REG - Capital Limited - Interim Results
15/08/2024 07:00
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RNS Number : 5110A Capital Limited 15 August 2024
FOR IMMEDIATE RELEASE
Capital Limited
("Capital", the "Group" or the "Company")
H1 2024 Results (Unaudited)
Capital Limited (LSE: CAPD), a leading mining services company, today provides
its results (unaudited) for the half-year period 1 January to 30 June 2024
(the "Period").
H1 2024 H1 2023 vs
H1 2023
Revenue ($ m) 169.4 154.3 9.8%
EBITDA (Adjusted for IFRS 16 leases)(1,2)($ m) 42.9 43.9 -2.3%
Operating profit ($ m) 25.0 28.4 -12.0%
Operating profit (pre-exceptional items)(4) ($ m) 26.6 28.4 -6.3%
Investment gain / (loss) ($ m) (0.5) 0.8 N/A
Net Profit After Tax (NPAT) ($ m) 9.6 17.6 -45.5%
NPAT (Adjusted for investment gain/ (loss) and exceptional items)(4) ($ m) 11.8 16.8 -29.8%
Earnings per share
Basic EPS (cents) 4.7 8.9 -46.4%
Basic EPS (Adjusted for investment gain/ (loss) and exceptional items) (cents) 5.8 8.4 -30.9%
Interim Dividend per Share (cents) 1.3 1.3 -
Cash from Operations (Adjusted for IFRS 16 leases)(2) ($ m) 52.3 38.2 36.9%
Capex(3) ($ m) 44.3 36.2 22.4%
Net Debt(1) ($ m) 86.4 66.5 29.9%
Investments ($ m) 47.8 42.1 13.5%
Margins and returns
EBITDA Margin (Adjusted for IFRS 16 leases)(1,2) 25.3% 28.5%
Operating profit margin (pre-exceptional items)(4) 15.7% 18.4%
NPAT Margin (Adjusted for investment gain/ (loss) and exceptional items) 7.0% 10.9%
*All amounts are in US dollars 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 34-37 of this results announcement.
((2) ) Adjustment for the cash cost of the IFRS 16 leases which
amounts to $6.0 million in H1 2024 (H1 2023: $3.5 million) (see page 17).
((3) ) Capital expenditure (Capex) consists of purchases of PPE for
cash, prepayments for PPE and assets purchased during the year and financed by
OEM.
((4) ) Exceptional items in this period include ERP implementation
costs of $1.65 million in H1 2024 (H1 2023: nil).
Commenting on the interim results, Peter Stokes, Chief Executive, said:
"Capital in 2024 is undergoing a number of structural transitions that we
expect will set up the business for the next wave of growth. We are soon
coming to the end of our waste mining contract at Sukari and, while at the end
of 2020, this contract was the largest award in the Company's history, once it
concludes we will emerge as a much larger business, a credit to the business
development success across the rest of the Group.
In addition, we have de-risked the Company through a significantly improved
client portfolio, a more diversified service offering and, more recently, a
more diversified geographical footprint adding lower-risk jurisdictions,
namely USA and Canada, across our drilling and laboratories businesses. This
has been made possible by the longstanding relationships we have built over
the years with some of the world's leading miners.
Nevertheless, the half has not been without challenges with the ramp-ups of
some of our key growth areas, namely Nevada Gold Mines, USA (Barrick-Newmont
JV), Belinga, Gabon (majority owned by Fortescue Metals Group) and MSALABS,
behind what we would have liked to see, impacting our results today. Despite
these delays, we are confident in our ability to deliver the returns that will
justify the material investment we have made.
As we look into next year, we expect to maintain the lower end of our targeted
25-30% adjusted EBITDA margins. Successful delivery of these growth projects
should drive higher margins at these sites offsetting the impacts from losing
economies of scale at Sukari and the anticipated margin dilution from MSALABS
as it becomes a larger proportion of the total Group (a business we have
guided to target lower adjusted EBITDA margins of 15-20%, albeit alongside
lower capital intensity).
We have equally been in a transitionary period from a balance sheet
perspective. We were pleased to recently announce the sale of our shareholding
in Predictive Discovery, the proceeds of which will be the first major step in
reducing our debt levels. We have now also actively begun marketing the sale
of the mining fleet at Sukari which will further reduce our debt exposure.
This rapid de-gearing will reset the business both by reducing our current
level of interest payments and giving the business greater flexibility to move
quickly on new opportunities.
We are pleased to announce an interim dividend of 1.3 cents per share, a
testament to our commitment to creating value for our shareholders through
shareholder returns as well as growth in the broader business.
Financial Highlights
· H1 2024 revenue of $169.4 million, up 9.8% on H1 2023 ($154.3
million);
- Full-year revenue guidance remains $355 - $375 million.
· H1 2024 EBITDA (adjusted for IFRS16 leases and exceptional items)
of $42.9 million, a decrease of 2.3% on H1 2023 ($43.9 million) with H1 2024
EBITDA Margin (adjusted for IFRS16 leases and exceptional items) of 25.3% (H1
2023: 28.5%):
- Capital is undergoing a number of transitions that we expect will
set up the business for the next wave of growth, including an expansion into
North America. We have seen challenges in H1 2024 with the ramp-ups at Nevada
Gold Mines, Belinga and MSALABS being slower than expected adversely impacting
the earnings for the Group;
- Nevertheless, we remain confident in delivering strong returns
across this new business and expect to achieve our previously guided 25-30%
adjusted EBITDA margins, albeit towards the lower end. This incorporates an
improvement in returns across Nevada Gold Mines and Belinga while being
cognisant that MSALABS will continue to grow into a more significant
proportion of the business and while relatively capital light, is targeting
our guided adjusted EBITDA range of 15-20%.
· H1 2024 Net Profit After Tax (NPAT) (adjusted for investment
gain/ loss and exceptional items) of $11.8 million, a decrease of 29.8% on H1
2023 ($16.8 million). This was driven by:
- reduction in Group EBITDA margin from new business growth, as
described above;
- higher interest costs (~$2 million increase YoY) from funding
investment into new growth areas, particularly in the USA, and higher tax
expense (~$1 million increase YoY).
· Exceptional cost of $1.65 million in H1 2024 ($nil in H1 2023
(with certain costs previously capitalised)) relates to the costs expensed in
implementing an Enterprise Resource Planning (ERP) system which will provide
the business with a strong backbone for continued growth. ERP costs will
continue to be incurred until the end of 2025;
· H1 2024 Cash from Operations (adjusted for IFRS 16 leases) of
$52.3 million a 36.9% increase on H1 2023 ($38.2 million) in part driven by a
favourable working capital position at the end of the period, some of which
will normalise in H2 2024;
· H1 2024 Capex of $44.3 million (H1 2023: $36.2 million) including
prepayments and assets financed by OEM;
· In H1 2024 Capital completed a strategic investment in Eco
Detection for $6.6 million acquiring a ~22% stake. As part of our strategic
investment, Capital has also agreed an exclusive arrangement for the
distribution of this technology to the mining industry;
· The value of the Group's direct investment portfolio increased to
$47.8 million (including holding in Predictive Discovery) from $47.2 million
at 31 December 2023 (30 June 2023: $42.1 million);
· Net debt at H1 2024 of $86.4 million increased 29.9% on H1 2023
($66.5 million) predominantly in order to fund our material new contracts with
Nevada Gold Mines across both drilling and laboratory services;
- Predictive Discovery Sale: On 14(th) August 2024, we announced an
agreement to sell our Predictive Discovery holding to Perseus Mining for a
total cash consideration of ~$31.2 million which will be used predominantly to
reduce debt.
· Declared an interim dividend of 1.3 cents per share, to be paid
on 3 October 2024 to shareholders registered on 30 August 2024.
