The reception area of the Johannesburg Stock Exchange. File picture: Leon Nicholas
The reception area of the Johannesburg Stock Exchange. File picture: Leon Nicholas
DURBAN - Master Drilling said the up-tick in the global economy and commodity cycle was expected to have a positive impact on its business in the future, despite going through a rough patch in the 12 months to the end of December.

Chief executive Danie Pretorius said the group’s pipeline remained very strong.

He said the group was now focused on its entry into India and Australia, to diversify its geographical exposure further.

“The recent acquisition of Bergteamet Raiseboring Europe provides a launch pad for further expansion in Europe,” Pretorius said. “There are many synergies between the two companies, and this business complements our focus on providing innovative tailored technology solutions to our clients.”

The group delivers drilling technologies worldwide and has built relationships with blue-chip and mid-tier companies in the mining, civil engineering and construction sectors across various commodities for more than 30 years.

It recently strengthened its footprint in Europe by exercising its call option on the remaining 60percent of the shares in Bergteamet Raiseboring Europe, which is based in Sweden.

Pretorius said the group expected to reap the rewards with new launches.

“We are particularly proud of the launch of our Mobile Tunnel Borer in February 2018. This disruptive technology allows continuous mining and requires no blasting, significantly enhancing mining efficiencies,” he added.

Revenue

In the results for the year to the end of December, the group reported a 2.8percent increase in revenue to $121.4million (R1.45billion), while operating profit decreased marginally to $24.8m.

The group said this was positive, given that one of its machine categories, the XX-large machines category, was utilised only 40percent.

Pretorius added that, despite 2017 having been a challenging year, with various political changes across the world and a tough local macro-economic environment, they delivered stable operational results in 2017.

The continued focus on working capital had borne fruit in the form of satisfactory cash generation.

The group’s share price shed more than 5percent to R12.73 on the JSE during the day on Tuesday after the release of its results. However, it recouped some losses to close at R13.50.

Pretorius said that, because of continuous technological innovation, the group was well positioned to expand its service and product offering into other industries and regions, despite escalating cost pressures in the mining sector.

“New management strategies and actions implemented in some challenging regions have turned most of our under-performing businesses around. As a result, we expect an improvement in most global regions where we do business during the next reporting period,” Pretorius said.

- BUSINESS REPORT