Master Drilling grows order book

Master Drilling – a global specialist drilling company servicing the mining sector – has lifted its order book to $213.5m at the end of June against $169m a year ago, the firm said on Tuesday.

Master Drilling grows order book

Publication: BDlive
Source: www.bdlive.co.za
Journalist: Charlotte Mathews

Master Drilling – a global specialist drilling company servicing the mining sector – has lifted its order book to $213.5m at the end of June against $169m a year ago, the firm said on Tuesday.

The growth defies trends in an industry where even large mining companies are cutting back on capital spending to weather weak commodities prices.

The main contracts won by the South African-headquartered group, which listed on the JSE last December, are a five-year exploration drilling contract for Kumba Iron Ore’s Kolomela mine and new work in Mali and Guatemala.

Master Drilling provides services to companies which are exploring, building capital projects and in production. About two-thirds of its revenue was earned in Latin America and about a third in Africa.

In the six months to June the company earned $54.1m in revenue compared with a pro forma $45.7m in the same period last year. It was not trading in its present form a year ago so it has used comparative figures from its prospectus. Headline earnings almost doubled to 5.1 US cents from 3.2 US cents but no dividend was declared, in line with previous guidance from management.

At the end of June, Master Drilling held $13.9m in cash, down from $49.6m at the end of December. About $18m of the listing proceeds have been spent on capital equipment and funds have also been used to repay a previous shareholder and trade creditors.

Expenditure on new machinery would help Master Drilling to expand into new territories, CEO Danie Pretorius said.

The firm is also working on innovations in automation, using in-house technology which will enable it to fully automate insertion and removal of drill rods and remote controlled spanners by the end of the year. “The efficiency of raiseboring is expected to be 30% higher while productivity, based on results from the group’s first live automated project in South America during 2013, could potentially double as mechanisation and automation advance.”

He said Master Drilling’s growth would be through expanding its services, consolidating its position in existing markets and forming joint ventures and partnerships.