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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Capital Limited | LSE:CAPD | London | Ordinary Share | BMG022411000 | COMM SHS USD0.0001 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.50 | 0.51% | 98.00 | 97.40 | 99.00 | 98.00 | 98.00 | 98.00 | 38,532 | 10:42:54 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil And Gas Field Expl Svcs | 318.42M | 36.74M | 0.1897 | 5.17 | 189.82M |
From Apr 2019 to Apr 2024
TIDMCAPD
RNS Number : 2455O
Capital Drilling Limited
17 August 2017
FOR IMMEDIATE RELEASE 17 August 2017
Capital Drilling Limited
("Capital Drilling", the "Group" or the "Company")
Half-year Results
For the period ended 30 June 2017 and Interim Dividend
Capital Drilling Limited (CAPD:LN), a leading drilling solutions company focused on emerging and developing markets, today announces half year results for the period ended 30 June 2017.
HALF YEAR RESULTS FOR THE PERIODED 30 JUNE 2017*
Hot Features
Premium
H1 2017 H1 2016
-------- --------
Average Fleet Size (No. of
drill rigs) 93 94
Fleet Utilisation (%) 56 40
ARPOR ($) 191,000 175,000
Capex ($ m) 4.2 4.1
Revenue ($ m) 62.3 41.7
EBITDA(1) ($ m) 11.6 7.3
EBIT(1) ($ m) 5.2 0.2
Net Profit (Loss) After Tax
($ m) 2.6 (0.8)
Cash From Operations ($ m) 13.1 7.7
Earnings (loss) per Share
Basic (cents) 1.9 (0.6)
Diluted (cents) 1.9 (0.6)
Interim Dividend per Share
(cents) 0.5 1.5
Net Asset Value per Share(1)
(cents) 50.3 54.5
Return on Capital Employed
(%)** 5.1 (6.4)
Return on Total Assets (%)** 3.6 (5.1)
Net Cash(1) ($ m) 3.3 7.0
Net Cash/Equity (%) 4.9 9.5
*All amounts are in USD unless otherwise stated
** Twelve months rolling average
(1) EBDITA, EBIT, Net Asset Value per share and Net Cash are non-IFRS financial measures, and should not be used in isolation or as a substitute for Capital Drilling Limited financial results presented in accordance with IFRS. For definitions and reconciliations of these measurements to the most directly comparable financial calculated and presented in accordance with IFRS, please refer 'APPIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES'.
Financial Overview
-- First half revenue of $62.3 million, 49% higher than H1 2016 ($41.7 million) and 21% higher than H2 2016 ($51.6 million)
-- Continued strength in cash generated from operations of $13.1 million, 70% higher than H1 2016 of $7.7 million (H2 2016: $4.7 million)
-- Operating cash flow margin of 21% for H1 2017, compared to 18.6% for H1 2016 (H2 2016: 9.1%)
-- Net profit after tax of $2.6 million, representing a return to profitability for the Group
-- Cash reserves increased to $18.4 million at 30 June 2017 from $12.7 million at 31 December 2016
-- Net cash of $3.3 million compared to $0.6 million at 31 December 2016
-- Final dividend in relation to the 2016 financial year of $1.4 million paid in May 2017 (H1 2016: $3.4 million)
-- Interim dividend of 0.5 cent per share to be paid on 6(th) October 2017 (2016: Interim dividend of 1.5 cents per share)
Operational and Strategic Review
-- Exploration contracts awarded in H1 2017 include: - Acacia Mining (Tanzania): 2 rigs, program completed over Q1 - Aton Resources (Egypt): 1 rig, program completed over Q1 - Aura Energy (Mauritania): 1 rig, program commences in Q3 - Algold (Mauritania): 2 rigs, commenced February (Phase 2)
-- Extended through Phase 3 program
-- Phase 4 program due to commence late Q3 (expanding to 3 rigs)
- MRL (Mauritania): 1 rig, program completed over Q2 - OreCorp Limited (Mauritania); 1 rig, program completed over Q2 - Thani Stratex (Egypt): 1 rig, Phase 1 completed Q1, Phase 2 completed Q2
-- Phase 3 program due to commence in Q4 (1 rig)
-- Exploration contract wins in Capital Drilling's existing geographic footprint, allowing the Group to benefit from pre-existing infrastructure.
-- Production and mine site contracts awarded in H1 2017 include: - Alecto Minerals (Botswana): 2 rigs, program completed July - AngloGold Ashanti (Tanzania): 2 rigs added to the existing production contract
- Kinross Gold (Mauritania): 2 rigs, through the award of a 3-year Grade Control contract at the Tasiast Mine
-- Commenced drilling in Q2 2017
- Resolute Mining (Mali): 2 new rigs, through the award of a 3-year underground drilling contract at the Syama Mine
-- Commencing drilling in Q3 2017
-- Additional production contract wins adding greater depth to the Group's long term contracts -- H1 utilisation of 56%, improved from 40% in H1 2016, on an average fleet size of 93 rigs -- H1 Average Revenue per Operating Rig (ARPOR) increased to $191,000 (H1 2016: $175,000) -- Solid performance across the major production contracts:
- Rig replacements for 3 rigs at North Mara (Acacia) and Sukari (Centamin) commissioned in Q1 2017
- An additional 2 rigs mobilised to Geita (AngloGold Ashanti) in H2 2017 -- Improved performance in exploration over Q2 2017
-- Continued focus on capital discipline with H1 CAPEX of $4.2 million, substantially below previous expectations
Health & Safety
-- Mauritania (Algold Exploration) achieved 1 year LTI free in April 2017 -- Previously announced world class achievements: - Tanzania (Mwanza) achieved 9 Years LTI free in January 2017 - Mauritania (Tasiast Project) achieved 6 years LTI free in February 2017
Financials
Statement of H1 FY Statement of Cash Flow H1 H1
Financial Position 2017 2016 Data 2017 2016
Data
--------------------- ----------------------------------
$m $m $m $m
--------------------- ------- ------ ---------------------------------- ------- -------
Non-Current Operating cash flows before
Assets 44.9 45.8 working capital changes 12.1 8.0
--------------------- ------- ------ ---------------------------------- ------- -------
Adjustments for working
Current Assets 58.2 54.8 capital changes 1.0 (0.3)
--------------------- ------- ------ ---------------------------------- ------- -------
Total Assets 103.1 100.6 Cash from operations 13.1 7.7
--------------------- ------- ------ ---------------------------------- ------- -------
Non-Current
Liabilities - 10.0 Finance charges (0.3) (0.1)
--------------------- ------- ------ ---------------------------------- ------- -------
Current Liabilities 35.1 23.8 Taxation (1.4) (1.3)
--------------------- ------- ------ ---------------------------------- ------- -------
Net cash generated from
Total Liabilities 35.1 33.8 operating activities 11.4 6.4
--------------------- ------- ------ ---------------------------------- ------- -------
Equity 68.0 66.8 Investing Activities
--------------------- ------- ------ ---------------------------------- ------- -------
Net cash used in investing
Cash 18.4 12.7 activities (7.1) (3.8)
--------------------- ------- ------ ---------------------------------- ------- -------
Debt 15.1 12.1 Financing Activities
--------------------- ------- ------ ---------------------------------- ------- -------
Net Cash 3.3 0.6 Movement in long term liabilities 3.0 2.0
--------------------- ------- ------ ---------------------------------- ------- -------