Operational & Strategic Review
· Safety performance remains world-class with a Total Recordable
Injury Frequency Rate ("TRIFR") of 1.1 per 1,000,000 hours worked in H1 2024
(H1 2023: 1.03).
Capital Drilling:
· H1 2024 average rig utilisation was 69%, a decrease of 8.0% on H1
2023 (75%). The decrease was primarily driven by lower utilisation in Q1 2024,
which rebounded into Q2 2024 (72%) driven by increased rig counts at Belinga
and the beginning of the ramp-up at Nevada Gold Mines. The Group's target
average utilisation is ~75%;
· Total rig count increased to 127 by the end of H1 2024 (H1 2023:
125), with the ramp-up of the new Nevada Gold Mines drilling contract weighted
to the second half. Further rigs were purchased in H1 2024 however will only
contribute to total rig count once commissioned. We expect to add ~9 further
rigs by the end of 2024;
· Average monthly revenue per operating rig ("ARPOR") was $204,000
in H1 2024, up 8.5% on H1 2023 ($188,000). This strengthening in ARPOR is
primarily the result of the ramp-up of high-quality contracts, as well as a
continued focus on efficiency at our more established sites.
· New contract win:
- An up to two-year diamond and reverse circulation drilling
services contract with Perseus Mining at its new Nyanzaga Project in Tanzania.
· H1 2024 contract wins (previously announced):
- A one-year (with a one-year extension option) grade control
drilling services contract with Barrick Gold at its Lumwana Mine in Zambia;
- A two-year extension of the exploration and delineation drilling
contract with Predictive Discovery at its Bankan Gold Project in Guinea;
- An extension of open pit drilling services at Centamin's Sukari
Gold Mine in Egypt for a further 5-years, starting from 1 January 2025;
- A two-year grade control drilling services contract with Perseus
Mining at the Sissingué Gold Mine in Côte d'Ivoire; and
- Expanded rig count at Belinga in 2024 under our existing
three-year reverse circulation and diamond drilling services contract.
Q2 2024* Q2 2023 vs Q1 2024 vs H1 2024* H1 2023 H1 2024* vs
Q2 2023 Q1 2024 H1 2023
Closing fleet size 127 125 1.6% 124 2.4% 127 125 1.6%
Average Fleet 127 124 2.4% 123 3.3% 125 124 2.4%
Fleet utilisation (%) 72 73 -1.4% 66 9.1% 69 75 -8.0%
Average utilised rigs 91 90 1.1% 81 12.3% 86 93 -5.4%
ARPOR(1)($) 207,000 183,000 13.1% 202,000 2.5% 204,000 188,000 8.5%
Surveying revenue 1.3 0.9 44.4% 0.9 44.4% 2.2 2.0 10.0%
Total Drilling and 60.1 52.6 14.3% 52.2 15.1% 112.3 110.0 2.1%
associated revenue(2) ($m)
*Unaudited numbers
(1) Average revenue per month per operating rig
(2)Associated revenue refers to revenue generated from complementary services
tied to our drilling operations
All amounts are in USD unless otherwise stated
Capital Mining:
· Sukari waste mining slight extension: Completed the 120Mt waste
mining contract at the end of Q2 2024, 6 months ahead of the contract term at
Sukari. As a result of this early completion, Centamin has opted to leverage
our fleet further and allocated up to a further 10Mt of waste removal that we
shall complete over Q3 2024.
- Capital is now actively marketing a sale of the Sukari mining
fleet to occur after the contract at Sukari has been concluded.
· At Belinga, our contract mining fleet has been successfully
mobilised to site. Activities in the first half were primarily focused on
drill pad excavation and civils activity to support FMG's near-term focus on
resource expansion.
MSALABS:
· In H1 2024, the business continued to focus on establishing
widespread uptake of the PhotonAssay(TM) technology and, while the adoption
cycle has been slower than expected, engagement with top-tier customers is
very strong and underpins a strong long-term outlook;
· Revenues for the year will be weighted to the latter portion of
the year, particularly driven by the ramp-up of our new major contract with
Nevada Gold Mines. Despite a slower-than-expected start, construction of the
new laboratories in Nevada has commenced with sample processing planned to
begin in the second half of the year:
- MSALABS will deploy three PhotonAssay(TM) units in Nevada with
fire assay and multi-element assaying capabilities to follow in 2025. The
total contract with Nevada Gold Mines is anticipated to generate ~$140 million
in revenue over the five-year term, making it the largest award of new
business in the history of MSALABS;
· The three PhotonAssay(TM) units in Nevada marked the start of
this broader partnership agreement with Barrick Gold, with the potential for a
further ten PhotonAssay(TM) units deployed across multiple of Barrick's other
operations. The fourth unit under this partnership was commissioned this
quarter at the Kibali Gold Mine, DRC (the second unit on site);
· MSALABS possesses the largest international network of Chrysos
PhotonAssay(TM) technology; and
· MSALABS's relationship with Chrysos remains strong with the total
planned deployment of 21 units.
Capital Investments:
· Predictive Discovery Sale: On 14(th) August 2024, we announced an
agreement to sell our Predictive Discovery holding to Perseus Mining for a
total cash consideration of ~$31.2 million. Further details on the agreement
with Perseus Mining are available in the separate announcement;
- Proceeds from the sale will be recycled back into the broader
business, predominantly reducing Capital's debt levels.
· The total value of investments (listed and unlisted) was $47.8
million as at 30 June 2024, up from $47.2 million as at 31 December 2023;
- The portfolio recorded investment losses (realised and unrealised)
of $0.5 million in H1 2024.
Capital Innovation: Strategic Investment in Eco-Detection
· Capital completed a $6.6 million strategic investment in
Eco-Detection, acquiring a ~22% ownership stake in the company;
· Eco-Detection's Ion-Q platform is the world's first fully
autonomous multiparameter laboratory-grade water analysis system. This
continuously monitors water quality, transmitting proven laboratory-grade
measurements in real-time directly from site, thereby eliminating the need for
manual sampling;
· The cutting-edge technology holds significant growth potential
across multiple sectors including the mining industry, by providing critical
data for compliance and remediation reporting, monitoring down-hole water
quality and delivering real-time contaminant alerts to improve response times
to leaching from tailings dams and other storage facilities. Additionally, it
can aid community relations through monitoring of the local environment and
waterways;
- As part of our strategic investment, Capital has also agreed an
exclusive arrangement for the distribution of this technology to the mining
industry.
Outlook
· Revenue guidance for 2024 remains $355-$375 million;
· Capital expenditure guidance for 2024 remains $70-$80 million;
· Capital Drilling anticipates revenue growth in H2 2024, driven by
the ramp-up of operations, particularly at Nevada Gold Mines, as well as the
commencement of operations at Lumwana and Nyanzaga;
· Capital Mining will benefit from the contract extension at Sukari
for up to an additional 10Mt throughout Q3 2024;
· MSALABS will continue its multi-year laboratory roll-out, with a
particular emphasis on deploying Chrysos PhotonAssay(TM) units, further
supported by our significant contract with Nevada Gold Mines. Guidance for
MSALABS remains $50-$60 million for 2024, however, we see some risk to the
downside should there be a delay to the ramp-up in H2 2024 of the Nevada Gold
Mines contract; and
· Tendering activity remains robust across the Group with a number
of opportunities progressing.
Capital Limited will be hosting a live webcast presentation at 09:00 BST on
Thursday 15 August 2024, where questions can be submitted through the
platform.
The webcast presentation link:
https://sparklive.lseg.com/CapitalDrillingLtd/events/a8c5b546-f500-4a77-b94d-7830465dd6ab/capital-limited-h1-2024-results
(https://sparklive.lseg.com/CapitalDrillingLtd/events/a8c5b546-f500-4a77-b94d-7830465dd6ab/capital-limited-h1-2024-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
Peter Stokes, Chief Executive
Officer
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
Burson Buchanan
+44 20 7466 5000
Bobby
Morse
capital@buchanan.uk.com
George Pope
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.
