Master Drilling’s losses cushioned

Global drilling company Master Drilling said a stronger rand resulted in an 8.3% drop in operating profit for the sixmonths to end-June, but it received a revenue boost from its acquisition of SAbased Atlantis.

Master Drilling, which is based in Fochville to the west of Johannesburg, said conditions in SA remained constrained as it reported a 14.7% drop in interim profit after tax to $8.3m.

The company’s foreign exchange movements on revenue were less than its impact on cost, resulting in profit after tax decreasing.

Revenue in dollars rose 3.8% during the period, however, boosted by its acquisition of Atlantis, which has operations in SA, India, Brazil and Zambia.

Master Drilling, which gets a third of its revenue from Africa, said local conditions remained challenging, and it was continuing with its strategy of diversifying across geographies and sectors.

“The domestic macroeconomic environment remained mixed in the first half of 2019, with market players, businesses and investors holding back decisions ahead of the national elections in May,” the statement read.

“Although the elections yielded the anticipated result, the new dispensation’s work to place the economy on the recovery track is extensive.”

Master Drilling chief executive Danie Pretorius said the group would be seeking to grow its presence in Russia and Australia, but cited volatility in global trade as a headwind.

“It is heartening that in this uncertain environment our pipeline of new business remains strong, as does interest in our innovative technology,” Pretorius said.

Master Drilling had a committed order book of $198m by the end of June, up from $114m in the prior period, and a pipeline of potential orders of $297m.