Capital Limited · LSE:CAPD
Capital — Capital Drilling — H1 2013 Earnings Presentation
25 slides from Capital's earnings presentation, Aug 19, 2013
Slide 1: Capital Drilling Limited First Half 2013 Results Presentation
Capital Drilling Limited First Half 2013 Results Presentation August 2013
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Capital Drilling Ltd. (the “Company”), nor shall any part of it nor the fact of its distribution
Slide 3: First Half 2013 Financial Performance
First Half 2013 Financial Performance
Slide 4: Financial Overview
Financial Overview Change Revenue KPIs H1 2013 H1 2012 FY 2012 % Continued strength in cash generation from operations Average Fleet Size 92 87 6 88 of $11.3m Fleet Utilisation (%) 64 75 (15) 76 ARPOR ($) 192,000 197,000 (3) 192,000 Balance sheet strengthened: Reported Earning H1 2013 H1 2012 Ch
Slide 5: Revenue KPI's
Revenue KPI’s Fleet Growth Utilization No of rigs 83% 84% 90% 84% 100 93 85 80% 79% 75% 76% 79% 83% 80% 74 70% 66% 64% 74% 80 65% 62% 60% 66% 60 60% 59% 50% 57% 60 49 40% 30% 40 25 20% 19 20 11 10% 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Jan'06 Jan'07 Jan'08 Jan'09 Jan'10 Jan'11 J
Slide 6: Earnings and Margins
Earnings and Margins Gross Profit and Margins EBITDA and Margins US$m US$m 30.0 45% 25.0 30% 41.1% 28.2% 27.3% 27.5% 38.6% 26.5% 40% 25.0 36.3% 35.2% 25.0% 25% 32.6% 35% 20.0 24.9% 31.4% 33.3% 20.2% 20.0 32.6% 30% 18.5% 20% 28.1% 15.0 25% 18.8% 15.0 15% 20% 10.0 10.0 15% 10% 10% 5.0 5.0 5% 5% 0.0 0%
Slide 7: Balance Sheet
Balance Sheet H1 2013 FY 2012 Change Lower returns with weaker operating performance Balance Sheet $m $m % » Return on total assets 9% (2012 : 16%) Cash and cash equivalents 6.7 9.1 (26) » Return on invested capital 8% (2012 : 15%) Receivables & Other current assets 30.9 34.1 (10) Balance sheet
Slide 8: Net Debt Movement
Net Debt Movement H1 2013 Net Debt Movements 25 20.0 13.44 20 Finance & Tax payments $3.7m 15.0 15 Working capital outflow $2.7m 2.60 10 2.80 0.53 0.94 3.27 0.89 5 0.15 4.85 - Opening Net Debt H1 2013 EBITDA Non-cash expenses Increase in Increase in Decrease in Decrease in trade Finance charges Taxa
Slide 9: Strategic Initiatives
Strategic Initiatives Li CAPITAL D
Slide 10: Operational & Strategic Highlights
Operational & Strategic Highlights Youngest “scale” fleet in the industry: 91 rigs with an average age of less than 4 years Substantial reduction in capital investment allowing free cash flow to be directed to debt repayment Maintained elevated levels of utilization at 64% for H1 2013, well ab
Slide 11: Key Priorities and Progress
Key Priorities and Progress PRIORITY PROGRESS Significant reduction in group headcount Focus on cost reduction Closure of non-core operations & offices Range of other costs initiatives Deliver operational Changes in senior management excellence Upgrading and up-skilling of staff Solid ca
Slide 12: Operating Cost Savings
Operating Cost Savings Reduced group headcount by 328 from December 2012 (down 25% over H1) Labour & Management June 30 headcount 1,005 (30-35% of expenses) Reduction of wage bill of c40% on 2012 Strengthen focus on improving skill levels across group Stock & Consumables Established centra
Slide 13: Capital Expenditure
Capital Expenditure CAPITAL EXPENDITURE H1 2013 CAPEX of $2.6 million, a substantial US$m reduction on prior years (H1 2012: 15.8m) 35.0 30.0 Well capitalized fleet with $55 million spent over 2011 & 2012 25.0 20.0 Disciplined capital allocation process conducted 15.0 by the Asset Management C
Slide 14: Outlook
