REG - Capital Limited - Full Year Financial Results
27/03/2025 07:15
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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%)
Capex(5) 67.2 69.0 (2.6%)
Net Debt(1) 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) 23.0% 28.8%
Operating Profit Margin 11.3% 18.9%
Operating Profit Margin (excluding exceptional items)(4) 13.6% 18.9%
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 ($186,000); and
· Rig count increased from 127 to 130 through FY 2024, net of
depletion.
FY 2024 FY 2023 vs
FY 2023
Closing fleet size 130 127 2.6%
Average Fleet 126 125 0.8%
Fleet utilisation (%) 73% 73% (0.8%)
Average utilised rigs 92 92 0.0%
ARPOR(1)($) $204,000 $186,000 9.7%
Surveying revenue ($m) 5.4 3.7 45%
Total Drilling and associated revenue(2) ($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 PhotonAssay(TM) 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 PhotonAssay(TM) 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 PhotonAssay(TM) 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
(http://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 27(th) March 2025, where questions can be submitted through the
platform.
The webcast presentation link:
Issuer Services | London Stock Exchange | Capital Limited FY 2024 Results
(https://sparklive.lseg.com/CAPITALLIMITED/events/8ff99f79-6615-4f6d-93ad-7b6f67427d44/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 (http://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 (mailto: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 17,315 36,737
(US$'000)
Weighted average number of ordinary shares for the purposes of basic earnings 195,112,329 192,451,358
per share
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 17,315 36,737
are the same as those used in the equivalent basic earnings per share
measures, as outlined above. ($)
Weighted average number of ordinary shares used in the calculation of basic 195,112,329 192,451,358
earnings per share
- Dilutive share options (#) 465,154 2,801,729
Weighted average number of ordinary shares used in the calculation of diluted 195,577,483 195,253,087
earnings per share
Diluted earnings per share (cents) 8.85 18.82
( )
( )
( )
( )
( )
( )
( )
( )
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
( )
9. Dividends
During the 12 months ended 31 December 2024, a dividend of 2.6 cents (2023:
2.6 cents) per ordinary share, totalling to US$ 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$5.0 million). The payment of
this final dividend will not have any tax consequences for the Group.
( )
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2024
10. Property, plant and equipment
Cost Associated Drilling & mining equipment
Camp and associated equipment
Heavy mining equipment Vehicles and trucks Land & Buildings Computer software Leasehold improvements
Drilling rigs Total
US$'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$'000
12. Trade receivables
Trade receivables 64,762 54,264
Less: allowance for credit losses (4,536) (4,697)
Total trade receivables 60,226 49,567
Trade receivables have credit periods of between 30 to 45 days. The ageing of
trade receivables is detailed below:
Current 43,627 26,139
Past due 1 - 30 days 6,293 6,583
Past due 31 - 60 days 5,746 12,913
Past due 61 - 90 days 1,330 1,876
Past due over 90 days 7,766 6,753
64,762 54,264
The expected loss rates have been based on current and forward-looking
information on micro and macroeconomic factors affecting the Group's
customers. The Group has identified the metals and mining sector's credit loss
probability rates as the key macroeconomic factor in countries where the Group
operates.
The lifetime expected loss provision for trade receivables is as follows:
More than More than More than
30 days 60 days 90 days
31 December 2024 Current past due past due past due Total
US$'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 8,032 -
laboratory assets)
Operating Profit (excluding exceptional items) 47,292 60,282
Operating Profit margin (excluding exceptional items) 13.6% 18.9%
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 borrowings(1) (87,268) (76,273)
Current portion of long-term borrowings(1) (29,007) (27,925)
Net (debt)/ cash (75,749) (69,832)
(1 ) Excludes the unamortised debt arrangement costs
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