Master Drilling reports stellar interim performance

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Master Drilling reports stellar interim performance

JSE-listed Master Drilling has reported a 47.9% year-on-year increase in attributable profit to $13.4million for the six months under review, compared with $9.1million in the prior corresponding six months.

The firm’s CEO Danie Pretorius announced that this has been one of the best interim periods in its 36-year history in the six months ended June 30, with all business units having contributed positively to earnings, while healthy demand for drilling services continued globally.

Headline earnings a share were up from $0.06 in the prior comparable period to $0.088, while net cash from operating activities increased by 19% year-on-year from $11.2million in the prior half-year to $13.4million in the reporting period. The company has a committed order book of $242millon and a revenue pipeline of $540million.

In line with the company’s past practice, Master Drilling has decided it best to consider an appropriate dividend only at year-end. The company expects a stable revenue stream to come from Mali, but cautions that a shipping embargo is making it difficult to get equipment in and out of the country.

Progress

Democratic Republic of Congo recorded a satisfactory performance in the reporting period, with additional opportunities for work in the copper and cobalt mines. Projects in Tanzania on the other hand projects further growth in the next few years, with the country eventually becoming a hub for the company in East Africa.

The company’s operations in Zimbabwe and Zambia are performing up to expectation, as are those in Botswana and Sierra Leone. The South African operations had a steady start to the year but had subsequently been impacted heavily by the wage negotiation strike at Sibanye-Stillwater’s gold mines, which started in March and was resolved in June.

Meanwhile, Master Drilling is growing its presence in Australia and Central Asia, with a focus on raise boring. The company is also looking to expand its footprint in North America, on top of existing contracts in Canada and incoming work in the US and Mexico. The company has witnessed an uptick in mining activity in South America since the start of 2020, on the back of higher commodity prices, and there are various drilling projects and prospects in the region, including in Peru, Brazil and Chile.

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