Capital (CAPD) H2 2024 earnings summary

Executive summary

• Achieved record revenue of $348 million in 2024, up 9.3% year-over-year, but experienced declines in EBITDA, cash from operations, and profits due to contract conclusions, ramp-up delays, and investment cycle.

• Major mining contracts at Sukari, Ivindo, and Belinga ended in Q3 2024, impacting profitability; Gabon contract terminated early due to client reprioritization.

• MSA Labs and Nevada Gold Mines contracts faced delays and slower-than-expected ramp-ups, affecting revenue and margins.

• Significant non-cash impairments and exceptional items impacted earnings in the second half.

• Signed LOI for Reko Diq, a Tier 1 copper project expected to drive future growth.

Financial highlights

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

• Adjusted EBITDA declined 12.9% to $80 million; EBIT was $39.3 million, down 34.9% year-over-year; EBIT margin fell to 11.3%.

• Effective tax rate rose to 58% in 2024 due to higher contributions from high-tax jurisdictions and startup losses.

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

• Net debt stood at $75.7 million (0.95x adjusted EBITDA); RCF drawn to $60 million.

Outlook and guidance

• 2025 revenue guidance is $300 million–$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, reaching full run rate in 2026.

• Focus on operational delivery and margin recovery as ROCE dropped to 14.2% in 2024.