cash equivalents
7,287
5,741
Cash and cash equivalents at the beginning of the period
34,366
28,380
Effect of exchange rate movement on cash balances
(1,127)
245
Cash and cash equivalents at the end of the period
40,526
34,366
Advance payments on leases has been reclassified from financing activities to investing activities in current and prior period. The impact of this change was not material to the financial statements.
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the year ended 31 December 2024
1.
General information
Preparation of the condensed consolidated interim financial statements
Capital Limited (the "Company") is incorporated in Bermuda. The Company and its subsidiaries (the "Group") provide drilling, mining (load and haul), crushing, mineral assaying and surveying services. The Group also has a portfolio of investments in listed and unlisted exploration and mining companies.
2.
Basis of presentation
The condensed consolidated financial statements are prepared on the going concern basis under the historical cost convention, except for certain financial instruments which are measured at fair value. The directors are responsible for the preparation of the results announcement.
The condensed consolidated financial statements included in this results announcement has been prepared in accordance with the measurement and recognition criteria of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Whilst the financial information included in this results announcement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to comply with the disclosure requirements of IFRS. The Group's 2024 Annual Consolidated Financial Statements have been prepared in accordance with IFRS. The results announcement does not constitute a dissemination of the annual financial reports. A separate dissemination announcement in accordance with Disclosure and Transparency Rules (DTR) 6.3 will be made when the Annual Report and audited consolidated Financial Statements are available on the Company's website. The accounting policies are in terms of IFRS and consistent with those of the prior year.
The financial information for the years ended 31 December 2024 and 2023 does not constitute the annual financial statements. The annual consolidated financial statements for the year ended 31 December 2024 and 2023 were completed and received an unmodified audit report from the Company's Auditors.
Going concern
As at 31 December 2024, the Group had a robust balance sheet with a modest debt gearing with equity of US$284.3 million and loans and borrowings of US$116.3 million. Cash as at 31 December 2024 was US$40.5 million, with net debt of US$75.7 million. Investments at fair value at the end of December 2024 amounted to US$30.3 million which provides additional flexibility as these investments could be converted into cash.
This robustness is underpinned by stable cash flows generated by a diversified service offering and diversified contract portfolio. Revenues continued to perform strongly in 2024 with increased revenue of 9% compared to 2023. Commercially, the Nevada Gold Mines contract should reach its full capacity during the year and we expect MSALABS to continue its strong revenue growth experienced in 2024. Furthermore, the Group continues to leverage its strong relationships across the mining sector with contract extensions at Perseus' Sissingué Gold Mine in Côte d'Ivoire and new contract awards at their Yaouré Gold Mine in Côte d'Ivoire and the Nyanzaga Gold Project in Tanzania. Looking forward, the Group is currently mobilising the majority of our mining equipment fleet to Barrick's world-class Reko Diq copper-gold project in Pakistan, which will involve both early works civils and longer-term tailings storage facility mining services.
In determining the going concern status of the business, the Board has reviewed the Group's forecasts for the 18 months to June 2026, including both forecast liquidity and covenant measurements. In the assessment, management took into consideration the principal risks of the business that are most relevant to the going concern assessment and reverse stressed the forecast model to identify the magnitude of sensitivity required to cause a breach in covenants or risk the going concern of the business, alongside the Group's capacity to mitigate. The most relevant sensitivity was considered to be a decrease in EBITDA through loss of contracts, with no redeployment of equipment or other mitigating actions. EBITDA would need to fall by 19% during the period of assessment for going concern to breach the covenant test (interest cover) at June 2025. However, if mitigating actions (in this case the sale of investments) were undertaken, then EBITDA would need to fall by 34% during the period of assessment for going concern to breach the covenant test (interest cover) at June 2025.
Given the Group's exposure to high-quality mine site operations and strong relationships with blue-chip customers, we consider a decrease of such magnitude to be remote. Based on its assessment of the forecasts, principal risks and uncertainties and mitigating actions considered available to the Group in the event of downside scenarios, the Board confirms that it is satisfied the Group will be able to continue to operate and meet its liabilities as they fall due over the going concern period to June 2026. Accordingly, the Board has concluded that the going concern basis of preparation of the Financial Statements is appropriate and that there are no material uncertainties that would cast doubt on that basis of preparation.
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
3.