INDEPENDENT REVIEW REPORT TO CAPITAL LIMITED
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2024 which comprises the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial position,
condensed consolidated statement of changes in equity, condensed consolidated
statement of cash flows, and notes to the condensed consolidated interim
financial statements.
Basis for conclusion
We conducted our review in accordance with Revised International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410
(Revised)"). A review of interim financial information consists of making
enquiries, 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 (UK) 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.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
14 August 2024
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2024
Unaudited
Six months ended
Notes 30 June 2024 30 June 2023
US$'000 US$'000
Revenue 3 169,434 154,270
Cost of sales (94,948) (83,316)
Gross profit 74,486 70,954
Administration expenses (27,252) (23,565)
Depreciation, amortisation, and impairments (22,255) (19,023)
Operating profit 24,979 28,366
Interest income 46 17
Finance costs (8,202) (5,814)
Fair value (loss)/gain on financial assets 17 (493) 844
Profit before taxation 16,330 23,413
Taxation 4 (6,695) (5,810)
Profit and total comprehensive income for the period 9,635 17,603
Profit attributable to:
Owners of the parent 9,206 16,943
Non-controlling interest 11 429 660
9,635 17,603
Earnings per share:
Basic (cents per share) 5 4.7 8.9
Diluted (cents per share) 5 4.7 8.8
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Unaudited Audited
Notes 30 June 2024 31 December 2023
ASSETS US$'000 US$'000
Non-current assets
Property, plant and equipment 7 229,023 208,657
Right-of-use assets 8 33,169 29,684
Goodwill 1,296 1,296
Intangible assets 699 572
Other receivables 9 12,082 9,789
Investment in associate 18 6,633 -
Total non-current assets 282,902 249,998
Current assets
Inventories 61,134 61,922
Trade receivables 48,695 49,567
Other receivables 9 33,261 24,055
Investments at fair value 17 47,780 47,154
Current tax receivable 497 686
Cash and cash equivalents 39,915 34,366
Total current assets 231,282 217,750
Total assets 514,184 467,748
EQUITY AND LIABILITIES
Equity
Share capital 10 19 19
Share premium 10 64,719 62,390
Equity-settled employee benefits reserve 4,199 5,763
Other reserve 190 190
Retained income 198,739 195,515
Equity attributable to owners of the parent 267,866 263,877
Non-controlling interest 11 10,459 9,270
Total equity 278,325 273,147
Non-current liabilities
Loans and borrowings 12 95,164 75,521
Lease liabilities 22,380 21,109
Trade and other payables 1,643 2,057
Deferred tax 34 34
Total non-current liabilities 119,221 98,721
Current liabilities
Trade and other payables 65,295 50,685
Provisions 487 487
Current tax payable 10,861 9,315
Loans and borrowings 12 29,623 27,052
Lease liabilities 10,372 8,341
Total current liabilities 116,638 95,880
Total equity and liabilities 514,184 467,748
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 June 2024
Equity-settled employee benefits reserve
Total attributable to equity holders of the Group
Treasury share reserve Non-controlling interest
Share Share premium Total share capital Other reserve Total reserves Retained income Total
capital equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 31 December 2022 - Audited 19 62,390 (2,475) 59,934 4,469 190 4,659 168,726 233,319 5,573 238,892
Profit for the period - - - - - - - 16,943 16,943 660 17,603
Contributions by and distributions to owners
Issue of shares - - 2,475 2,475 (2,196) - (2,196) (279) - - -
Recognition of share-based payments - - - - 2,034 - 2,034 - 2,034 - 2,034
Adjustment arising from change in non-controlling interest - - - - - - - (1,964) (1,964) 1,889 (75)
Dividends - - - - - - - (5,101) (5,101) (19) (5,120)
Total transactions with owners - - 2,475 2,475 (162) - (162) (7,344) (5,031) 1,870 (3,161)
Balance at 30 June 2023 (Unaudited) 19 62,390 - 62,409 4,307 190 4,497 178,325 245,231 8,103 253,334
Balance at 31 December 2023 - Audited 19 62,390 - 62,409 5,763 190 5,953 195,515 263,877 9,270 273,147
Profit for the period - - - - - - - 9,206 9,206 429 9,635
Contributions by and distributions to owners
Issue of shares - 2,329 - 2,329 (2,329) - (2,329) - - - -
Recognition of share-based payments - - - - 765 - 765 - 765 - 765
Adjustment arising from change in non-controlling interest - - - - - - - (880) (880) 792 (88)
Dividends - - - - - - - (5,102) (5,102) (32) (5,134)
Total transactions with owners - 2,329 - 2,329 (1,564) - (1,564) (5,982) (5,217) 760 (4,457)
Balance at 30 June 2024 (Unaudited) 19 64,719 - 64,738 4,199 190 4,389 198,739 267,866 10,459 278,325
CAPITAL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2024
Six months ended
Unaudited Unaudited
Notes 30 June 2024 30 June 2023
US$'000 US$'000
Cash flow from operating activities
Cash generated from operations 13 58,279 41,652
Interest income received 46 17
Finance costs paid (6,071) (4,032)
Interest paid on lease liabilities 8 (1,456) (857)
Tax paid (4,960) (6,921)
Net cash from operating activities 45,838 29,859
Cash flow from investing activities
Purchase of property, plant and equipment 7 (15,963) (25,226)
Proceeds from sale of property, plant and equipment - 45
Purchase of intangible assets and cloud computing arrangements (1,228) (426)
Purchase of investments at fair value 17 (5,404) (4,859)
Purchase of investment in associate 18 (6,633) -
Proceeds on sale of investments at fair value 17 4,285 2,356
Cash paid in advance for property, plant and equipment (11,038) (4,341)
Advance payments on leases (970) (606)
Net cash from investing activities (36,951) (33,057)
Cash flow from financing activities
Repayment of loans and borrowings 12 (12,463) (9,209)
Proceeds from new loans and borrowings 12 20,000 25,000
Arrangement fees paid - new financing (342) (1,431)
Dividends paid 6 (5,134) (5,120)
Repayment of principal on leases liabilities 8 (4,560) (2,634)
Proceeds from issuance of equity to non-controlling interests - 1,193
Purchase of shares from non-controlling interests (88) (1,268)
Net cash from financing activities (2,587) 6,531
Net increase in cash and cash equivalents 6,300 3,333
Cash and cash equivalents at the beginning of the period 34,365 28,380
Effect of exchange rate movement on cash balances (750) 346
Cash and cash equivalents at the end of the period 39,915 32,059
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 six months ended 30 June 2024
1. Basis of presentation and accounting policies
Preparation of the condensed consolidated interim financial statements
The condensed consolidated interim financial statements of Capital Limited and
Subsidiaries ("Capital" or, together, the "Group") as at and for the six
months ended 30 June 2024 (the "Interim Financial Statements"), which are
unaudited, have been prepared in accordance with International Accounting
Standard ("IAS") No. 34, "Interim Financial Reporting". This condensed interim
report does not include all the notes of the type normally included in an
Annual Report. 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 2023 which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). The Interim Financial
Statements have been reviewed in terms of International Standard on Review
Engagements (ISRE) 2410.
The Group Annual Financial Statements are presented in United States Dollars,
which is also the Group's functional currency. Amounts are rounded to the
nearest thousand, unless otherwise stated. This is a change from the 30 June
2023 Financial Statements, and the comparatives have been updated to reflect
the change in presentation.
Accounting policies
The condensed consolidated interim financial statements have been prepared
under the going concern basis under the historical cost convention, except for
certain financial instruments which are measured at fair value.
