Master Drilling Group reports a 399% half year profit increase amid global uncertainty

JSE-listed international drilling technology and services group Master Drilling Group increased taxed profit by a sharp 399% to $18.1 million in the six months to June 30.

Revenue increased 4.9% to $133.2m. Headline earnings a share increased 6.7% to 9.6 US cents. Headline earnings per share in rands were up 4.7% to 176.6 cents.

The revenue pipeline by the end of the period stood at $515m. The committed order book was $305.6m. The company usually pays a dividend at year-end.

"Master Drilling is pleased to report a resilient first six months of 2025. This accomplishment comes against a backdrop of global market and economic uncertainty,” said the CEO Danie Pretorius, in a statement.

He said that despite some pressure on profitability, they were grateful for the support of their clients and business partners. He said Master Drilling management's commitment to capital discipline was a key driver of positive returns.

“We are proud to see our new drilling and cutting technologies gain traction and make a significant impact on the mining industry,” he said.

In addition to their core technologies, asset-light digital ventures had been invested in.

“These initiatives, including proximity detection solutions and integrated data and resource management systems tailored for mining operations, have not only improved our financial performance, but have also created new opportunities for the group,” he said.

The group had provided for an impairment loss on the Mobile Tunnel Boring Machine in 2024, as no formal agreement was in place to project future cash flows, due to uncertainty over commodity prices within the machine's target industry.

However, in the first half of 2025, a contract to commence operations of the Mobile Tunnel Boring Machine was finalised. This change represented an indicator of reversal of impairment.

The recoverable amount of the asset was reassessed, resulting in a partial impairment reversal of $4.7m from the impairment loss of $7.8m recognised in the prior year. This partial impairment reversal was a main driver in an overall increase in profit after taxation of 399%.

Net cash from operations amounted to $11m. Cash resources continued to be managed "diligently" to cater for opportunities that require specific design, planning, and investment, he said.

Master Drilling's total capital spend of $13.9m was applied 41% on expansion and 59% on sustaining the existing fleet.

Debt decreased to $45.4m from $48m

. The gearing ratio increased from 6.3% to 10.5%.

In South America, significant growth and development of operations was underway. The group was capitalising on a regional transition towards underground mining and a focus on strategic minerals and ESG practices.

Service offerings were being expanded through a new joint venture, and new business with both existing and prospective clients was being explored.

In Central and North America, operations were undergoing a turnaround, with robust intervention plans that had stabilised finances, resolved legacy issues, and positioned the region's profitability in recent years.

In Africa, operations were in a state of flux, with added pressure from a major project that had been placed on hold and from another operation that had ceased as a result of diamond price pressures.

“However, a new contract has been awarded, prompting mobilisation of additional equipment. The group anticipates strong, continued growth, with more machines being mobilised to key mines as well as a first-of-its-kind unit successfully launched in this region,” said Pretorius.

In the Rest of the World region, profitability exceeded expectations. New contracts were awarded.

“Master Drilling is confident in its ability to perform well. This confidence stems from several factors. First, our long-term contracts provide a stable foundation. Second, we have diversified our footprint across various regions, commodities, currencies, and industries,” said Pretorius.

A strong emphasis was being placed on technological advancements, such as the commissioning of the Project Desert Elephant, the group’s version of a surface core drilling rig, equipped with a robotic hand.

“We are now in a position to finalise for production, which is in time for upcoming proposals,” Pretorius said.

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