Revenue
2024
2023
US$'000
US$'000
Revenue from the rendering of services comprises:
Drilling and associated revenue
233,678
211,552
Revenue from Mining
65,242
64,721
Laboratory services revenue
43,647
38,405
Revenue from Surveying
5,433
3,746
348,000
318,424
4.
Cost of Sales
2024
2023
US$'000
US$'000
Employee costs
89,074
70,865
Consumables
25,145
24,554
Repairs and maintenance
28,819
23,250
Fuel
3,647
5,531
Camp operational cost
6,054
6,116
Other cost of sales
7,877
9,715
Landed cost - Inventory
11,622
11,757
Equipment hire
4,235
2,245
Travel and accommodation
5,707
5,704
Safety gear and equipment
3,883
3,517
Mobilisation and amortisation
7,783
1,434
Chrysos variable costs
2,154
1,754
Insurance - Equipment
2,048
1,294
Others
5,185
3,788
203,233
171,524
5.
Administration Expenses
2024
2023
US$'000
US$'000
Employee costs
22,381
19,809
Professional fees
5,594
3,813
Insurance
2,216
1,986
Rental cost
1,921
1,605
Share based payment expenses
539
3,540
Bad debts written off
258
218
Expected credit loss provision
(160)
1,717
Travel and accommodation
3,788
3,211
Bank charges
1,606
1,382
Foreign exchange loss / (gain)
2,107
(151)
Software costs
2,039
1,933
ERP implementation costs
2,661
-
Other tax
1,439
557
Provision for VAT recoverable
2,545
-
Other expenses
8,011
7,232
56,945
46,852
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
6.
Profit from Operations
2024
2023
US$'000
US$'000
The following items have been recognised as expenses in determining profit from operations:
Depreciation, amortisation and impairments
Depreciation and amortisation:
Land and buildings
231
-
Right of use assets
12,025
7,510
Computer software
9
7
Drilling rigs
10,573
10,521
Associated drilling equipment
6,082
4,900
Vehicles and trucks
4,716
4,493
Camp and associated equipment
3,925
2,594
Mining equipment
7,041
9,302
Total depreciation
44,602
39,327
Impairment:
Right-of-use assets
1,766
-
Drilling rigs
226
-
Heavy Mining equipment
907
-
Vehicles and trucks
-
389
Camp and associated equipment
1,061
50
Total impairment
3,960
439
Total depreciation,amortisation and impairments
48,562
39,766
Operating lease expense
Short term equipment rental
6,046
3,786
Employee costs
Salaries, wages, bonuses and other benefits
111,456
90,673
Share based compensation expense
539
3,540
Total employee costs
111,995
94,213
Other
Loss on disposal of property, plant and equipment
594
946
Legal and professional fees
5,594
3,813
Stock write-off
686
691
Provision for inventory obsolescence
385
574
Allowance for credit losses
(160)
1,716
Bad debts written off
258
218
Other taxes
1,439
558
Provision for VAT recoverable
2,545
-
Increase in provisions for other taxes
44
136
7.
Taxation
Capital Limited is incorporated in Bermuda and tax resident in the United Kingdom and the Group operates in multiple countries jurisdictions with complex legal and tax regulatory environments. Taxation is calculated in accordance with local legislation and the prevailing tax rates.
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
7.
Taxation (continued)
The Group has taken income tax positions that management believes are supportable and are intended to withstand challenge by tax authorities. Some of these positions are inherently uncertain and include those relating to transfer pricing matters and the interpretation of income tax laws. The Group periodically reassesses its tax positions. Changes to the financial statement recognition, measurement, and disclosure of tax positions is based on management's best judgement given any changes in the facts, circumstances, information available and applicable tax laws. Considering all available information and the history of resolving income tax uncertainties, the Group believes that the ultimate resolution of such matters will not likely have a material effect on the Group's financial position, statements of operations or cash flows.
8.
Earnings per share
2024
2023
Basic Earnings per share:
The profit and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
Profit for the year used in the calculation of basic earnings per share (US$'000)
17,315
36,737
Weighted average number of ordinary shares for the purposes of basic earnings per share
195,112,329
192,451,358
Basic earnings per share (cents)
8.87
19.09
Diluted earnings per share:
2024
2023
The profit used in the calculations of all diluted earnings per share measures are the same as those used in the equivalent basic earnings per share measures, as outlined above. ($)
17,315
36,737
Weighted average number of ordinary shares used in the calculation of basic earnings per share
195,112,329
192,451,358
- Dilutive share options #
465,154
2,801,729
Weighted average number of ordinary shares used in the calculation of diluted earnings per share
195,577,483
195,253,087
Diluted earnings per share (cents)
8.85
18.82
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
9.
