14th Mar 2019 09:31
LONDON (Alliance News) - Capital Drilling Ltd on Thursday said its annual profit increased as a result of continued implementation of its savings initiatives.
Shares in Capital Drilling were up 4.5% at 52.25 pence on Thursday morning.
Capital Drilling provides exploration and production drilling solutions for the minerals industry, focusing on African markets, including resource development and underground drilling.
The company posted a pretax profit of USD12.6 million, up 30% from USD9.7 million.
Revenue, however, declined 2.8% to USD116.0 million from USD119.4 million due to lower utilisation in the first half of the year while idle rigs were redeployed to west Africa.
Cost of sales was a significant factor, falling to USD70.7 million or 61% of revenue from USD80.2 million or 67% of revenue. This resulted in a gross profit of USD45.3 million compared to USD39.3 million, an increase of 15% year-to-year.
Capital Drilling said the improved profit was a result of its savings initiatives, which were implemented 2017 and continued into 2018.
The company declared a final dividend of 1.5 cents in respect of 2018, up from 1.2 cents the year before. Added to the dividends already declared, the total for the year is 3.3 cents per share versus 2.7 cents in 2017.
Capital Drilling Executive Chair Jamie Boyton said: "The outlook for 2019 remains encouraging, albeit amidst mixed market drivers, specifically supportive commodity prices, in particular gold which represents circa 90% of group revenue, offset by continued weak capital markets that impacted the funding for exploration activity. Our significantly increased presence in the key West African markets provides optimism for further contract wins over the year ahead.
"We believe that the careful investments we have made in 2018, both in terms of infrastructure as well as continually maintaining a high quality and young fleet, combined with our strong focus on cost discipline and return metrics on our asset base, will reap further benefits to all of our stakeholders over the course of the current financial year."
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