Dividend paid (1.4) (3.4)
---------------------------------- ------- -------
Net cash used in financing
activities 1.6 (1.4)
---------------------------------- ------- -------
Net increase (decrease)
in cash 5.9 1.2
---------------------------------- ------- -------
Opening cash balance 12.7 13.4
---------------------------------- ------- -------
FX on cash (0.2) (0.4)
---------------------------------- ------- -------
Closing cash balance 18.4 14.2
---------------------------------- ------- -------
Outlook
-- Trading conditions continue to be supportive, continued strength in commodity prices & capital markets activities
-- Economic indicators remain favourable, driving recent strong performance in industrial metal prices, particularly copper
-- Increased levels of activity in exploration drilling, across both the juniors and more recently in budget allocations from mining companies
-- Recent contract awards add to the Group's portfolio of long term production and mine site based contracts
-- Legislative developments in Tanzania contribute uncertainty to the outlook and will continue to be monitored closely
-- Enhanced discipline in capital expenditure and solid cash flows from operations underpin the Group's strong balance sheet; advanced negotiations are underway for debt refinance, with two credit approvals received
In view of a conclusion of drilling activities in Serbia, four months ahead of expectations, and a slight easing in delineation drilling activities in Tanzania, the Group now guides for full year revenue at the lower end of previous revenue guidance of $120 million to $130 million. Despite the more cautious revenue guidance we continue to expect profitability in line with current market estimates. Enhanced working capital management and discipline around Group CAPEX has driven a materially stronger than anticipated performance in cash generation over H1 2017. As a result of asset redeployment within the Group we expect this capital disciple to continue to be a strong contributor over the course of 2017.
Commenting on the results, Jamie Boyton, Executive Chairman of Capital Drilling, said:
"Capital Drilling's improved performance, which saw a return to profitability in the first half of 2017, was driven primarily by increasing rig utilisation, with H1 2017 utilisation of 56% representing a 40% increase on H1 2016. The improved utilisation, coupled with a 9% increase in ARPOR, drove revenue growth of 49% over the first half of 2016.
The improved revenue and profit for the Group reflects a solid performance across the core contracts, underpinned by the improved market conditions which started firming in late Q2 2016. While the initial uplift in activity was associated with predominantly gold and speciality metals companies, this has broadened over H1 2017 with an improving outlook in industrial metals, particularly copper. Capital markets activities continue to provide solid support to activity levels underpinning expenditure by junior miners and explorers, while we have seen the initial evidence of increased exploration and development expenditure from the established mining companies.
We are particularly encouraged by the award of two new long term production / mine site contracts, specifically grade control drilling at the Tasiast Mine in Mauritania and underground drilling at the Syama Mine in Mali. The addition of these two contracts, both at existing Capital Drilling sites, adds depth to the Group's portfolio of long term contracts and demonstrate Capital Drilling's success in expanding our range of drilling services to our customers.
Recent legislative changes in Tanzania are concerning and clearly creating uncertainty. While we expect a reduction in delineation drilling at the Geita Gold Mine in H2 2017, there has been no impact to activity levels on the Group's production drilling contracts at the North Mara and Geita Gold mines. The uncertainty is however having a material impact on exploration activity within the country and is likely to continue to impact investment decisions for the foreseeable future. The lack of exploration activity is consistent with Capital Drilling's guidance. As we have previously stated we will continue to monitor developments closely and keep our investors updated on any further developments.
We remain in excellent financial health, generating solid free cash flow over the period. This strong cash generation, coupled with enhanced discipline around capital expenditure, has seen the Group end the period with net cash of $3.3 million. As consequence of this strong performance we have today declared an interim dividend of 0.5cps for the H1 2017 period, payable on October 6, 2017."
Capital Drilling will host a conference call on Thursday 17 August at 9am (London, UK time) to update investors and analysts on its results. Participants may join the call by dialling one of the following numbers, approximately 10 minutes before the start of the call. A copy of the Company's presentation will be available on www.capdrill.com.
UK Toll-free Dial In: 0808 237 0040
International Dial In Numbers: http://events.arkadin.com/ev/docs/FEL_Events_International_Access_List.pdf
Participant PIN Code: 39398888#
For further information, please visit Capital Drilling's website www.capdrill.com or contact:
Capital Drilling Limited +230 464 3250 Jamie Boyton, Executive Chairman investor@capdrill.com
Dewald van Tonder, Chief Financial Officer
finnCap Ltd +44 20 7220 0500
Christopher Raggett, Corporate Finance
Emily Morris/Simon Johnson, Corporate Broking
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Buchanan +44 20 7466 5000
Bobby Morse capitaldrilling@buchanan.uk.com
Gemma Mostyn-Owen
About Capital Drilling
Capital Drilling provides specialised drilling services to mineral exploration and mining companies in emerging and developing markets, for exploration, development and production stage projects. The Company currently owns and operates a fleet of 93 drilling rigs with established operations in Botswana, Egypt, Ethiopia, Kenya, Mali, Mauritania, Serbia and Tanzania. The Group's corporate headquarters is in Mauritius.
Cautionary note regarding forward looking statements
Certain information contained in this report, including any information on Capital Drilling's plans or future financial or operating performance and other statements that express management's expectations, or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties, which remain unchanged from those disclosed in our Prospectus. Capital Drilling cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Capital Drilling to be materially different than the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of commodities and project execution delays, many of which are beyond the control of Capital Drilling. Nothing in the report should be construed as either an offer to sell or a solicitation to buy or sell Capital Drilling securities.