Dividends
During the 12 months ended 31 December 2024, a dividend of 2.6 cents (2023: 2.6 cents) per ordinary share, totalling to US$ 5.1 million (2023: US$5.0 million) was declared as the final dividend for 2023. This dividend was paid to the shareholders on 15 May 2024 (2023: 9 May 2023), followed by a further dividend of 1.3 cents (2023: 1.3 cents) per share which was declared as interim dividend for 2024 totalling US$ 2.6 million (2023: US$2.5 million) and paid on 3 October 2024 (2023: 3 October 2023). The total dividend paid is US$ 7.7 million (2023: US$7.6 million). In respect of the year ended 31 December 2024, the Directors propose that a final dividend of 1.3 cents (2023: 2.6 cents) per share be paid to shareholders on 15 May 2025 (2023: 15 May 2024). This final dividend has not been included as a liability in these Consolidated Financial Statements. The proposed final dividend is payable to all shareholders on the Register of Members on 22 April 2025 (2023: 19 April 2024). The total estimated final dividend to be paid is ~US$2.6 million (2023: US$5.0 million). The payment of this final dividend will not have any tax consequences for the Group.
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
10. Property, plant and equipment
Cost
Drilling rigs
Heavy mining equipment
Associated Drilling & mining equipment
Vehicles and trucks
Camp and associated equipment
Land & Buildings
Computer software
Leasehold improvements
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
At 1 January 2023
139,370
71,444
31,399
37,786
18,169
-
38
1,654
299,860
Additions
27,061
10,416
11,884
10,491
9,404
-
14
-
69,270
Disposal
(18,189)
-
(1,906)
(1,259)
(531)
-
-
-
(21,884)
At 31 December 2023
148,242
81,860
41,377
47,018
27,043
-
52
1,654
347,246
Additions
35,785
4,350
1,672
9,895
9,906
6,348
20
-
67,976
Disposal
(4,034)
-
(4,328)
(2,029)
(1,865)
-
-
-
(12,256)
At 31 December 2024
179,993
86,210
38,721
54,884
35,084
6,348
72
1,654
402,966
Accumulated Depreciation
At 1 January 2023
79,788
16,776
6,743
15,696
8,088
-
13
97
127,202
Depreciation
10,521
9,302
4,900
4,493
2,595
-
7
-
31,817
Impairment
-
-
-
389
50
-
-
-
439
Disposal
(17,412)
-
(1,783)
(1,157)
(517)
-
-
-
(20,869)
At 31 December 2023
72,897
26,078
9,860
19,421
10,216
-
20
97
138,589
Depreciation
10,573
7,041
6,082
4,716
3,925
231
9
-
32,577
Disposal
(3,754)
-
(4,100)
(1,653)
(1,855)
-
-
-
(11,362)
Impairment
226
907
-
-
1,061
-
-
-
2,194
At 31 December 2024
79,942
34,026
11,842
22,484
13,346
231
29
97
161,997
Carrying amount at:
31 December 2023
75,345
55,782
31,517
27,598
16,828
-
32
1,557
208,657
31 December 2024
100,051
52,184
26,879
32,400
21,738
6,117
43
1,557
240,969
CAPITAL LIMITED Notes to the Condensed Consolidated Interim Financial Statements (continued)
For the year ended 31 December 2024
10. Property, plant and equipment (continued)
The Group's property plant and equipment includes assets not yet commissioned totalling US$45.0 million (2023: US$41.8 million). The assets will be depreciated once commissioned and available for use.
Not reflected in the Cash Flow are US$28.7 million (2023: US$ 15.8 million) asset finance facilities obtained from Epiroc, Caterpillar, Sandvik, Byington Family Trust and Northrim Bank.