All accounting policies, presentation and methods of computation which have
been followed in these condensed consolidated financial statements were
applied in the preparation of the Group's financial statements for the year
ended 31 December 2023. New accounting policy during the period is summarised
below:
Land & buildings
Land and buildings are initially recorded at cost and subsequently measured
using either the cost or revaluation model. Land is not depreciated as it has
an indefinite useful life while buildings are depreciated on a straight-line
basis over their estimated useful life. Impairment is assessed regularly, and
any impairment loss is recognized. Gains or losses on disposal are recognized
in profit or loss.
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 currently
available information. Changes in facts and circumstances may result in
revised estimates and actual results could differ from those estimates.
Going concern
As at 30 June 2024, the Group had a robust balance sheet with a modest debt
gearing with equity of US$278.3 million and loans and borrowings of US$124.8
million. Cash as at 30 June 2024 was US$39.9 million, with net debt of US$84.9
million. Investments in listed entities at the end of June 2024 amounted to
US$45.4 million which provided additional flexibility as these investments
could be converted into cash.
This robustness is underpinned by stable revenues generated on long term
contracts. Revenues generated on mine sites and longer-term contracts make up
the majority of Group revenues. Revenues continued to perform strongly in H1
2024 with increased revenue of 10% compared to H1 2023. While margins have
declined YoY, much of this is driven by the investment made across key growth
areas (Nevada, Gabon & MSALABS), which is setting the foundation for the
business to continue to grow in the years ahead.
Commercially, the Group continues to secure and extend long term mining
contracts with high quality customers, including the latest significant win
for both drilling and laboratories services in the USA with Nevada Gold Mines.
This contract with Nevada Gold Mines has only minorly contributed to Group
revenue as at 30 June 2024.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
1. Basis of presentation and accounting policies
Going concern (cont'd)
In determining the going concern status of the business, the Board has
reviewed the Group's forecasts for the 18 months to December 2025, 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. EBITDA would need to fall over 35% during the period of assessment
for going concern to breach the covenant test. Given the strong market demand
from existing high-quality clients and across a large tendering pipeline, the
Group's increased service diversification and the limited contract expiries
due during the year, management considers the risk of a deep demand reduction
to be low.
Given the Group's exposure to high-quality mine site operations, 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 (holding back dividends, sale of investments, capex
deferment) 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 December 2025.
Accordingly, the Board has concluded that the going concern basis in the
preparation of the Financial Statements is appropriate and that there are no
material uncertainties that would cast doubt on that basis of preparation.
As disclosed in note 18, after this going concern review was conducted the
Group sold certain investments on 14 August 2024 for proceeds of $31.2m. These
proceeds will primarily be used to pay down Group borrowings. The net debt
levels and interest service costs in the going concern forecasts and covenant
reviews noted above will therefore be reduced further, providing significant
additional cashflow and covenant headroom to that already noted above.
2. Operations in the interim period
Capital is incorporated in Bermuda. The Group provides drilling services,
mining (load and haul), mineral assaying and surveying services. The Group
also has a portfolio of investments in listed and unlisted exploration and
mining companies.
The Group's corporate headquarters are in the United Kingdom and it has
established operations in Canada, Côte d'Ivoire, Democratic Republic of
Congo, Egypt, Gabon, Ghana, Guinea, Kenya, Mali, Mauritania, Pakistan, Saudi
Arabia, Tanzania, United States of America and Zambia.
2.1 Use of estimates and judgements
The preparation of both annual and interim financial statements usually
requires the use of estimates and judgements. There has been no change in the
Group's estimates and judgements since the year end.
Six months ended
3. Revenue 30 June 2024 30 June 2023
US$'000 US$'000
Revenue from the rendering of services comprises:
Drilling and associated revenue 110,142 108,046
Revenue from Mining 36,342 27,153
MSALABS revenue 20,772 17,105
Revenue from Surveying 2,178 1,966
169,434 154,270
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
4. Taxation
Capital Limited is incorporated in Bermuda and tax resident in the United
Kingdom and the Group operates in multiple countries jurisdictions with
complex legal and tax regulatory environments. Taxation is calculated in
accordance with local legislation and the prevailing tax rates.
The Group has taken income tax positions that management believes are
supportable and are intended to withstand challenge by tax authorities. Some
of these positions are inherently uncertain and include those relating to
transfer pricing matters and the interpretation of income tax laws. The Group
periodically reassesses its tax positions. Changes to the financial statement
recognition, measurement, and disclosure of tax positions is based on
management's best judgement given any changes in the facts, circumstances,
information available and applicable tax laws. Considering all available
information and the history of resolving income tax uncertainties, the Group
believes that the ultimate resolution of such matters will not likely have a
material effect on the Group's financial position, statements of operations or
cash flows.
5. Earnings per share
30 June 2024 30 June 2023
Basic Earnings per share:
The profit and weighted average number of ordinary shares used in the
calculation of basic earnings per share are as follows:
Profit for the period used in the calculation of basic earnings per share 9,206 16,943
(US$'000)
Weighted average number of ordinary shares for the purposes of basic earnings 195,026,529 191,185,152
per share
Basic earnings per share (cents) 4.7 8.9
Diluted earnings per share: 30 June 2024 30 June 2023
The profit used in the calculations of all diluted earnings per share measures 9,206 16,943
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 195,026,529 191,185,152
earnings per share
- Dilutive share options (#) 968,276 2,271,535
Weighted average number of ordinary shares used in the calculation of diluted 195,994,805 193,456,687
earnings per share
Diluted earnings per share (cents) 4.7 8.8
(#) For the purposes of calculating diluted earnings per share, 968,276 share
options (2023: 2,271,535) were included based on being dilutive as the vesting
metrics were met at the period end.
( )
6. Dividends
During the six months ended 30 June 2024, a dividend of 2.6 cents per ordinary
share was declared on 14 March 2024, totalling US$5,102,685 (six months ended
30 June 2023: 2.6 cents per ordinary share, totalling US$5,101,010) and paid
on 15 May 2024.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
7. Property, plant and equipment
Cost Associated Drilling & mining equipment
Camp and associated equipment
Heavy mining equipment Vehicles and trucks Land & Buildings Computer software Leasehold improvements
Drilling rigs Total
US$'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) (530) - - - (21,884)
At 31 December 2023 148,242 81,860 41,377 47,018 27,043 - 52 1,654 347,246
Additions 14,044 1,936 6,613 6,114 4,038 4,628 14 - 37,387
Disposal (1,840) - (1,871) (662) (980) - - - (5,353)
At 30 June 2024 160,446 83,796 46,119 52,470 30,101 4,628 66 1,654 379,280
Accumulated Depreciation
At 1 January 2023 79,788 16,776 6,743 15,696 8,088 - 13 97 127,201
Depreciation 10,521 9,302 4,900 4,493 2,595 - 7 - 31,818
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 5,227 5,055 2,690 2,229 1,588 115 4 - 16,908
Disposal (1,794) - (1,870) (647) (929) - - - (5,240)
At 30 June 2024 76,330 31,133 10,680 21,003 10,875 115 24 97 150,257
Carrying amount at:
31 December 2023 75,345 55,782 31,517 27,597 16,827 - 32 1,557 208,657
30 June 2024 84,116 52,663 35,439 31,467 19,226 4,513 42 1,557 229,023
CAPITAL LIMITED
Notes to the Condensed Consolidated Interim Financial Statements (cont'd)
For the six months ended 30 June 2024
7. Property, plant and equipment (continued)
Bank borrowings are secured on the Group's drilling and mining
fleet - see Note 12.
The Group's property plant and equipment includes assets not yet commissioned
totalling US$41.9 million (2023: US$45.5 million). The assets will be
depreciated once commissioned and available for use.
During the six months ended 30 June 2024, the Group acquired US$37.4 million
worth of property, plant and equipment (HY 2023: US$39.4 million). Out of the
US$37.4 million additions, US$10.7 million (2023: US$6.6 million) was acquired
through supplier credit agreements, US$3.6 million through vendor financed
mortgage and US$3.0 million of unpaid trade payables. Additions in the cash
flow statements, US$ 16.0 million, consist of cash paid assets during the
period.