INDEPENT REVIEW REPORT TO CAPITAL DRILLING LIMITED
We have been engaged by the company to review the condensed consolidated set of interim financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the consolidated condensed statements of comprehensive income, financial position, changes in equity, the cash flow statement and related notes 8 to 21. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the International Auditing and Assurance Standards Board ("IAASB"). Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the "IASB"). The condensed consolidated set of interim financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the IASB.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed consolidated set of interim financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by Independent Auditor of the Entity" issued by the IAASB. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated set of interim financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as issued by the IASB and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte & Touche
Registered Auditor
Per: H. Loonat
Partner
Johannesburg, South Africa
17 August 2017
Deloitte & Buildings 1 and 2
Touche Deloitte Place
Registered The Woodlands
Auditors Woodlands Drive
Audit & Assurance Woodmead Sandton
- Gauteng Private Bag X6
Gallo Manor 2052
www. deloitte.com South Africa
Docex 10 Johannesburg
CAPITAL DRILLING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 30 June 2017
Six months ended
30 June 30 June
Notes 2017 2016
------ ------------- -------------
$ $
Revenue 62,332,410 41,714,801
Cost of sales (44,898,001) (28,982,615)
------------- -------------
Gross profit 17,434,409 12,732,186
Administration costs (5,808,075) (5,402,327)
Depreciation (6,392,131) (7,089,799)
------------- -------------
Profit from operations 5,234,203 240,060
Share of income from associate 5,213 9,587
Interest income 137,264 6,763
Finance charges (543,557) (253,477)
Realised (loss) gain on
available-for-sale shares (183,495) 90,202
Fair value adjustment on
financial assets through
profit and loss - Share
Options (123,989) 655,224
------------- -------------
Profit before taxation 4,525,639 748,359
Taxation 3 (1,945,364) (1,588,416)
------------- -------------
Profit (Loss) for the period 2,580,275 (840,057)
============= =============
Other comprehensive (loss)
income:
Other comprehensive (loss)
income to be reclassified
to profit or loss in subsequent
periods:
Exchange differences on
translation of foreign operations 38,454 35,665
Share of exchange differences
on translation of foreign
operations from associate (25,932) (35,851)
Net (loss) gain on revaluation
on available-for-sale financial
assets (369,336) 870,807
Cumulative loss (gain) reclassified
to profit and loss on sale
of available-for-sale financial
assets 183,495 (90,202)
------------- -------------
Total other comprehensive
(loss) income for the period (173,319) 780,419
------------- -------------
Total comprehensive income
(loss) for the period 2,406,956 (59,638)
============= =============
Profit (Loss) per share:
Basic (cents per share) 4 1.9 (0.6)
============= =============
Diluted (cents per share) 4 1.9 (0.6)
============= =============
CAPITAL DRILLING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 2017
30 June 31 December
Notes 2017 2016
-------------- ---------------- ----------------
$ $
ASSETS
Non-current assets
Property, plant and equipment 6 42,428,260 45,129,741
Investment in associate 7 2,397,691 467,933
Deferred taxation 84,245 205,706
---------------- ----------------
Total non-current assets 44,910,196 45,803,380
---------------- ----------------
Current assets
Inventory 19,865,585 19,361,181
Trade and other receivables 13,644,238 15,591,138
Prepaid expenses and other
assets 3,511,129 5,240,278
Taxation 539,295 549,435
Investments 2,204,427 1,316,243
Cash and cash equivalents 18,422,658 12,728,555
---------------- ----------------
Total current assets 58,187,332 54,786,830
---------------- ----------------
Total assets 103,097,528 100,590,210
================ ================
EQUITY AND LIABILITIES
Equity
Share capital 8 13,524 13,490
Share premium 8 21,933,772 21,697,470
Equity-settled employee
benefits reserve 323,861 441,883
Foreign currency translation
reserve (25,932) (38,454)
Investments revaluation
reserve (148,921) 36,920
Retained earnings 45,867,040 44,639,236
---------------- ----------------
Total equity 67,963,344 66,790,545
---------------- ----------------
Non-current liabilities
Long-term liabilities 9 - 10,000,000
---------------- ----------------
Total non-current liabilities - 10,000,000
---------------- ----------------
Current liabilities
Trade and other payables 16,235,501 18,364,357
Taxation 3,774,203 3,340,183
Current portion of long-term
liabilities 9 15,124,480 2,095,125
---------------- ----------------
Total current liabilities 35,134,184 23,799,665
---------------- ----------------
Total equity and liabilities 103,097,528 100,590,210
================ ================
CAPITAL DRILLING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
30 June 2017
Reserves
---------------------------------------------------------
Equity-settled Foreign
employee currency Investments
Share Share Retained benefits translation revaluation
capital premium earnings reserve reserve reserve Total equity
----------------------- -------------- -------------- ---------------- --------------------- ---------------- -----------------
$ $ $ $ $ $ $
Balance at
31 December
2015 13,460 21,566,856 54,883,674 282,075 (35,665) (43,550) 76,666,850
Issue of shares 30 130,614 - (130,644) - - -
Recognition
of share-based
payments - - - 185,754 - - 185,754
Total comprehensive
(loss) profit
for the period - - (840,057) - (186) 780,605 (59,638)
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Loss for
- the period - - (840,057) - - - (840,057)
Other comprehensive
income
for the
- period - - - - (186) 780,605 780,419
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Dividends
paid (2.5
cents per
share) - Note
5 - - (3,372,605) - - - (3,372,605)
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Balance at
30 June 2016 13,490 21,697,470 50,671,012 337,185 (35,851) 737,055 73,420,361
================== ============== ============== ================ ===================== ================ =================
Balance at
31 December
2016 13,490 21,697,470 44,639,236 441,883 (38,454) 36,920 66,790,545
Issue of shares 34 236,302 - (236,336) - - -
Recognition
of share-based
payments - - - 118,314 - - 118,314
Total comprehensive
profit (loss)
for the period - - 2,580,275 - 12,522 (185,841) 2,406,956
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Profit
for the
- period - - 2,580,275 - - - 2,580,275
Other comprehensive
(loss)
for the
- period - - - - 12,522 (185,841) (173,319)
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Dividends
paid (1 cents
per share)
- Note 5 - - (1,352,471) - - - (1,352,471)
------------------ -------------- -------------- ---------------- --------------------- ---------------- -----------------
Balance at
30 June 2017 13,524 21,933,772 45,867,040 323,861 (25,932) (148,921) 67,963,344
================== ============== ============== ================ ===================== ================ =================
CAPITAL DRILLING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2017
Six months ended
Reviewed Reviewed
30 June 30 June
Notes 2017 2016
------ ------------ ------------
$ $
Operating activities:
Cash from operations 10 13,130,720 7,743,863
Interest received 137,264 6,763
Finance charges paid 9 (514,202) (147,273)
Taxation paid (1,379,743) (1,250,156)
------------ ------------
Net cash generated from
operating activities 11,374,039 6,353,197
------------ ------------
Investing activities:
Purchase of property, plant
and equipment 6 (4,207,845) (4,099,402)
Proceeds from disposal of
property, plant and equipment 374,938 541,238
Acquisition of available-for-sale
investments (1,752,387) (291,236)
Proceeds on disposal of
available-for-sale investments 370,878 74,250
Investment in associate 7 (1,912,023) -
------------ ------------
Net cash used in investing
activities (7,126,439) (3,775,150)
------------ ------------
Financing activities:
Long-term liabilities raised 9 6,500,000 2,000,000
Long-term liabilities repaid 9 (3,500,000) -
Dividend paid 5 (1,352,471) (3,372,605)
------------ ------------
Net cash used in financing
activities 1,647,529 (1,372,605)
------------ ------------
Net increase in cash and
cash equivalents 5,895,129 1,205,442
Cash and cash equivalents
at the beginning of the
period 12,728,555 13,369,091
Translation of foreign currency
cash and cash equivalent
adjustment (201,026) (399,908)
------------ ------------
Cash and cash equivalents
at the end of the period 18,422,658 14,174,625
============ ============
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
1. Basis of presentation and accounting policies
Preparation of the condensed consolidated interim
financial statements
The condensed consolidated interim financial statements
of Capital Drilling Limited and Subsidiaries ("Capital
Drilling" or the "Group") as at and for the six
months ended 30 June 2017 (the "Interim Financial
Statements") have been prepared in accordance with
International Accounting Standard ("IAS") No. 34,
"Interim Financial Reporting". They should be read
in conjunction with the annual consolidated financial
statements and the notes thereto in the Group's
Annual Report for the year ended 31 December 2016
which have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued
by the International Accounting Standards Board
("IASB").
