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Master Drilling sees 32% increase in headline earnings per share

30th March 2015

By: Anine Kilian

Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – JSE-listed Master Drilling’s headline earnings a share increased to $0.12 in the year ended December 31, 2014, compared with $0.10 a share the year before.

Revenue rose to $132.03-million in the year under review, compared with $119.69-million in 2013.

At a presentation of the company’s results on Monday, CEO Danie Pretorius told shareholders that net cash generated from operating activities had increased by 52.9% to $23.8-million.

He added that operating conditions across Master Drilling’s geographic footprint were challenging, with performance affected by a volatile commodity cycle.

“Notwithstanding the tough environment, Master Drilling delivered impressive full-year earnings, helped by a growth strategy focused on organic growth, a diverse footprint and commodity mix,” Pretorius stated.

He further outlined that the South African and Latin American businesses had continued to deliver solid revenue for the company during 2014, contributing 34% and 50% of revenue respectively from the provision of specialised drilling services to major, midtier and junior mining and exploration companies across different commodities.

By the end of last year, Master Drilling was actively operating 139 drilling rigs across Southern Africa, Latin America and West Africa.

“Master Drilling’s commodity mix strategy of a 30% limit exposure to any commodity helped lift its revenue. Notably, in the year under review, exposure to the gold sector decreased from 36% in the previous year to 32%, while activity in iron-ore increased significantly from 1% in 2013 to 20% as at December 31,” Pretorius pointed out.

He further noted that operating performance was in line with expectations and that Master Drilling’s geographic and commodity diversification strategy had paid off.

“As a result, our performance was resilient against a backdrop of a volatile commodity cycle and tough global economic trading environment,” he said.

He commented that the company had a solid $216-million two-year order book.

OUTLOOK
Looking ahead, the global operating environment was expected to remain challenging. Master Drilling would continue to focus on geographical diversification and a diversified commodity mix to ensure its future growth.

Additionally, it would pursue organic growth opportunities in Mexico, Peru and Colombia, in response to the global mining industry’s focus on greater levels of mechanisation.

“We intend to solidify our global position by strengthening and consolidating our position in existing markets through focused organic growth and strategic acquisitions, expanding into new markets as well as enhancing operational efficiencies, while continuing with our dedicated focus on quality and safety,” concluded Pretorius.
 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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