The Group disposed of property, plant and equipment with a net carrying amount
of US$0.1 million (2023: US$0.7 million) during the period. A loss of US$0.1
million (2023: US$0.3 million) was incurred on the disposal of property, plant
and equipment.
At the end of each reporting period, the Group reviews the carrying amounts of
its tangible assets to determine whether there is any indication that those
assets may be impaired. As at 30 June 2024, there was no indication of
impairment.
8. Leases (Group as lessee)
Details pertaining to leasing arrangements, where the
Group is lessee are presented below:
Land & Buildings Machinery Vehicles Total
Right of use assets US$'000 US$'000 US$'000 US$'000
At 1 January 2023 3,565 13,087 - 16,652
Additions 1,298 9,787 - 11,085
Depreciation (558) (2,580) - (3,138)
30 June 2023 4,305 20,294 - 24,599
At 31 December 2023 5,105 24,579 - 29,684
Additions 227 8,072 532 8,831
Depreciation (800) (4,494) (52) (5,346)
At 30 June 2024 4,532 28,157 480 33,169
Lease liabilities
At 1 January 2023 3,396 12,871 - 16,267
Additions 1,298 9,181 - 10,479
Interest expense 136 721 - 857
Lease payments (661) (2,830) - (3,491)
30 June 2023 4,169 19,943 - 24,112
At 31 December 2023 5,184 24,266 - 29,450
Additions 227 7,103 532 7,862
Interest expense 215 1,234 7 1,456
Lease payments (925) (5,035) (56) (6,016)
At 30 June 2024 4,701 27,568 483 32,752
The weighted average incremental borrowing rate applied to lease liabilities
during the period was 10% (2023: 10%).
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
As at
30 June 2024 31 December 2023
US$'000 US$'000
9. Other receivables
Prepayments 8,150 7,529
Capitalised contract costs 8,033 3,783
VAT recoverable 8,808 7,561
Amounts due from non-controlling interest 5,536 5,536
Accounts receivable - Sundry 3,640 4,025
Prepayment for fixed assets 11,038 5,318
Others 138 92
45,343 33,844
Current 33,261 24,055
Non-current 12,082 9,789
45,343 33,844
10. Issued capital and share premium
Authorised capital
2,000,000,000 (31 December 2023: 2,000,000,000) ordinary shares of 0.01 cents 200,000 200,000
(31 December 2023: 0.01 cents) each
Issued and fully paid:
196,257,124 (31 December 2023: 193,696,920) ordinary shares of 0.01 cents (31
December 2023: 0.01 cents) each
19 19
Share premium:
Balance at the beginning of the period 62,390 62,390
Issue of shares 2,329 -
Balance at the end of the period 64,719 62,390
Fully paid ordinary shares which have a par value of 0.01 cents, carry one
vote per share and carry rights to dividends.
11. Non-controlling interest
Below is a summary of the movement in non-controlling interest during the
period:
CMS (Tanzania) Ltd
MSALABS Ltd IACA Limited Total
US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2024 3,292 5,988 (10) 9,270
Profit/ (loss) attributable to NCI (761) 1,218 (28) 429
Change in ownership:
- Equity raise 822 - - 822
- Purchase of shares from NCI (30) - - (30)
Dividends paid (32) - - (32)
Balance at 30 June 2024 3,291 7,206 (38) 10,459
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
11. Non-controlling interest
CMS (Tanzania) Ltd
MSALABS Ltd IACA Limited Total
US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2023 2,688 2,891 (7) 5,572
Profit/ (loss) attributable to NCI (722) 1,398 (16) 660
Change in ownership:
- Equity raise 365 - - 365
- Rights issue 1,829 - - 1,829
- Purchase of shares from NCI (486) - - (486)
- Other 182 - - 182
Dividends paid (19) - - (19)
Balance at 30 June 2023 3,837 4,289 (23) 8,103
12. 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$65 million as at 30 June 2024 (2023: US$50
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
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 30 June 2024, the amount outstanding on the term
loan was US$25.0 million (2023: US$26.6 million).
During the period under review, the Group has complied with all covenants
attached to the term loan.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
12. Loans and borrowings (cont'd)
(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 9.50%. As at 30 June 2024, the total drawn
under these credit agreements was US$16.1 million (2023: US$15.8 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 30 June 2024 the balance
outstanding was US$3.3 million (2023: US$5 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 30 June 2024,
the balance outstanding was US$6.7 million.
No covenants are attached to this facility.
(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 30 June 2024, the balance outstanding was
US$4.4 million.
During the period under review, the Group has complied with all covenants
attached to the facility.
(f) US$3.7m Mortgage with Byington Family Trust
The Group entered into 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
30 June 2024, the balance outstanding was US$3.6 million
No covenants are attached to this facility.
As at
30 June 2024 31 December 2023
US$'000 US$'000
Bank loans 92,034 78,385
Supplier credit facilities 30,637 25,813
Vendor financed mortgage 3,663 -
126,334 104,198
Less: Unamortised debt arrangement costs (1,547) (1,625)
Total loans and borrowings 124,787 102,573
Current 29,623 27,052
Non-current 95,164 75,521
Total loans and borrowings 124,787 102,573
At the reporting date, the Group's loans and borrowings total US$126.3 million
(2023: US$104.2 million), offset by unamortised debt costs of US$1.5 million
(2023: US$1.6m). US$0.9 million (2023:US$ 0.8m) of the debt costs have been
classified as current and US$0.7 million (2023:US$ 0.8m) as non-current.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
13. Note supporting the Statement of Cash Flows
Six months ended
13.1 Cash generated from operations 30 June 2024 30 June 2023
US$'000 US$'000
Profit before taxation 16,330 23,413
Adjusted for:
- Depreciation, amortisation and impairments 16,909 15,895
- ERP Costs written off 676 -
- Loss on disposals 113 694
- Fair value loss/(gain) on financial assets 493 (843)
- Share-based payment 765 2,034
- Interest income (46) (17)
- Finance costs 8,202 5,814
- Depreciation of right-of-use assets 5,346 3,138
- Unrealised foreign exchange loss / (gain) on foreign cash held 1,128 (346)
- Other non-cash items 481 638
- (Decrease)/Increase in expected credit loss provision (6) 1,454
- Bad debts written off 385 218
- Release of provisions - (721)
Operating profit before working capital changes 50,776 51,371
Adjustments for working capital changes:
- Decrease / (increase) in inventory 306 (4,898)
- Increase in trade and other receivables (5,274) (11,362)
- Increase in trade and other payables 12,471 7,970
- Decrease in provisions - (1,429)
58,279 41,652
Reconciliation of borrowings and leases
13.2
Loans & borrowings Lease liabilities Total
US$'000 US$'000 US$'000
At 1 January 2024 104,198 29,450 133,648
Cash flows:
- Drawdowns 20,000 - 20,000
- Interest paid (5,577) (1,456) (7,033)
- Principal repayments (12,463) (4,560) (17,023)
Non-cash flows:
- supplier credit facility received 10,665 - 10,665
- Vendor financed mortgage 3,680 - 3,680
- Interest expensed during the period 5,830 1,456 7,286
- Unamortised debt arrangement costs (1,546) - (1,546)
- Additions to leases - 7,862 7,862
At 30 June 2024 124,787 32,752 157,539
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
13. Note supporting the Statement of Cash Flows (continued)
Reconciliation of borrowings and leases (Cont'd)
13.2
Loans & borrowings Lease liabilities Total
US$'000 US$'000 US$'000
At 1 January 2023 75,619 16,267 91,886
Cash flows
- Drawdowns 25,000 - 25,000
- Interest paid (3,741) (857) (4,598)
- Principal repayments (9,210) (2,634) (11,844)
Non-cash flows
- supplier credit facility received 6,613 - 6,613
- Interest expensed during the period 4,250 857 5,107
- Unamortised debt arrangement costs (1,732) - (1,732)
- Additions to leases - 10,479 10,479
At 30 June 2023 96,799 24,112 120,911
14. Segmental analysis
Operating segments are identified on the basis of internal management reports
regarding components of the Group. These are regularly reviewed by the board
in order to allocate resources to the segments and to assess their
performance. Operating segments are identified based on the regions of
operations. 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, mining services,
surveying, IT support services and mineral assaying.
