DURBAN – The Master Drilling Group has set its sights on new opportunities in Russia and Australia to boost its revenue as its home market of South Africa continues to struggle with low economic growth.
Chief executive Danie Pretorius said the local domestic macroeconomic environment remained mixed in the first half of 2019 as market players, businesses and investors held back on investments ahead of the national elections in May.
“In the face of continued uncertainty and volatility… we have worked hard to position our existing businesses across regions, while stabilising new operations and growing our presence in new territories where we believe opportunities will arise, such as in Russia and Australia,” Pretorius said.
Master Drilling delivers innovative drilling technologies and has built partner relationships with blue-chip major and mid-tier companies in the mining, hydro-electric energy, civil engineering and construction sectors across various commodities worldwide.
The group reported a 3.8 percent increase in revenue to $70 million (R1.03 billion) in the six months to end June positively impacted by the acquisition of the Atlantis Group while operating profit decreased 8.3 percent to $11.8m.
Master Drilling acquired the South African multinational mining contracting company specialising in raise boring, blind boring and other drilling services for R107.5m last year.
Profit after tax fell 14.7 percent to $8.3m, and earnings per share (Eps) declined by 14.3 percent to 5.4 US cents a share while Eps on SA currency declined by 1 percent to 76.7c on a stronger rand compared to the same time last year.
The group said net cash generation decreased to $9.3m, following the investments in working capital to cater for higher volumes of work coming on stream involving new projects across the group.
The group said 81.4 percent of its capital spend was on capacity expansion, with the remaining 18.6 percent allocated towards maintenance capital.
Its debt increased slightly to $61.3m during the period, up from $60.2m.
The group did not pay an interim dividend, in line with its policy to pay dividend at year-end.
Pretorius said the business remained stable and has made good progress in the last reporting period.
“At Master Drilling we continue to spearhead technological development, stabilise our global footprint and explore new business opportunities. As a result, the business remains stable and well positioned,” Pretorius said.
Master Drilling shares closed flat on the JSE on Tuesday at R11.