Accounting policies
The condensed consolidated interim financial statements
have been prepared on the going concern basis under
the historical cost convention, except for certain
financial instruments which are measured at fair
value. The Group has adopted a number of new standards
and interpretations effective on or before 1 January
2017, which were described in note 2 of the consolidated
financial statements for the year ended 31 December
2016. The adoption of these standards and interpretations
did not have a material impact on the condensed
consolidated interim financial statements. The
same accounting policies, presentation and methods
of computation have been followed in these condensed
consolidated financial statements as were applied
in the preparation of the Group's financial statements
for the year ended 31 December 2016, except for
income tax expense which is recognised based on
the management's estimate of the weighted average
effective annual tax rate expected for the full
financial year.
The preparation of financial statements in conformity
with IFRS recognition and measurement principles
requires the use of estimates and assumptions that
affect the reported amounts of assets, liabilities,
revenues and expenses. Management reviews its estimates
on an on-going basis using current available information.
Changes in facts and circumstances may result in
revised estimates and actual results could differ
from those estimates.
2. Operations in the interim period
Capital Drilling Limited is incorporated in Bermuda.
The Group provides drilling services including
but not limited to exploration, development, grade
control and blast hole drilling services to mineral
exploration and mining companies located in emerging
and developing markets. The Group also provides
some equipment rental and information technology
services to mining and mining related companies.
During the six months ended 30 June 2017, the Group
provided drilling services in Botswana, Serbia,
Egypt, Mauritania, Mali and Tanzania.
The seasonality of the Group's operations has no
significant impact on the condensed consolidated
interim financial statements.
3. Taxation
Capital Drilling Limited is incorporated in Bermuda.
No taxation is payable on the results of the Bermuda
business. Taxation for other jurisdictions is calculated
in terms of the legislation and rates prevailing
in the respective jurisdictions.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
3. Taxation (continued)
The Group operates in multiple jurisdictions with
complex legal and tax regulatory environments.
In certain of these jurisdictions, 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 judgment
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.
Due to the tax charge calculations in certain countries
in which the Group operates being based on revenues
instead of profits, the consolidated taxation expense
for the period is not directly linked to profits
and losses.
Six months ended
30 June 30 June
2017 2016
------------
$ $
4. Earnings (Loss) per share
Basic Earnings (loss) per share:
The profit (loss) and weighted
average number of ordinary shares
used in the calculation of basic
earnings (loss) per share are
as follows:
Profit (Loss) for the period
used in the calculation of basic
earnings (loss) per share 2,580,275 (840,057)
============ ============
Weighted average number of ordinary
shares for the purposes of basic
earnings (loss) per share 135,076,227 134,753,539
============ ============
Basic earnings (loss) per share
(cents) 1.9 (0.6)
============ ============
Diluted earnings (loss) per
share:
The profit (loss) used in the
calculations of all diluted
earnings (loss) per share measures
are the same as those used in
the equivalent basic earnings
(loss) per share measures, as
outlined above.
Weighted average number of ordinary
shares used in the calculation
of basic earnings (loss) per
share 135,076,227 134,753,539
- Dilutive share options # 362,813 149,326
------------ ------------
Weighted average number of ordinary
shares used in the calculation
of diluted earnings (loss) per
share 135,439,040 134,902,865
============ ============
Diluted earnings (loss) per
share (cents) 1.9 (0.6)
============ ============
(#) For the purposes of calculating diluted earnings
(loss) per share, the share options of 2.34 million
[2016: 5.35 million] were excluded as they are
anti-dilutive as the exercise price is higher than
the current share price.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
5. Dividends
During the six months ended 30 June 2017, a dividend
of 1.0 cents per ordinary share, totalling $1,352,471
(six months ended 30 June 2016: 2.5 cents per ordinary
share, totalling $3,372,605) was declared and paid.
6. Property, plant and equipment
During the six months ended 30 June 2017, the Group
acquired $4.2 million (2016: $4.1 million) of drilling
rigs and other assets to expand its operations and
for the replacement of existing assets.
The Group disposed of property, plant and equipment
with a net carrying amount of $0.5 million (2016:
$0.6 million) during the period. A loss of $0.1
million (2016: $0.1 million) was incurred on the
disposal of property, plant and equipment.
At the end of each reporting period, the Group reviews
the carrying amounts of its tangible assets to determine
whether there is any indication that those assets
may be impaired. As at 30 June 2017, the market
capitalisation exceeded the net asset value and
there were no other indicators of impairment.
7. Investment in associate
During the six months ended 30 June 2017, the Group
acquired a 33% interest in A2 Global Ventures Inc.
("A2"), as part of a phased strategic investment
to acquire 50% interest before the end of December
2017. A2 is headquartered in Vancouver, Canada,
where it operates a central hub laboratory, supported
by feeder laboratories in Guyana, Myanmar and Sweden,
providing laboratory testing services to the mining
and exploration industries, particularly in emerging
markets. The consideration for the acquisition was
$1.9 million including transaction costs. The investment
in A2, has been accounted on the historical cost
basis as A2's financial information is not available.