- Rest of world: Derives revenue from the provision of drilling services, surveying, IT support
services and mineral assaying. The segment relates to jurisdictions which
contribute a relatively small amount of external revenue to the Group. These
include Saudi Arabia and Canada.
Information regarding the Group's operating segments is reported below. At 30
June 2024, management reviewed the composition of the Group's operating
segments and the allocations of operations to the reportable segments.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
14. Segmental analysis
Segment revenue and results:
The following is an analysis of the Group's revenue and results by reportable
segment:
For the six months ended 30 June 2024 Africa Rest of World Consolidated
US$'000 US$'000 US$'000
External revenue 148,870 20,564 169,434
Segment profit / (loss) 52,939 (10,617) 42,322
Central administration costs and depreciation (17,343)
Profit from operations 24,979
Fair value gain on financial assets (493)
Interest income 46
Finance costs (8,202)
Profit before tax 16,330
For the six months ended 30 June 2023 Africa Rest of World Consolidated
US$'000 US$'000 US$'000
External revenue 142,776 11,494 154,270
Segment profit / (loss) 54,494 (9,725) 44,769
Central administration costs and depreciation (16,403)
Profit from operations 28,366
Fair value gain on financial assets 844
Interest income 17
Finance costs (5,814)
Profit before tax 23,414
The accounting policies of the reportable segments are the same as the Group's
accounting policies described in note 1. Segment profit/(loss) represents the
profit/(loss) earned by each segment without allocation of central
administration costs, depreciation, interest income, share of losses from
associate, finance charges and income tax. This is the measure reported to the
board for the purpose of resource allocation and assessment of segment
performance.
The following customers from the Africa segment contributed 10% or more to the
Group's revenue:
30 June 2024 30 June 2023
% %
Customer A 31% 35%
Customer B 15% 17%
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
14. Segmental analysis (continued)
As at
30 June 2024 31 December 2023
US$'000 US$'000
Segment assets:
Africa 618,523 567,699
Rest of world 255,502 92,454
Total segment assets 874,025 660,153
Head office companies 364,956 338,507
1,238,981 998,660
Eliminations * (724,797) (530,912)
Total assets 514,184 467,748
Segment liabilities:
Africa 259,612 257,526
Rest of world 112,701 61,173
Total segment liabilities 372,313 318,699
Head office companies 394,036 373,103
766,349 691,802
Eliminations * (530,491) (497,201)
Total liabilities 235,858 194,601
For the purposes of monitoring segment performance and allocating resources
between segments the board 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 intra-group accounts receivable, intra-group accounts
payable and intra-group investments.
Other segment information:
Six months ended
Non-Cash items included in profit or loss: 30 June 2024 30 June 2023
US$'000 US$'000
Depreciation
Africa 19,118 17,581
Rest of world 2,912 1,188
Total segment depreciation 22,030 18,769
Head office companies 225 253
22,255 19,022
Loss on disposal of property, plant and equipment
Africa 100 687
Rest of world - -
Total segment loss on disposal 100 687
Head office companies 13 7
113 694
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
14. Segmental analysis (continued)
Six months ended
30 June 2024 30 June 2023
US$'000 US$'000
Impairment on Inventory
Africa
Stock Provision 472 (689)
Stock Write Offs 24 317
496 (372)
Rest of world
Stock Provision 10 5
Stock Write Offs (1) -
9 5
Total segment impairment 505 (367)
Head office companies - 826
505 459
15. Commitments As at
30 June 2024 30 June 2023
The Group has the following capital commitments at 30 June: US$'000 US$'000
Committed capital expenditure 26,482 25,192
16. Contingencies
As a result of the multiple jurisdictions in which the Group operates, there
are a number of ongoing tax audits. In the opinion of Management, with the
exception of the matters identified below, none of these ongoing audits
represent a reasonable possibility of a material settlement and as such, no
contingent liability disclosure is required.
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
17. Financial instruments
(a) Fair value hierarchy
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 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included 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 3: inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs).
As at
30 June 2024 31 December 2023
US$'000 US$'000
Level 1 - Listed shares 45,379 44,756
Level 3 - Unlisted shares and derivative financial assets 2,401 2,398
47,780 47,154
The reconciliation of the investment valuations from 1 January 2024 to 30 June
2024 is as follows:
Level 1 Level 3 Total
US$'000 US$'000 US$'000
At 1 January 2024 44,756 2,398 47,154
Additions 5,404 - 5,404
Disposal (4,894) - (4,894)
Fair value gain/(loss) 113 3 116
At 30 June 2024 45,379 2,401 47,780
Level 1 Level 3 Total
US$'000 US$'000 US$'000
At 1 January 2023 30,435 8,292 38,727
Additions 7,238 2,020 9,258
Disposal (3,313) (1,083) (4,396)
Fair value (loss)/gain 3,512 53 3,565
Transfer from level 3 6,884 (6,884) -
At 31 December 2023 44,756 2,398 47,154
CAPITAL LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONT'D)
For the six months ended 30 June 2024
17. Financial instruments (Continued)
(b) Fair value information
Level 1 shares
Market approach - Listed share price.
The Company's interests in various listed shares are valued at the 30 June
2024 closing prices. No secondary valuation methodologies have been considered
as all the Company's investments are listed on active markets.
Level 3 shares
The Group's investments held at Level 3 are valued either on a net asset
approach or cost approach.
Net asset approach
Management applied a net asset valuation methodology at 30 June 2024 for
certain unlisted investments based on the Group's share ownership percentage
of the unlisted company's net asset value. The unlisted company publishes some
of its significant net asset value information and management then derives the
investment at fair value attributable to the Group.
Cost approach
Management holds all other unlisted investments at cost where this represents
the best estimate of fair value.
(c) Fair values of other financial instruments
Level 3 derivative financial assets
The Group's derivative financial assets consist of call options to acquire
additional shares in a non-listed entity. The financial assets have been
valued using the Black Scholes option pricing model by comparing the key
assumptions in the model to a peer group.
18. Investment in associate
In H1 the Group completed a US$6.6 million strategic investment in Eco
Detection Pty Ltd ("ECO"), acquiring a 22% ownership stake in the company. ECO
is incorporated in Australia and produces analysis systems for monitoring
water quality. Due to the percentage owned by the Group being greater than
20%, this investment has been accounted for in accordance with IAS 28, as an
investment in associate rather than as an investment at fair value.
19. Events post the reporting date
On 14 August 2024 the Group announced the sale of its entire shareholding in
Predictive Discovery Limited ("PDI") (being 225,349,418 shares ("Sale
Shares")) to Perseus Mining Limited ("Perseus") for total cash consideration
of AU$ 47.3 million (A$ 0.21 per Sale Share), equivalent to US$ 31.2 million.
The agreement with Perseus includes a profit share arrangement whereby Capital
and Perseus have agreed to share (on a 50/50 basis) the profit, if any,
derived by Perseus from a subsequent sale by Perseus of the Sale Shares to any
third party that occurs on or prior to 31 December 2025.
In addition, should Perseus make a takeover offer for PDI on or prior to 31
December 2025 at a price of greater than A$0.21 per ordinary share in PDI,
then Capital will have a call option to acquire back from Perseus the Sale
Shares for the original sale price, subject to Capital's commitment to accept
the takeover offer for PDI in respect of such Sale Shares.
