https://www.miningweekly.com
Africa|Business|Contractor|Exploration|Gold|Mining|Resources|Services|Underground|Equipment|Operations
Africa|Business|Contractor|Exploration|Gold|Mining|Resources|Services|Underground|Equipment|Operations
africa|business|contractor|exploration|gold|mining|resources|services|underground|equipment|operations

Capital reports strong first-half performance

20th August 2020

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

Font size: - +

Mining services company Capital Limited recorded revenue of $65.1-million for the half-year ended June 30, an increase of 18.8% compared with the first half of 2019, and of 8.5% compared with the second half of 2019.

The company attributes its strong first-half performance to operations across the group’s long-term mine site contracts, including Kinross Gold’s Tasiast operation, in Mauritania; Resolute Mining’s Syama and Yanfolila mines, in Mali; Hummingbird Resources' operations in Mali; Allied Gold’s Bonikro operation, in Côte d’Ivoire; Centamin’s Sukari mine, in Egypt; Barrick Gold’s North Mara mine, in Tanzania; AngloGold Ashanti’s Geita operation, in Tanzania; and Barrick’s Jabal Sayid operation, in Saudi Arabia.

Capital executive chairperson Jamie Boyton says the company delivered a strong first-half performance, despite the unprecedented challenges presented by the Covid-19 pandemic.

He says a key contributor to the company’s strong result for the half has been returns from its equity investments.

“These have been a business development tool for several years with Capital completing direct investments into exploration and mining companies. This strategy has been successful, both in securing preferred contractor status with multiple companies and the provision of equity returns.”

Boyton adds that, during the second quarter of this year, these investments delivered material unrealised returns of $9.9-million.

Capital’s earnings before interest, taxes, depreciation and amortisation (Ebitda) also increased by 21.3% year-on-year to $15.4-million.

Despite higher labour costs associated with the management of Covid-19, reflecting the sustained focus on cost management, Ebitda margins increased from 23.2% in the first half of 2019, to 23.7% in the first half of this year.

The company also reports net gains from equity investments (unrealised) of $9.9-million for the six months under review, which served to increase the value of group strategic investments to $23.2-million.

During the six months, Capital recorded a net profit after tax of $13.6-million (including investment gains) – a material increase of 166.7% compared with the first half of 2019.

In terms of capital expenditure, the company spent $7-million on sustaining capital expenditure, upgrading of support equipment and the purchase of an additional underground drill rig.

Net cash generated from operations were $7-million, which was down from the $10.5-million generated in the first half of 2019. This is attributable to the decrease in asset prepayments, increased inventory and receivables timing. This leaves the company with net cash of -$100 000.

Capital's earnings a share (including investment gains) improved by 170.5%, to $0.10, which is up from the earnings a share of $0.037 reported for the first half of 2019.

Further, the company declared an interim dividend of $0.09 apiece, to be paid on September 25 to shareholders.

Boyton says activity undertaken during 2018, and in particular 2019, to build the pipeline and relocate assets into West Africa ensured the company was well placed to start the year contributing further to this outstanding result, with the region contributing 31% of total revenues during the period.

He adds that a robust increase in Ebitda and earnings a share reflect the ongoing strong performance of the company's underlying operations. “Our long-term contract portfolio strengthened further with the award of a two-year contract with Hummingbird in Mali.”

In addition, Boyton notes that the company was awarded extensions at three existing long-term contracts with Resolute in Mali, Barrick’s Tanzania-based North Mara operation and at AngloGold Ashanti’s Tanzania operation, representing a positive reflection of its performance delivery at these sites.

Meanwhile, Capital’s laboratory business, MSALABS also performed well.

During the half-year period, it significantly increased its West African presence through the establishment of new laboratories in Côte d’Ivoire and Mauritania.

“The region now contributes more than 50% of MSALAB’s revenue and is shifting the geographic focus for the business,” he points out.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Alco-Safe
Alco-Safe

An unmanned breathalyser that is made to be tough and simple to use. Can be used in any environment for operator-free breathalyser testing.

VISIT SHOWROOM 
Condra Cranes
Condra Cranes

ISO-certified Condra manufactures overhead cranes, portal cranes, cantilever cranes and crane components: hoists, drives, end-carriages, brakes and...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.132 0.166s - 93pq - 2rq
Subscribe Now