Six months ended
30 June 31 December
2017 2016
----------------------------- -----------------------------
$ $
8. Issued capital and share premium
Authorised capital
2,000,000,000 (2016: 2,000,000,000)
ordinary shares of 0.01 cents
(2016: 0.01 cents) each 200,000 200,000
============================= =============================
Issued and fully paid:
135,247,159 (30 June 2016:
134,903,396) ordinary shares
of 0.01 cents (31 December
2016: 0.01 cents) each 13,524 13,490
Share premium:
Balance at the beginning of
the period 21,697,470 21,566,856
Issue of shares 236,302 130,614
----------------------------- -----------------------------
Balance at the end of the
period 21,933,772 21,697,470
============================= =============================
On 4 April 2017, the Company issued 343,763 new
common shares pursuant to the company's employee
incentive scheme. The shares rank pari passu with
the existing common shares.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
9. Long term liabilities
Long term liabilities consist of a $18.6 million
revolving credit facility ("RCF") provided by Standard
Bank (Mauritius) Limited. The RCF has an annual
interest rate of 5.25% above the prevailing three
month US$ LIBOR (payable in arrears), and has an
annual commitment fee of 1% of the undrawn balance.
The facility will stepdown as follow:
* $15 million- 31 August 2017
* $10 million- 30 November 2017
* Zero - 2 February 2018
Security for the Standard Bank (Mauritius) Limited
facility comprise:
* Upward corporate guarantees from Capital Drilling
Egypt (Limited Liability Company), Capital Drilling
(T) Limited and Capital Drilling (Botswana)
Proprietary Limited.
* A negative pledge over the assets of Capital Drilling
Ltd and Capital Drilling Egypt (Limited Liability
Company).
As at the reporting date and during the year under
review, the Group has complied with all covenants
attached to the loan facility.
Six months ended
30 June 31 December
2017 2016
--------------------------------- ---------------------------
$ $
Standard Bank (Mauritius)
Limited
Balance at 1 January 12,095,125 5,096,001
Amounts received during
the period 6,500,000 14,000,000
Interest accrued during
the period 543,557 772,793
Interest paid during the
period (514,202) (773,669)
Principal repayments during
the period (3,500,000) (7,000,000)
--------------------------------- ---------------------------
15,124,480 12,095,125
Less: Current portion included
under current liabilities (15,124,480) (2,095,125)
--------------------------------- ---------------------------
Due after more than
one year - 10,000,000
================================= ===========================
Management is currently negotiating the refinancing
of the above revolving credit facility. The refinancing
would be based on corporate guarantees from Capital
Drilling Egypt (Limited Liability Company) and
Capital Drilling (T) Limited with two separate
financial institutions.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
Six months ended
30 June 30 June
2017 2016
------------ ------------------------
$ $
10. Cash from operations
Profit before taxation 4,525,639 748,359
Adjusted for:
- Depreciation 6,392,131 7,089,799
- Loss on disposal of property,
plant and equipment 142,257 104,340
- Realised loss (gains) on
available-for-sale shares 183,495 (90,202)
- Fair value adjustment on
financial assets through profit
and loss 123,989 (655,224)
- Share based payment expense 118,314 185,754
- Interest income (137,264) (6,763)
- Finance charges 543,557 253,477
- Share of income from associate (5,213) (9,587)
- Unrealised foreign exchange
loss on foreign exchange held 201,026 399,908
------------ ------------------------
Operating profit before working
capital changes 12,087,931 8,019,861
Adjustments for working capital
changes:
- (Increase) decrease in inventory (504,404) 318,090
- Decrease (increase) in trade
and other receivables 1,946,900 (302,896)
- Decrease in prepaid expenses
and other assets 1,729,149 1,607,108
- Decrease in trade and other
payables (2,128,856) (1,898,300)
------------ ------------------------
13,130,720 7,743,863
============ ========================
11. Segmental analysis
Operating segments are identified on the basis
of internal management reports about components
of the Group that are regularly reviewed by the
Chief Executive Officer in order to allocate resources
to the segments and to assess their performance.
Information reported to the Group's Chief Executive
Officer for the purposes of resource allocation
and assessment of segment performance is focused
on the region of operation. For the purposes of
the segmental report, the information on the operating
segments have been aggregated into the principal
regions of operations of the Group. The Group's
reportable segments under IFRS 8 are therefore:
- Africa: Derives revenue from the provision of
drilling services.
- Rest Derives revenue from the provision of
of world: drilling services and related logistic,
equipment rental and information technology
support services.
Information regarding the Group's operating segments
is reported below. At 30 June 2017, management
reviewed the composition of the Group's operating
segments and the allocations of operations to the
reportable segments.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
11. Segmental analysis (continued)
Segment revenue and results:
The following is an analysis of the Group's revenue
and results by reportable segment:
For the six months ended Africa Rest Consolidated
30 June 2017 of World
------------- ---------------------------------- ---------------------------
$ $ $
External revenue 55,188,168 7,144,242 62,332,410
============= ================================== ===========================
Segmental gross profit 19,050,428 (1,616,019) 17,434,409
Administration costs and
depreciation, net of other
income (9,580,383) (1,011,286) (10,591,669)
------------- ---------------------------------- ---------------------------
Segment profit (loss) 9,470,045 (2,627,305) 6,842,470
============= ==================================
Central administration costs
and depreciation, net of
other income (1,608,537)
---------------------------
Profit from operations 5,234,203
Realised (loss) on available-for-sale
shares (183,495)
Fair value adjustment on
financial assets through
profit and loss - Share Options (123,989)
Interest income 137,264
Share of income from associate 5,213
Finance charges (543,557)
---------------------------
Profit before tax 4,525,639
===========================
For the six months ended Africa Rest Consolidated
30 June 2016 of World
------------- ---------------------------------- ---------------------------
$ $ $
External revenue 40,361,890 1,352,911 41,714,801
============= ================================== ===========================
Segmental gross profit 14,128,643 (1,396,457) 12,732,186
Administration costs and
depreciation, net of other
income (10,557,569) (1,208,812) (11,766,381)
------------- ---------------------------------- ---------------------------
Segment profit (loss) 3,571,074 (2,605,269) 965,805
============= ==================================
Central administration costs
and depreciation, net of
other income (725,745)
---------------------------
Profit from operations 240,060
Realised gain on available-for-sale
shares 90,202
Fair value adjustment on
financial assets through
profit and loss - Share Options 655,224
Interest income 6,763
Share of income from associate 9,587
Finance charges (253,477)
---------------------------
Profit before tax 748,359
===========================
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1. Segment profit represents the profit earned by each segment without the allocation of central administration costs, depreciation, other income, share of losses from associate, finance charges, and income tax. This is the measure reported to the Group's Chief Executive Officer for the purpose of resource allocation and assessment of segment performance.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
Six months ended
30 June 30 June
2017 2016
$ $
11. Segmental analysis (continued)
Segment assets:
Africa 138,185,655 121,774,887
Rest of world 29,162,399 14,801,971
---------------------------- ----------------------------
Total segment assets 167,348,054 136,576,858
Head office companies 39,709,123 31,726,985
---------------------------- ----------------------------
207,057,177 168,303,843
Eliminations * (103,959,649) (75,371,955)
---------------------------- ----------------------------
Total assets 103,097,528 92,931,888
============================ ============================
Segment liabilities:
Africa 31,694,352 24,714,022
Rest of world 17,712,149 10,505,807
---------------------------- ----------------------------
Total segment liabilities 49,406,501 35,219,829
Head office companies 88,215,910 58,214,814
---------------------------- ----------------------------
137,622,411 93,434,643
Eliminations * (102,488,227) (73,923,116)
---------------------------- ----------------------------
Total liabilities 35,134,184 19,511,527
============================ ============================
For the purposes of monitoring segment performance
and allocating resources between segments the Group's
Chief Executive Officer monitors the tangible,
intangible and financial assets attributable to
each segment. All assets are allocated to reportable
segments with the exception of property, plant
and equipment used by the head office companies,
certain amounts included in other receivables,
and cash and cash equivalents held by the head
office companies.