11. Leases (Group as lessee)
Details pertaining to leasing arrangements, where the Group is lessee are presented below:
Land & Buildings
Machinery
Total
Right of use assets
US$'000
US$'000
US$'000
At 1 January 2023
3,565
13,087
16,652
Additions
2,830
17,712
20,542
Depreciation
(1,290)
(6,220)
(7,510)
At 31 December 2023
5,105
24,579
29,684
Additions
778
15,391
16,169
Depreciation
(1,618)
(10,407)
(12,025)
Impairment
-
(1,766)
(1,766)
At 31 December 2024
4,265
27,797
32,062
Lease liabilities
At 1 January 2023
3,396
12,871
16,267
Additions
2,830
16,506
19,336
Interest expense
331
1,750
2,081
Lease payments
(1,373)
(6,861)
(8,234)
At 31 December 2023
5,184
24,266
29,450
Additions
777
13,567
14,344
Interest expense
422
2,645
3,067
Lease payments
(1,822)
(11,253)
(13,075)
At At 31 December 2024
4,561
29,225
33,786
The weighted average incremental borrowing rate applied to lease liabilities during the period was 10% (2023: 10%).
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
2024
2023
US$'000
US$'000
12.
Trade receivables
Trade receivables
64,762
54,264
Less: allowance for credit losses
(4,536)
(4,697)
Total trade receivables
60,226
49,567
Trade receivables have credit periods of between 30 to 45 days. The ageing of trade receivables is detailed below:
Current
43,627
26,139
Past due 1 - 30 days
6,293
6,583
Past due 31 - 60 days
5,746
12,913
Past due 61 - 90 days
1,330
1,876
Past due over 90 days
7,766
6,753
64,762
54,264
The expected loss rates have been based on current and forward-looking information on micro and macroeconomic factors affecting the Group's customers. The Group has identified the metals and mining sector's credit loss probability rates as the key macroeconomic factor in countries where the Group operates.
The lifetime expected loss provision for trade receivables is as follows:
31 December 2024
Current
More than 30 days past due
More than 60 days past due
More than 90 days past due
Total
US$'000
US$'000
US$'000
US$'000
US$'000
Expected loss rate
0.21%
0.32%
0.08%
49.44%
7.12%
Gross carrying amount
43,627
6,293
5,746
9,096
64,762
Loss provision
124
20
8
4,384
4,536
Movements in the impairment allowance for trade receivables are as follows:
2024
2023
US$'000
US$'000
Opening provision for impairment of trade receivables
4,697
2,981
Increase during the year
97
1,934
Receivables written off during the year as uncollectible
(258)
(218)
At 31 December
4,536
4,697
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
2024
2023
US$'000
US$'000
13.
Other receivables
Prepayments
10,474
7,529
Capitalised contract costs
7,082
3,783
VAT recoverable
6,410
7,561
Amounts due from non-controlling interest
5,685
5,536
Accounts receivable - Sundry
2,948
4,025
Prepayment for fixed assets
3,970
5,318
Others
264
92
36,834
33,844
Current
26,044
24,055
Non-current
10,790
9,789
36,834
33,844
14.
Loans and borrowings
Loans and borrowings consist of:
(a) US$75 million revolving credit facility ("RCF") provided by Standard Bank (Mauritius) Limited and Nedbank Limited
The Company entered into a revolving credit facility agreement on 28 March 2023 as borrower together with Standard Bank (Mauritius) Limited and Nedbank Limited (acting through its Nedbank Corporate and Investment banking division) as lenders and arrangers, with Nedbank acting as agent and security agent to borrow a revolving credit facility for an aggregate amount of US$50 million with the Company being able to exercise an accordion option to request an increase of the facility under the terms and conditions of the Facility Agreement. The full accordion of US$25m was exercised and completed 26 April 2024. The total available amount of the facility is currently US$75m. The interest rate on the RCF is the prevailing three-month Secured Overnight Financing Rate (SOFR, payable in arrears) plus a margin of 5.5%, and an annual commitment fee of 1.925% per annum is charged on any undrawn balances. The amount utilised on the RCF was US$60 million as at 31 December 2024 (2023: US$45 million).
Under the terms of the RCF, the group is required to comply with certain financial covenants relating to:
· Interest coverage
· Gross debt to EBITDA ratio
· Debt to equity ratio
· Tangible net worth
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
14.
Loans and borrowings (continued)
In addition, CAPD (Mauritius) Limited is also required to comply with the Total Tangible Net Worth covenant.