Outlook Challenging outlook: » Cautious spending from mining companies » Juniors remain absent from the market » Concerns on slower growth in emerging markets » Continued pressure on commodity prices Subdued tendering activity in Africa and Latin America » However contract wins with high quality
Slide 15: Appendices
Appendices » Company Overview » Safety » Market » Corporate
Slide 16: Quality Service: Excellence in Drilling
Quality Service: Excellence in Drilling People Our key asset, strong focus on KPI goals and career path progression Training and career development programs provided by Capital Support Services (training division) Hire from local communities, strong focus on cultural awareness Equipment Subs
Slide 17: Quality Partners & Projects
Quality Partners & Projects 100% 6% 4% 1% Quality Clients 7% 13% 14% 90% 23% 34% Exposure to major and mid tier mining houses with strong balance sheets, 80% 30% quality assets & positive cash flows 35% 41% 70% Majors contributed 65% of H1 2013 earnings 60% 53% 50% Contribution from majors has
Slide 18: Quality, Long Term Clients
Quality, Long Term Clients Well Capitalised Clients Client Market Caps1 Location Commodity Active Since Type of Drilling US$1.0bn Tanzania Gold December 2008 E, D, P, U US$5.3bn Tanzania Gold April 2007 E, D, P US$18.8bn Zambia Copper July 2006* E, D, P US$174.3bn Chile Copper April 2013 E, D US$0.6
Slide 19: Rig Locations
Rig Locations Mauritania Egypt Since 2010 Since 2005 6 rigs 24 Rigs Ghana Solomons Since 2011 Since 2008 6 rigs 3 Rigs Chile Since 2010 10 rigs Zambia Tanzania Since 2005 Since 2005 25 Rigs 17 Rigs Current Operations Regional Offices Registered Offices/Previous Operations * June2013 Geographical div
Slide 20: Safety Performance
Safety Performance Capital Drilling Progressive AIFR The Group’s primary KPI pertaining to incident frequency rates is the All Injury Frequency Rate (AIFR) 7.00 6.00 5.92 Strong safety culture & commitment driven from Senior Management through to ground personnel. 5.00 4.00 Five projects achie
Slide 21: Demand Environment
Demand Environment 60 Gold1 Fundraising by mining companies 52.8 2,000 50 1,600 47.9 47.2 More than 1,200 US$/oz 44.0 US$250 billion in 42.1 800 equity raisings 40 400 by mining companies since 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2006 Gold Spot 12-Month Trailing 3
Slide 22: Management & Board
Management & Board Executive » Over 15 years experience in finance industry » 25 years experience in the mining industry in » Co-founder of Capital Drilling Africa and Australia » Previously Executive Director and Head of Asian » Co-founder of Capital Drilling Equity Syndication and Corporate Brokin
Slide 23: Corporate Snapshot
Corporate Snapshot Capital Structure Shareholding Blocks Fully paid ordinary shares 134,592,800 Share price (as at 14 August 2013) USD 0.31 Free float Market capitalisation (undiluted) ^ USD 41.14m 30% Cash (as at 30 June 2013) USD 6.69m Founding Shareholders Debt (as at 30 June 2013) *includes bank
Slide 24: Glossary
Glossary The following words used in the presentation have the following meaning: ARPOR Average Revenue Per Operating Rig LTM Last Twelve Months Earnings Before Interest and Taxes/Profit from NAV Net Asset Value EBIT operations Earnings Before Interest, Taxes, Depreciation/Profit from Short Term and
Slide 25: Company Contact Details
Company Contact Details Capital Drilling Limited UK Broker Details Jamie Boyton Liberum Capital Limited Executive Chairman and Interim CEO Ropemaker Place, Level 12, 25 Ropemaker Street, London, EC2Y 9LY [email protected] Telephone: +44 (0) 20 3100 2000 Clayton Bush Email: clayton.bush@liber