* Eliminations include inter-group accounts receivable,
inter-group accounts payable and inter-group investments.
Other segment information:
Depreciation
Africa 5,610,218 6,105,737
Rest of world 616,229 833,078
---------------------------- ----------------------------
Total segment depreciation 6,226,447 6,938,815
Head office companies 165,684 150,984
---------------------------- ----------------------------
6,392,131 7,089,799
============================ ============================
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
Six months ended
30 June 30 June
2017 2016
----------------- ------------
$ $
11. Segmental analysis (continued)
Additions to property,
plant and equipment
Africa 3,610,324 4,089,444
Rest of world 162,315 -
----------------- ----------
Total segment additions 3,772,639 4,089,444
Head office companies 435,206 9,958
----------------- ----------
4,207,845 4,099,402
================= ==========
Information about major customers
Included in revenues arising from the Africa segment
are revenues of approximately $35.7 million (2016:
$35.4 million) which arose from sales to customers
that represent more than 10% of the Group's revenue.
12. Commitments
The Group has the following
capital commitments at 30 June
2017:
Committed capital expenditure 1,898,404 294,333
================= ==========
The Group has outstanding purchase orders amounting
to $6.5 million at 30 June 2017 (30 June 2016:
$4.0 million).
13. Contingencies
There has been no change to our contingent liabilities
as disclosed in the Annual Financial Statements
for the year ended 31 December 2016.
14. Events post the reporting date
Amendments and changes to the Tanzania Mining
Act of 2010:
The Tanzanian Parliament passed SPECIAL BILL SUPPLEMENT
No2, No3 & No4 on the 28 of June 2017. The legislative
changes were Gazetted on the 7 of July 2017, resulting
in the changes being effective from this date.
Although the new legislation has significant impact
on mineral right holders, it does impact on Capital
Drilling as a service provider to the mineral
right holders. Included in the Legislative changes
are additional legislation to the current Mining
Act of 2010, with specific reference to the additional
PART VIII (LOCAL CONTENT, CORPORATE SOCIAL RESPONSIBILITY
& INTEGRITY PLEDGE). Clause 102 of the additional
Part legislate Provision of goods & services by
Tanzania entrepreneurs. Mineral right holders
shall give preference to goods or services produced
or available in Tanzania. Where goods or services
are not available in Tanzania a Joint Venture
shall be established with 25% shareholding from
a local Tanzania company. Clause 102(9) defines
a local Tanzania company as a company incorporated
under the Tanzanian Companies Act, with 100% shareholding
by Tanzanian citizens, or a company in a joint
venture partnership with Tanzanian citizens with
shareholding of not less than 51%.
Capital Drilling is currently engaged with advisors
in Tanzania to determine the practical application
of this clause.
CAPITAL DRILLING LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2017
14. Events post the reporting date (Continue)
Interim dividend declared:
The directors proposed that an interim dividend
of 0.5 cent per share be paid to shareholders on
6 October 2017. This dividend has not been included
as a liability in these condensed consolidated
interim financial statements. The proposed dividend
is payable to all shareholders on the Register
of Members on 8 September 2017. The total estimated
interim dividend to be paid is $0.7 million (2016:
$2 million). The payment of this dividend will
have no tax consequences for the Group.
15. Going concern
The Group has set specific objectives and also
has policies and processes in place to manage its
capital and its financial, credit risk and liquidity
risks.
The Group has borrowings and debt facilities which,
together with its clients' receipts, fund its day
to day working capital requirements. Volatile economic
conditions may create uncertainty particularly
over (a) the level of demand for the Group's services;
(b) exchange rate fluctuations against the US Dollar
and thus the consequence for the cost of the Group's
direct costs; and (c) the availability of bank
financing in the foreseeable future.
The Group's forecasts and projections, taking into
account potential changes in its performance, show
that the Group should be able to operate within
the level of its capital structure. The Group continuously
discusses its future borrowing and / or refinancing
needs with its bankers and no matters have been
drawn to its attention to suggest that these needs
may not be met on acceptable terms.
The directors confirm that the Group has adequate
resources to continue in operational existence
for the foreseeable future. The Group continues
to adopt the going concern basis of accounting
in preparing the interim financial statements.
16. Financial instruments
Financial instruments that are measured in the
consolidated statement of financial position or
disclosed at fair value require disclosure of fair
value measurements by level based on the following
fair value measurement hierarchy:
-- Level quoted prices (unadjusted) in active markets
1: for identical assets or liabilities;
-- Level inputs other than quoted prices included
2: within level 1 that are observable for the
asset or liability, either directly (that
is, as prices) or indirectly (that is, derived
from prices); and
-- Level inputs for the asset or liability that are
3: not based on observable market data (that
is, unobservable inputs).
The Group's available-for-sale financial assets,
with a fair value of $1.9 million (31 December
2016: $0.9 million) are listed equity securities
in the mining industry that measured at fair value
at the end of each reporting period. The available-for-sale
investments are designated as level 1 in the fair
value hierarchy. Their fair value is determined
using quote bid prices in an active market. The
Group's held-for-trading financial assets, with
a fair value of $0.3 million (31 December 2016:
$0.4 million) are options and warrants to acquire
shares in listed equity securities that are not
traded in an active market. The held-for-trading
financials assets are designated as level 3 in
the fair value hierarchy. Their fair value is determined
using a binomial tree model valuation technique
based on observable market data that includes the
value of the underlying security, the exercise
price, volatility and risk free rate of return.