Security for the revolving credit facility comprise various pledges over the shares and claims of the Group's entities in Tanzania together with a debenture over the rigs in Tanzania and the assignment of material contracts and their collection accounts in each of Egypt, Tanzania and Mali.
As at the reporting date and during the period under review, the Group has complied with all covenants attached to the loan facilities.
(b) US$40.5 million term loan provided by Macquarie Bank Limited (London Branch)
On 15 September 2022, the Group refinanced the senior secured, asset backed term loan facility with Macquarie Bank Limited. The term of the loan is three years repayable in quarterly instalments with an interest rate on the facility of the prevailing three-month SOFR plus a margin of 6.5% per annum (payable quarterly in arrears). The loan is secured over certain assets owned by the Group and currently located in Egypt together with guarantees provided by Capital Limited, Capital Drilling Egypt LLC. The Group drew an additional US$8.0 million in 2023. As at 31 December 2024, the amount outstanding on the term loan was US$13.1 million (2023: US$32 million). During the year under review, the Group has complied with all covenants (same as RCF) attached to the term loan.
(c) Epiroc Financial Solutions AB credit agreements
The Group has a number of credit agreements with Epiroc, drawn down against the purchase of rigs. The term of the agreements is four years repayable in 46 monthly instalments. The rate of interest on most of the agreements is three-month SOFR plus a margin of 4.8%, with a fixed rate of interest of the remaining agreements of 8.5% and 9.5%. As at 31 December 2024, the total drawn under these credit agreements was US$24 million (2023: US$16.5 million). No covenants are attached to this facility.
(d) US$8.5 million term loan facility with Sandvik Financial Services AB (PUBL)
The Group has term loan facility agreement with Sandvik Financial Services AB (PUBL). The facility is for the purchase of equipment from Sandvik AB, available in not more than four tranches. Interest is payable quarterly in arrears at 5.45% per annum on the drawn amount. As at 31 December 2024 the balance outstanding was US$2.5 million (2023: US$4.2 million) and the facility is no longer available to be drawn. Additionally, the Group entered into a further US$10 million facility agreement on 23 October 2023. The rate of interest on this agreement is fixed at 8.15%. As at 31 December 2024, the balance outstanding was US$6.3 million (2023: Undrawn). No covenants are attached to these facilities.
(e) US$5.0 million facility with Caterpillar Financial Services
The Group entered into a US$5 million facility agreement with Caterpillar Financial Services Corporation on 25 July 2023. The rate of interest on this agreement is three-month SOFR plus a margin of 5.25%. The term of the agreement is 2 years repayable in 8 quarterly instalments. All repayments can be subsequently redrawn. As at 31 December 2024, the balance outstanding was US$3.2 million (2023: US$ 5.0 million). During the year under review, the Group has complied with all covenants (same as RCF) attached to the facility.
(f) US$3.7m Mortgage with Byington Family Trust
The Group entered into a US$3.7m mortgage with Byington Family Trust on 8 January 2024. The property in Elko serves as collateral for the mortgage. The rate of interest is fixed at 7.50% until maturity on 31 December 2034. As at 31 December 2024, the balance outstanding was US$3.6 million. No covenants are attached to this facility.
CAPITAL LIMITED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
14.
Loans and borrowings (continued)
(g) US$1.6m Business Loan Facility Agreement with Northrim Bank
The Group entered into a US$1.6m Loan Facility Agreement with Northrim Bank on 27 August 2024. The property in Fairbanks, Alaska serves as collateral for this loan. The rate of interest is three-month SOFR plus a margin of 3%. As at 31 December 2024, the balance outstanding was US$0.7 million During the period under review, the Group has complied with all covenants (same as RCF) attached to the facility.
2024
2023
US$'000
US$'000
Bank loans
76,388
78,385
Supplier credit facilities
36,288
25,813
Vendor financed mortgage
3,599
-
116,275
104,198
Less: Unamortised debt arrangement costs
(1,091)
(1,625)
Total loans and borrowings
115,184
102,573
Current
28,259
27,052
Non-current
86,925
75,521
Total loans and borrowings
115,184
102,573
15.
