Tough conditions sink Master Drilling’s headline earnings by over 30%

CAPE TOWN – Master Drilling Group, a global leader in drilling services to the mining, civil engineering and building construction sectors, Tuesday reported a 30.5 percent decline in headline earnings per share to 53.3 cents in the six months to June 30, after tough operating conditions in the 23 countries in which it operates through the Covid-19 pandemic.

Revenue fell 17.9 percent to $57.4 million (R966m), while profit fell 40.7 percent to $4.6m. The balance sheet was well managed with cash from operating activities up 100 percent to $11.1m from $5.5m, while capital expenses were curtailed. No dividend was declared.

The committed order book of $144.6m was slightly lower than at the same time last year, but the group anticipated it would begin to improve again in about six to eight months as the group began to benefit from the current upward cycle in commodities prices, chief executive Danie Pretorius said in a telephone interview.

“The group entered the year facing a challenging operating environment and deteriorating economic fundamentals across many of the 23 countries in which we operate. However, our quick response to the unprecedented disruptions in mining activity due to government-imposed lockdowns to curb the spread of Covid-19 ensured our financial stability and profitability,” he said.

He said the diversification of the group across commodities and across countries paid off during the tough period, with for instance, mining continuing without interruption in Scandinavian countries, and mining less impacted by the virus in some African countries.