The fair values of financial instruments that are
not traded in an active market are determined using
standard valuation techniques. These valuation
techniques maximise the use of observable market
data where available and rely as little as possible
on Group specific estimates. The directors consider
that the carrying value amounts of financial assets
and financial liabilities recorded at amortised
cost in the consolidated financial statements are
approximately equal to their fair values. The fair
values disclosed for the financial assets and financial
liabilities are classified in level 3 of the fair
value hierarchy have been assessed to approximate
their carrying amounts based on a discounted cash
flow assessment.
CAPITAL DRILLING LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITY
For the six months
ended 30 June 2017
We confirm that to the best of our knowledge:
a) the condensed set of consolidated interim financial
statements, which has been prepared in accordance
with International Accounting Standard 34, Interim
Financial Reporting, as issued by the International
Accounting Standards Boards gives a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Group as required
by DTR4.2.4R;
b) the interim management report includes a fair
review of the information required by DTR 4.2.7R
and DTR4.2.8; and
c) there has been no significant individual related
party transactions during the first six months
of the financial year and nor have there been
any significant changes in the Group's related
party relationships from those reported in the
Group's annual financial statement for the year
ended 31 December 2016.
ON BEHALF OF THE DIRECTORS
Jamie Boyton
Chairman of the
Board of Directors
Brian Rudd
Executive Director
CAPITAL DRILLING LIMITED
Principal Risks and Uncertainties
The Group operates in environments that pose various risks and uncertainties. Aside from the generic risks that face all businesses, the Group's business, financial condition or results of operations could be materially and adversely affected by any of the risks described below.
These risks should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties nor are they listed in order of magnitude or probability. Additional risks and uncertainties that are not presently known to the Directors, or which they currently deem immaterial, may also have an adverse effect on the Group's operating results, financial condition and prospects.
The principal risks associated with the business are:
Area Description Mitigation
------------------ ------------------------------- --------------------------------
Fluctuation The Group is highly The Group is seeking
in levels dependent on the levels to balance these risks
of mining of mineral exploration, by building a portfolio
activity development and production of long term drilling
activity within the contracts, expanding
markets in which it into new geographic
operates. A reduction areas and implementing
in exploration, development its Lean Operating
and production activities, Model.
or in the budgeted
expenditure of mining
and mineral exploration
companies, will cause
a decline in the demand
for drilling rigs and
drilling services.
------------------ ------------------------------- --------------------------------
Reliance The Group's revenue The Group has entered
on key customers is reliant on a small into long term production
number of key customers. contracts with its
The loss of a key customer, key customers for periods
or a significant reduction between 2 to 5 years.
in the demand for drilling Contract renewal negotiations
provided to a key customer are initiated well
will have a significant in advance of expiry
adverse effect on the of contracts to ensure
Group's revenues. contract renewals are
concluded without interruption
to drilling services.
The Group has and continues
to monitor projects
closely and invest
a significant amount
of time into client
relationship and service
level monitoring at
all levels of the business.
A key part of this
process is the quarterly
project steering committee
meetings with key client
stakeholders that provide
a forum for monitoring
and reporting on project
performance and key
performance indicators
("KPI's"), contractual
issues, pricing and
renewal.
------------------ ------------------------------- --------------------------------
Key personnel The Group's ability The Group has expanded
and staff to implement a strategy capabilities in the
retention of pursuing expansion areas of business development,
opportunities is dependent supply chain, finance,
on the efforts and training and health
abilities of its executive and safety and continues
directors and senior to do so through the
managers. In addition, recruiting of senior
the Group's operations managers in the various
depend, in part, upon fields, implementing
the continued services comprehensive training
of certain key employees. programmes and providing
If the Group loses employees with international
the services of any exposure in their fields.
of its existing key
personnel without timely The Group has implemented
and suitable replacements, remuneration policies
or is unable to attract that seeks to recruit
and retain new personnel suitable talent and
with suitable experience to remunerate talent
as it grows, the Group's at levels commensurate
business, financial with market levels.
condition, results
of operations and prospects
may be materially and
adversely affected.
In addition, business
may be lost to competitors
which members of senior
management may join
after leaving their
positions with the
Group.
------------------ ------------------------------- --------------------------------
Operating Operations are subject The Executive Leadership
risks to various risks associated Team and managers provide
with drilling including, leadership to projects
in the case of employees, on the management of
personal injury, malaria these risks and actively
and loss of life and, engage with all levels
in the Group's case, of employees. The Group
damage and destruction have implemented and
to property and equipment continue to monitor
and interruption or and update a range
suspension of drill of health and safety
site operations due policies and procedures,
to unsafe drilling including equipment
operations. The occurrence standards and standard
of any of these events work procedures. Employees
could adversely impact are provided with training
the Group's business, regarding risks associated
financial condition, with their employment,
results of operations policies and standard
and prospects, lead work procedures.
to legal proceedings
and damage the Group's All serious near misses
reputation. In particular, or incidents are reported
clients are placing and fully investigated
an increasing focus and mitigating actions
on occupational health implemented.
and safety, and deterioration
in the Group's safety Health and Safety statistics
record may result in and incident reports
the loss of key clients. are monitored throughout
our projects and the
various management
structures of the Group,
including the HSSE
committee. Where necessary
policies and procedures
are updated to reflect
developments and improvement
needs.
The Group maintains
adequate insurance
policies to provide
insurance cover against
operating risks.
------------------ ------------------------------- --------------------------------
Currency The Group receives To minimise the Group's
fluctuations the majority of its risk, the Group tries
revenues in US dollars. to match the currency
However, some of the of operating costs
Group's costs are in with the currency of
other currencies in revenue. Funds are
the jurisdictions in pooled centrally in
which it operates. the head office bank
Foreign currency fluctuations accounts to the maximum
and exchange rate risks extent possible. The
between the value of group have implemented
the US dollar and the procedures to allow
value of other currencies for the repatriation
may increase the cost of funds to the Group's
of the Group's operations Head Office bank accounts
and could adversely from jurisdictions
affect the financial where exchange control
results. As a result, regulations are in
the Group is exposed effect.
to currency fluctuations
and exchange rate risks.
------------------ ------------------------------- --------------------------------
Political, The Group operates The Group has invested
economic in a number of jurisdictions in a number of countries
and legislative where the political, thereby diversifying
risk economic and legal exposure to any single
systems are less predictable jurisdiction.
than in countries with
more developed industrial The Group monitors
structures. Significant political and regulatory
changes in the political, developments in the
economic or legal landscape jurisdictions it operates
in such countries may in through a number
have a material effect of service providers
on the Group's operations and advisors.
in those countries.