CAPITAL LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITY
For the six months ended 30 June 2024
The directors are responsible for the maintenance of adequate accounting
records and the preparation and integrity of the condensed consolidated
interim financial statements and related information.
The directors are also responsible for the Group's systems of internal
financial control. These are designed to provide reasonable, but not absolute,
assurance as to the reliability of the financial statements, and to adequately
safeguard, verify and maintain accountability for the Group's assets, and to
prevent and detect misstatement and loss. Nothing has come to the attention of
the directors to indicate that any material breakdown in the functioning of
these controls, procedures and systems has occurred during the six months
under review.
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 FCA's Disclosure and
Transparency Rules DTR4.2.4R;
b) the interim management report includes a fair review of the information
required by DTR4.2.7R and DTR4.2.8R; and
c) there have 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 2023.
The condensed consolidated interim financial statements have been prepared on
the going concern basis since the directors believe that the Group has
adequate resources in place to continue in operation for the foreseeable
future.
The condensed consolidated interim financial statements were approved by the
board of directors on 14 August 2024.
ON BEHALF OF THE DIRECTORS
Jamie Boyton
Chairman of the Board of Directors
Peter Stokes
Chief Executive Officer
CAPITAL LIMITED
Principal and Emerging Risks and Uncertainties
Risk is inherent in our business and can manifest in many forms. Capital is
committed to effective risk management to best achieve its business
objectives.
The identification, management and reporting of risk uses formal risk
management processes to improve decision-making and minimise the impact of an
event occurring that may influence our corporate strategy, as well as
operational and project activities.
By understanding and managing risk, we believe we provide greater certainty
and confidence for our shareholders, employees, customers, suppliers, and for
the communities in which we operate.
Our risk management approach includes:
· Establishing a standard approach to the management of risk and to
the acceptable levels of risk throughout the business.
· Establishing a consistent process and methodology for
identifying, assessing, and ranking risks in conducting our business
activities.
· Ensuring compliance with applicable laws, regulations and
governance standards in all areas of our operations.
· Regularly monitoring our major areas of risk exposure and setting
requirements for our personnel to proactively identify risk.
· Responsibility and accountability for risk management is
allocated at all levels of the organisation, from frontline employees up to
the Board level.
Our top ranked risks are listed below and are those risks that are assessed as
having a residual risk rating of high or above within Capital's ERM Framework.
Area Description Mitigation
General reduction in levels of activity across the mining industry The Group is highly dependent on the levels of mineral exploration, The Group is seeking to balance this risk by building a portfolio of long-term
development and production activity within the markets in which it operates. mine-site contracts, expanding its services offering into mine-site based
activities such as load and haul mining, and also expanding both its client
A reduction in these activities, or in the budgeted expenditure of mining and base and geographic reach.
mineral exploration companies, will cause a decline in the demand for mining
services. The Group's operations are generally focused on mine sites, with limited
exposure to exploration-only activities which can be more volatile.
Capital has strong existing relationships with our clients at both executive
and operational levels which helps ensure that the Group is aware of and
prepared for potential changes and well placed to identify new opportunities
as they arise with our key business partners.
The Group's strategic focus is on blue-chip, high-quality clients with long
term project commitments that are inherently less susceptible to industry
fluctuations.
CAPITAL LIMITED
Principal and Emerging Risks and Uncertainties (continued)
Area Description Mitigation
Enterprise Resource Planning (ERP) system failure The Group's existing ERP system is monitored and supported by internal Capital's staff are experienced in maintaining the current ERP which minimises
technical staff as it is no longer maintained by the publisher, SAGE. system downtime.
The system requires regular downtime for routine maintenance during which time The implementation of a new, modern ERP system, Microsoft Dynamics, is well
the system is unavailable to support the business. progressed and expected to begin to replace the existing system during 2024.
Risk to cash repatriation Restrictive currency controls in certain The Group maintains multiple bank
operating jurisdictions can impact the
accounts in jurisdictions where cash
Group's ability to repatriate cash.
repatriation can prove challenging,
which can provide greater access to
foreign currency payments.
The Group maintains strong relations
with its key transactional banking
partners and any new country entry
process includes specific due diligence
requirements relating to the operation of the banking system.
Risk of key contract Some contracts can be terminated for convenience by the client without Key contracts include agreed notice
termination penalty.
periods as well as demobilisation and/
or termination fees where a contract is terminated for reasons beyond the
Group's control.
Contract renewal negotiations are
commenced well in advance of the
expiry of fixed term contracts.
Strong client relationships help the Group to better understand the needs of
our clients and partner with them to continue to meet their current and future
needs.
Decline in mine-site A significant proportion of the Group's The producing mines which account for
production levels
revenue is derived from producing mines which carry their own risks and can be
a significant proportion of the Group's
subject to, for example, unforeseen changes in mine plans due to geological or
revenue tend to have long-term mine
technical challenges, changes to a client's operational budget or broader
plans and well understood geology.
strategic objectives and
changes in global commodity prices
Many contracts include fixed fee elements which help mitigate the revenue
impact of short-term reductions in activity levels.
The Group focuses on ensuring operational excellence and seeks continuous
improvement to increase our overall value proposition as a strategic partner
for our clients.
CAPITAL LIMITED
Principal and Emerging Risks and Uncertainties (continued)
Area Description Mitigation
Deterioration in health The Group's operations are subject to Health and Safety is an absolute priority
and safety record
various health and safety risks associated
for the Group.
with drilling and mining including, in the
case of individuals, personal injury and Overseen by the Board, the HSSE Committee, the CEO and senior management team
potential loss of life; and, in the Group's provide strategic leadership in this area and lead a programme of open and
case, interruption or suspension of site honest communication with employees at all levels and in all areas of the
operations due to unsafe operations. business.
Some of the Group's safety initiatives, including those around training and
monitoring as well as the innovative Safety Risk Leadership Walk, are detailed
on our website and have contributed to safety milestones such as 15 years LTI
free at our Mwanza facility.
Over exposure to one commodity sector Gold is an important commodity that contributes significantly to the Group's The Group seeks to secure long term
order book and tender pipeline.
contracts with blue-chip clients (e.g. five-year drilling extension with
Centamin at Sukari, new two-year grade control contract with Perseus at
Price and demand fluctuations in this single commodity could have a material Sissingue).
impact on Capital's financial performance
The Group's exposure to other commodities has increased in recent years and
Capital continues to actively seek opportunities with a focus on transition
materials (e.g. the Reko Diq copper/gold project).
CAPITAL LIMITED
Principal and Emerging Risks and Uncertainties (continued)
Area Description Mitigation
Reduction in value of equity investment Through Capital Investments, the Group holds investments in a portfolio of By diversifying its holding into a portfolio of investments in various
portfolio both publicly traded and private companies. companies, the Group aims to mitigate the risk from a significant devaluation
of a single investment holding.
The accounting value of these investments is marked to market at each
reporting date and the fair value adjustment is accordingly recorded in the Following the listing of Allied Gold Corporation during 2023, the Group's
profit and loss account as an unrealised gain or loss. investment in private companies is considered immaterial.
The value of the investments will change and could materially alter both the The portfolio is subject to a robust governance structure, with the Group's
Group's reported net assets and net profit position. Investment Committee being required to include at least one Independent
Non-Executive Director.
The committee actively monitors existing investments for performance and
ongoing strategic alignment.
New investments are required to satisfy a number of criteria. In the event the
fair value of investments gives rise to an unrealised loss, while this would
affect the Company's net assets and profitability, it would not affect
cashflow or give rise to any going concern implications.
Geographical risk The Group operates in a number of jurisdictions where social unrest and The Group is seeking to continue to diversify its operations geographically
resulting economic turbulence are common, both of which have the ability to including, for example, recent significant new contracts in North America.
significantly
disrupt operations and threaten safety and security of Capital's assets and
personnel.
