DDH1 expands fleet

NEWLY listed drilling contractor DDH1 has further added to its fleet as demand for its services continues to rise.
DDH1 expands fleet DDH1 expands fleet DDH1 expands fleet DDH1 expands fleet DDH1 expands fleet

Image courtesy of DDH1

In its recent prospectus, DDH1 committed to add a further 11 rigs during the current financial year, but will bump that number up to 115.

The company expects to have 103 rigs in its fleet by the first half of the 2022 financial year.

The first two of the additional four rigs will be operational this financial year.

DDH1 CEO Sy Van Dyk said the purchases demonstrated the company's confidence in the Australian mineral drilling sector.

"As we highlighted in our prospectus, DDH1 is experiencing strong industry growth with rising demand for our services because of increased exploration, development and production spending by minerals exploration and mining companies," he said.

"DDH1 had already committed to adding 11 surface drilling rigs to our industry leading fleet. However, based on feedback from our customers and in response to their outstanding exploration successes, DDH1 has exercised an opportunity to secure a further 4 rigs.

"This additional investment is based on contracted demand and will provide increased capacity to service our clients across the DDH1 Drilling, Ranger Drilling and Strike Drilling brands."

DDH1 raised A$150 million in its initial public offering earlier this month.

The company has 102 clients, including Newcrest Mining, BHP, Evolution Mining, Gold Fields, IGO, Northern Star Resources, Newmont Corporation, Ramelius Resources, Rio Tinto, Roy Hill Holdings and St Barbara.

DDH1 has forecast revenue of $280.2 million, pro-forma EBITDA of $69.3 million and net profit after tax of $30 million for the 2021 financial year, and expects to declare a dividend.

Shares last traded at 90c, valuing the company at $308.5 million. IPO shares were issued at $1.20 each.