Capital (CAPD) H2 2024 earnings summary

Executive summary

• Achieved record revenue of $348 million in 2024, up 9.3% year-over-year, despite lower EBITDA, cash from operations, and profits due to contract conclusions, ramp-up challenges, and delayed project ramp-ups.

• Major mining contracts at Sukari, Ivindo, and Belinga concluded in Q3 2024, impacting profitability; early termination fees were received for Ivindo.

• MSA Labs' growth slowed in H2 2024 due to delayed commissioning and lower utilization, but is expected to rebound in 2025 with new contracts and lab rollouts.

• Nevada Gold Mines drilling contract faced higher staff turnover and slower ramp-up, but operational improvements and a new lab are underway.

• Management changes and cost initiatives implemented across divisions to drive future profitability and business development.

Financial highlights

• 2024 revenue reached $348 million, a 9.3% increase year-over-year, near the lower end of guidance.

• EBIT for 2024 was $39.3 million, down 34.9% year-over-year; EBIT margin fell to 11.3% from 18.9%.

• Return on capital employed dropped to 14.2% in 2024.

• Cash CapEx for 2024 was $38.5 million; total CapEx including OEM finance and property was $68 million.

• Gross debt at year-end was $112 million, with net debt at $75.7 million and RCF drawn to $60 million.

• Dividend held flat at $0.013 per share; total dividend declared was 2.6cps.

Outlook and guidance

• 2025 revenue guidance is $300–$320 million, reflecting a temporary dip before ramp-ups in mining and labs.

• MSA Labs revenue expected to grow 30% to $50–$60 million in 2025, with profitability anticipated in H2.

• CapEx guidance for 2025 is $45–$55 million, a significant reduction from prior years.

• Reko Diq mining contract expected to ramp up in Q2 2025, absorbing redeployed fleet from Gabon and Sukari.

• Nevada Gold Mines drilling and MSA Labs' Nevada operations expected to improve performance and utilization.