The Group has considerable practical experience in operating successfully in
many jurisdictions and plans are in place to secure the safety of personnel in
the event of significant security issues.
Safety and security are key considerations in the Group's due diligence
processes when considering entry into new jurisdictions or significant
additional investment into existing jurisdictions. Depending on the findings
of the due diligence process, Board approval may be required in order to
proceed.
CAPITAL LIMITED
Principal and Emerging Risks and Uncertainties (continued)
Area Description Mitigation
Limited access to new funding sources Inability to access bank debt and/or inability to access equity capital from Capital is focused on capital efficiency and maintaining balance sheet
the market. flexibility. The Group prioritises building and maintaining strong
relationships with banks as well as our existing OEM finance providers such as
Debt facilities not available in time to support the ongoing growth of the CAT, Sandvik and Epiroc.
business.
The Group has expanded its portfolio of bank lenders to include Nedbank, one
of Africa's premier banks. The increase in the revolving credit facility from
$50 million to $75 million in the period provides additional balance sheet
flexibility to deliver on future growth opportunities.
Senior management continues to engage regularly with shareholders.
Energy transition Capital is subject to both risks and opportunities associated with the global The Group continuously assesses developments in low-carbon technology and how
energy transition and climate change. these developments can be appropriately introduced into our operating model
and existing fleet.
Traditional diesel-powered mining equipment will be replaced by more energy
efficient, low-carbon alternatives.
Increasing production in the battery minerals sector is critical to support Senior management are in regular contact with OEM manufacturers. The Executive
the global transition to lower carbon technologies and slow adoption of these Leadership Team (ELT) members have significant experience and knowledge in
new technologies may represent a risk to the Group's overall growth strategy. their operational field and maintain a strong awareness of industry
developments.
Recognising the importance of seeking low-carbon alternatives to meet client
requirements, electric underground rigs are already in use by the Group in
Tanzania and a number of electric vehicles have been acquired for use as
support vehicles in the Group's Nevada operations.
Growth in demand for battery minerals has already provided new contracts and
represents a further growth and diversification opportunity for the Group.
We are harnessing other energy transition opportunities, which include our
joint venture with Enerwhere - Mine Power Solutions, which can provide modular
solar hybrid power systems to the mining sector.
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 period.
The following terms and alternative performance measures are used in the half
year results release for the six months ended 30 June 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
Adjusted NPAT Net profit after tax before fair value gain/loss on investments
ADJUSTED EPS Net profit after tax before fair value gain/loss 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:
Six months ended
30 June 2024 30 June 2023
US$'000 US$'000
ARPOR can be reconciled from the financial statements as per the below:
Revenue per financial statements (US$) 169,434 154,270
Non-drilling revenue (US$) (63,868) (50,061)
Revenue used in the calculation of ARPOR (US$) 105,566 104,209
Monthly Average active operating Rigs 86 93
Monthly Average operating Rigs 125 124
ARPOR (rounded to nearest US$10,000) 204 188
Operating profit (pre-exceptional items) can be reconciled from the financial
statements as per the below:
Profit for the period 9,635 17,603
Taxation 6,695 5,810
Interest income (46) (17)
Finance charges 8,202 5,814
Exceptional items: ERP implementation costs 1,654 -
Fair value adjustments 493 (844)
Operating profit (pre-exceptional items) 26,633 28,366
Gross profit 74,486 70,954
Administration expenses (27,252) (23,565)
Exceptional items: ERP implementation costs 1,654 -
Depreciation (22,255) (19,023)
Operating profit (pre-exceptional items) 26,633 28,366
CAPITAL LIMITED
APPENDIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (UNAUDITED)
EBITDA can be reconciled from the financial statements as per the below:
30 June 2024 30 Jun 2023
US$'000 US$'000
Profit for the period 9,635 17,603
Depreciation 22,255 19,023
Taxation 6,695 5,810
Interest income (46) (17)
Finance charges 8,202 5,814
Exceptional items: ERP implementation costs 1,654 -
Fair value adjustments 493 (844)
EBITDA 48,888 47,389
Operating profit (EBIT) 24,979 28,366
Depreciation, amortisation and impairments 22,255 19,023
Exceptional items: ERP implementation costs 1,654 -
EBITDA 48,888 47,389
Gross profit 74,486 70,954
Administration expenses (27,252) (23,565)
Exceptional items: ERP implementation costs 1,654 -
EBITDA 48,888 47,389
30 June 2024 30 Jun 2023
US$'000 US$'000
Adjusted net profit and adjusted EBITDA can be reconciled from the financial
statements as per the below:
Operating profit (EBIT) 24,979 28,366
Exceptional items: ERP implementation costs 1,654 -
Interest income 46 17
Finance charges (8,202) (5,814)
Taxation (6,695) (5,810)
Adjusted net profit 11,782 16,759
Profit for the period 9,635 17,603
Exceptional items: ERP implementation costs 1,654 -
Fair value adjustments 493 (844)
Adjusted net profit 11,782 16,759
EBITDA (adjusted for IFRS 16 leases)
EBITDA 48,888 47,389
Lease payments (6,016) (3,492)
EBITDA (adjusted for IFRS 16 leases) 42,872 43,897
CAPITAL LIMITED
APPENDIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (UNAUDITED)
30 June 2024 30 Jun 2023
US$'000 US$'000
Basic EPS (Adjusted for investment gain/(loss) and exceptional items can be
reconciled as per below:
Profit for the period attributable to owners of the parent 9,206 16,943
Fair value adjustments 493 (844)
Exceptional items: ERP implementation costs 1,654 -
Adjusted Profit for the period 11,353 16,099
No. No.
Weighted average number of ordinary shares for basic earnings per share 195,026,529 191,185,152
Basic EPS (Adjusted for investment gain/(loss) and exceptional items (cents) 5.8 8.4
30 June 2024 31 December 2023
US$'000 US$'000
Net debt can be reconciled from the financial statements as per the below:
Cash and cash equivalents 39,915 34,366
Loans and borrowings - Non-current (95,853) (76,328)
Loans and borrowings - Current (30,481) (27,870)
Net debt (86,419) (69,832)
CAPITAL LIMITED
APPENDIX: GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (UNREVIEWED)
(Continued)
EBITDA
EBITDA represents profit or loss for the period before interest, income taxes,
depreciation & amortisation, fair value gain or loss on financial assets
through profit or loss and exceptional items.
EBITDA is a non-IFRS financial measure that is used as supplemental financial
measure by management and external users of financial statements, such as
investors, to assess our financial and operating performance. This non-IFRS
financial measure 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
charges, fair value adjustment on financial assets at fair value through
profit and loss and realised gain (loss) on fair value through profit and loss
investments, which may significantly affect comparability of results of
operations between periods.
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 from how we do, limiting their usefulness as a
comparative measure.
EBITDA (adjusted for IFRS 16 leases)
EBITDA (adjusted for IFRS 16 leases) represents profit or loss for the year
before interest, income taxes, depreciation & amortisation, fair value
adjustments on financial assets at fair value through profit and loss and
realised gain (loss) on fair value through profit and loss investments and net
of cash cost of the IFRS 16 leases.
Net cash (debt)
Net cash (debt) is a non-IFRS measure that is defined as cash and cash
equivalents less short term and long-term debt.
Management believes 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 different purposes and are often calculated in ways that reflect the
circumstances of those companies. Accordingly, caution is required when
comparing net asset value per share as reported by the Group to net asset
value per share of other companies.
Average revenue per operating rig
ARPOR is a non-financial measure defined as the monthly average drilling
specific revenue for the period divided by the monthly average active
operating rigs. Drilling specific revenue excludes revenue generated from shot
crew, a blast hole service that does not require a rig to perform but forms
part of drilling. Management uses this indicator to assess the operational
performance across the board on a period-by-period basis even if there is an
increase or decrease in rig utilisation.
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