Potential impacts include Senior management regularly
restrictions on the reports to the Board
export of currency, on any political or
expropriation of assets, regulatory changes
imposition of royalties in the jurisdictions
or other taxes targeted we operate in.
at mining companies,
and requirements for Where significant events
local ownership. Political occur, we work closely
instability can also with our clients, advisors
result in civil unrest, and other stakeholders
industrial action and to address these events.
nullification of existing
agreements, mining
permits or leases.
Any of these may adversely
affect the Group's
operations or results
of those operations.
------------------ ------------------------------- --------------------------------
CAPITAL DRILLING
LIMITED
APPIX: GLOSSARY AND ALTERNATIVE PERFORMANCE
MEASURES
The following terms and alternative performance measures
are used in the half year results release for the
six months ended 30 June 2017.
ARPOR (Average Revenue Average revenue for the period
Per Operating Rig) / Monthly average active operating
rig
EBITDA Earnings before interest, taxes,
depreciation, amortisation and
additional specific items
NET CASH (DEBT) Cash and cash equivalents less
short term and long term debt
RETURN ON CAPITAL Profit from operations / (Average
EMPLOYED (%) total assets - Average current
liabilities)
RETURN ON TOTAL ASSETS Profit from operations / Average
(%) total assets
OPERATING CASH FLOW Cash from operations / Revenue
MARGIN
NET ASSET VALUE PER Total equity / Weighted average
SHARE (CENTS) number of ordinary shares
AIFR All incident frequency rate
DES Drilling equipment standards
HSSE Health, Safety, Social and Environment
KPI Key Performance Indicator
LTI Lost Time Injury
Reconciliation of alternative performance measures
to the financial statements:
Six months ended
30 June 30 June
2017 2016
------------ ------------
$ $
ARPOR can be reconciled from the financial statements
as per the below:
Revenue per financial statements
($) 62,332,410 41,714,801
Non-drilling revenue ($) (2,654,410) (2,123,175)
------------ ------------
Revenue used in the calculation
of ARPOR ($) 59,678,000 39,591,626
------------ ------------
Average revenue for the period 9,946,333 6,598,604
Monthly Average active operating
Rigs 52 38
Monthly Average operating
Rigs 93 94
------------ ------------
ARPOR (rounded to nearest
$'000) 191,000 175,000
============ ============
EBITDA can be reconciled from the condensed consolidated
interim financial statements as per the below:
Profit (Loss) for the period 2,580,275 (840,057)
Depreciation 6,392,131 7,089,799
Taxation 1,945,364 1,588,416
Share of income from associate (5,213) (9,587)
Interest income (137,264) (6,763)
Finance charges 543,557 253,477
Fair value adjustment on financial
assets through profit and loss
- Share Options 123,989 (655,224)
Realised gain (loss) on available-for-sale
shares 183,495 (90,202)
------------ ------------
EBITDA 11,626,334 7,329,859
============ ============
Six months ended
30 June 30 June
2017 2016
----------------- ------------------
$ $
Net cash (debt) can be reconciled from the condensed
consolidated
interim financial statements as per the below:
Cash and cash equivalents 18,422,658 12,728,555
Long-term liabilities - (10,000,000)
Current portion of long-term
liabilities (15,124,480) (2,095,125)
----------------- ------------------
Net cash (debt) 3,298,178 633,430
================= ==================
Net Asset Value per share (cents) can be calculated
as per the below:
Total Equity 67,963,344 73,420,361
Weighted average number of
ordinary shares used in the
calculation of basic earnings
per share 135,076,227 134,753,539
----------------- ------------------
Net Asset Value per share
(Cents) 50.31 54.48
----------------- ------------------
EBITDA
EBITDA represents profit or loss for the period
before interest, income taxes, depreciation and
amortisation adjusted for share of income (loss)
from associate, interest income, finance charge,
fair value adjustment on financial assets at fair
value through profit and loss and realised gain
(loss) on available-for-sale shares.
EBITDA is non-IFRS financial measure that is used
as supplemental financial measures by management
and external users of financial statements, such
as investors, to assess our financial and operating
performance. These non-IFRS financial measures will
assist our management and investors by increasing
the comparability of our performance from period
to period.
We believe that including EBITDA assists our management
and investors in:-
(i) understanding and analysing the results of our
operating and business performance, and
(ii) monitoring our ongoing financial and operational
strength in assessing whether to continue to hold
our shares. This is achieved by excluding the potentially
disparate effects between periods of depreciation
and amortisation, income (loss) from associate,
interest income, finance charge, fair value adjustment
on financial assets at fair value through profit
and loss and realised gain (loss) on available-for-sale
shares, which may significantly affect comparability
of results of operations between periods.
(iii) EBITDA has limitations as analytical tools
and should not be considered as alternatives to,
or as substitutes for, or superior to, profit or
loss for the period or any other measure of financial
performance presented in accordance with IFRS. Further
other companies in our industry may calculate these
measures differently than we do, limiting their
usefulness as a comparative measure.
Net cash
(debt)
Net cash (debt) is a non-GAAP measure that is defined
as cash and cash equivalents less short term and
long term debt.
Management believe that net cash (debt) is a useful
indicator of the Group's indebtedness, financial
flexibility and capital structure because it indicates
the level of borrowings after taking account of
cash and cash equivalents within the Group's business
that could be utilised to pay down the outstanding
borrowings. Management believes that net debt can
assist securities analysts, investors and other
parties to evaluate the Group. Net cash (debt) and
similar measures are used by different companies
for differing purposes and are often calculated
in ways that reflect the circumstances of those
companies. Accordingly, caution is required in comparing
net debt as reported by the Group to net cash (debt)
of other companies.
Net Asset Value per share (cents)
Net Asset Value per share (cents) is a non-financial
measure taking into consideration the total equity
over the weighted average number of shares used
in the calculation of basic earnings per share.
Management believes that the net asset value per
share is a useful indicator of the level of safety
associated with each individual share because it
indicates the amount of money that a shareholder
would get if the Group were to liquidate. Management
believes that net asset value per share can assist
securities analysts, investors and other parties
to evaluate the Group.
Net asset value per share and similar measures are
used by different companies for differing purposes
and are often calculated in ways that reflect the
circumstances of those companies. Accordingly, caution
is required in comparing net asset value per share
as reported by the Group to net asset value per
share of other companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGMRKNZGNZG
(END) Dow Jones Newswires
August 17, 2017 02:01 ET (06:01 GMT)
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