LSE-listed Capital Drilling exceeded the top end of its revenue guidance of $105-million to $115-million for 2018, on the back of a strong performance at its West African contracts.
It earned $116-million in revenue.
The company had 91 rigs deployed at the end of the year, compared with 93 rigs at the end of 2017.
Gold drilling constitutes 90% of the company’s contracts.
Capital received a five-year contract extension at London-listed Centamin’s Sukari gold mine, in Egypt, as well as a one-year contract extension at AngloGold Ashanti’s Geita gold mine, in Tanzania.
The company started a 6 000 m drilling contract with Sama Resources, in Côte d'Ivoire, and a programme of up to 30 000 m of aircore drilling with Strandline Resources, in Tanzania.
“Capital’s trading performance in 2018 was strong, particularly in the second half of the year, which saw the company accelerate its penetration into the fast growing West African mineral drilling industry.
“The quality of our business improved further, with zero lost-time injuries recorded, in addition to some material contract extensions with some of our longstanding blue-chip customers,” executive chairperson Jamie Boyton said on Thursday.
He added that an improvement in equipment use, specifically in exploration contracts, as well as the prudent management of working capital across the group, had translated into improved cash generation over prior periods, further strengthening the company’s balance sheet.
“The current year has started strongly with solid tendering activity in West Africa, where we are benefitting from the infrastructure investment that we have made over the past 12 to 18 months."
The company will release its full financial results on March 14, which will include revenue guidance for 2019.
Boyton expects global trade tensions will further impact on financial markets and, consequently, lead to a reduction in capital market activities and, to a lesser extent, base metals markets.
These developments, if sustained, have the capacity to dampen activity levels in the mining and exploration sectors; however, so far, the company has experienced higher-than-expected demand.