Master Drilling Finds New Revenues as South Africa Struggles
Master Drilling Group is a drilling technology solutions-based company that have expanded to delivering their services globally.
Currently, the drilling company is moving away from business in South Africa due to their current economic struggles, and more towards endeavors outside of the country, including to new countries presenting them with opportunities such as in Australia and Russia with the sole purpose to boost their revenue.
Danie Pretorius, the Chief Executive, reported that the current local domestic macroeconomic environment has remained uncertain for the first two quarters of 2019. This has been primarily due to businesses, market players, and investors holding back on their investments in the country after national elections in May 2019.
The Group has been focusing on gaining potential opportunities abroad, all while stabilizing their new operations, as well as growing their presence in more economically stable countries.
The Master Drilling Group’s Success Abroad
Thus far, the Group has reported a significant 3.8% increase in their revenue stream, which reached R1.03 billion ($70 million), during the first two quarters of 2019. They have also been positively impacted by the Atlantis Group, while at the same time managing profit decreases by 8.3%, which accounts for $11.8 million.
The company has also acquired the South African multinational mining contracting company, which specialize in raise boring, blind boring, along with a range of other drilling services, that accounted for R107.5 million in 2018.
Profit after tax also fell with 14.7% to $8.3 million, while earning per share decreased by 14.3% to 5.4 US cents. Eps on local currency, which also declined with 1% to 76.7 cents, based on a stronger rand than the same period last year.
Master Drilling Group’s net cash generation also decreased to $9.3 million, which has followed investments in working capital, with the purpose to cater for increased volumes of work, based on new streams of new projects across the Group. According to the Group, 81.4% of capital spent, has been on capacity expansion, while the remaining 18.6% has been allocated for maintenance capital. The Group’s debt has also increased to $61.3 million, from $60.2 million, introducing more reason for the Group to seek work beyond South African borders.
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