Cash generated from operations
2024
2023
US$'000
US$'000
Profit before taxation
34,267
50,334
Adjusted for:
- Depreciation, amortisation and impairments
34,771
32,256
- ERP costs expensed
676
-
- Share of loss in associate
387
-
- Loss on disposals
594
946
- Depreciation of right-of-use assets
13,791
7,510
- Share-based payment
539
3,540
- Fair value loss/(gain) on financial assets
(12,097)
(2,914)
- Interest income
(38)
(65)
- Finance costs
16,741
13,002
- Other non-cash items
339
34
- Unrealised foreign exchange (gain) / loss on foreign cash held
1,623
(246)
- (Decrease)/Increase in expected credit loss provision
(160)
1,716
- Bad debts written off
258
218
Operating profit before working capital changes
91,691
106,331
Adjustments for working capital changes:
- Increase in inventories
(375)
(3,227)
- Increase in trade and other receivables
(13,671)
(15,568)
- Increase in trade and other payables
12,771
7,146
- Decrease in provisions
(283)
(2,150)
90,133
92,532
CAPITAL LIMITED APPENDIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (UNAUDITED)
The Group presents various Alternative Performance Measures (APMs) as management believes that these are useful for users of the financial statements in helping to provide a balanced view of, and relevant information on, the Group's financial performance in the year. The following terms and alternative performance measures are used in the half year results release for the year ended 31 December 2024.
ARPOR
Average revenue per operating rig
Operating profit (pre-exceptional items)
Earnings before interest, taxes, fair value gain/loss on financial assets and exceptional items
EBITDA
Earnings before interest, taxes, depreciation, amortization, fair value gain/loss on financial assets and exceptional items.
EBITDA (adjusted for IFRS 16 leases)
EBITDA net of cash cost of the IFRS 16 leases
NPAT
Net Profit After Tax
NPAT (excluding exceptional items and investment gains/(loss)
Net profit after tax before fair value gain/loss on investments and exceptionals
EPS (excluding exceptional items and investment gains/(loss)
Net profit after tax before fair value gain/loss and exceptionals over weighted average number of ordinary shares
NET CASH (DEBT)
Cash and cash equivalents less short term and long-term debt
Reconciliation of alternative performance measures to the financial statements:
2024
2023
US$'000
US$'000
ARPOR can be reconciled from the financial statements as per the below:
Revenue per financial statements (US$)
348,000
318,424
Non-drilling revenue (US$)
(123,671)
(114,249)
Revenue used in the calculation of ARPOR (US$)
224,329
204,175
Monthly Average active operating Rigs
92
92
Monthly Average operating Rigs
126
125
ARPOR (rounded to nearest US$10,000)
204
186
EBITDA can be reconciled from the financial statements as per the below:
US$'000
US$'000
Profit for the year
18,318
38,530
Depreciation
48,562
39,765
Taxation
15,949
11,804
Interest income
(38)
(65)
Finance charges
16,741
13,002
Share of loss in associates
387
-
Fair value adjustments on financial assets
(12,097)
(2,989)
EBITDA
87,822
100,047
CAPITAL LIMITED APPENDIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (UNAUDITED)
2024
2023
US$'000
US$'000
Operating profit (EBIT)
39,260
60,282
Depreciation, amortisation and impairments
48,562
39,765
EBITDA
87,822
100,047
Adjusted EBITDA can be reconciled from the financial statements as per the below:
Operating profit (EBIT)
39,260
60,282
Depreciation, amortisation and impairments
48,562
39,765
Cash cost of IFRS 16 leases
(13,075)
(8,234)
Exceptional items (ERP costs and provision for VAT receivables)
5,206
-
Adjusted EBITDA
79,953
91,813
Adjusted EBITDA Margin
23.0%
28.8%
Operating Profit (excluding exceptional items) can be reconciled from the financial statements as per the below:
Operating Profit
39,260
60,282
Exceptional items (ERP costs, provision for VAT receivables and impairment of laboratory assets)
Adjusted cash from operations can be reconciled from the financial statements as per the below:
Cash generated from operations
90,133
92,532
Cash cost of IFRS 16 leases
(13,075)
(8,234)
Adjusted Cash from Operations
77,058
84,298
Net cash (debt) can be reconciled from the financial statements as per the below:
Cash and cash equivalents
40,526
34,366
Long-term borrowings1
(87,268)
(76,273)
Current portion of long-term borrowings1
(29,007)
(27,925)
Net (debt)/ cash
(75,749)
(69,832)
1 Excludes the unamortised debt arrangement costs
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