Master Drilling’s sales pipeline more than doubled to $601.6 million (R8.8 billion) by the end of the six months to June 30 compared with $281.4bn in 2020 after rising commodity prices resulted in mines optimising reserves and production, chief executive Danie Pretorius said yesterday.
The committed order book for the remainder of 2021 and beyond stood at $232m versus $144.6m at the same time in 2021. Pretorius said in a telephone interview that the order had never been so high, and mines were investing in improving output rather than new large mines being developed.
Headline earnings per share for the six months increased 63.6 percent in rands to 87.2 cents from 53.3 cents. Profit in dollars increased 97.8 percent to $9.1m from $4.6m. Revenue increased 25.4 percent to $72m from $57.4m.
The company, which delivers drilling and data-driven technology solutions to companies in the mining, hydroelectric, civil engineering and construction sectors, in 26 countries currently, saw increased demand this year from the uptick in commodity prices and increased capital spend by clients.
“Master Drilling has seized the opportunity presented by this trend and continued on its growth strategy, including the acquisition of interests in two digital businesses, AVA Solutions and the A&R Group, to complement its offering.”
Pretorius said the acquisitions were part of a strategy to address opportunities to optimise mining by providing better services in terms of digital connectivity, visibility and transparency, underground. Traditionally, mines, which might have thousands of employees working underground, rely on verbal communication among themselves underground, and with above-ground staff.
The aim was to enhance and improve mining safety, while optimising operations, he said.
In the six months the company expanded with new contracts in west Africa, Australia, Russia, Europe, and North America. The expansion also ensured that the exposure to commodities experiencing significant upswing continued, thereby driving increased mining activity.
The full impact of the pandemic remained unclear - the company for instance still faced challenges in logistics from container shortages and port delays - but it had continued to diversify across regions, commodities, currencies and industries.
Net cash remained flat with a slight increase to $11.2m. Cash resources continued to be managed prudently for opportunities that required specific design, planning and investment.
He said the South African mining sector still provided isolated opportunities, but it was shrinking in overall terms and new capital expenditure in the sector was not forthcoming.
edward.west@inl.co.za
BUSINESS REPORT