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Audited annual financial statements for the year ended 31 December 2025
MASTER DRILLING GROUP LIMITED
Registration number: 2011/008265/06
Incorporated in the Republic of South Africa
JSE share code: MDI
ISIN: ZAE000171948 LEI: 37890095B2AFC611E529
("Master Drilling" or "Group" or "Company")
AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
SALIENT FEATURES FOR THE PERIOD
- USD Revenue increased by 7.8% to a record high USD292.0 million
- USD Headline earnings per share increased by 5.1% to 18.4 cents
- ZAR Headline earnings per share increased by 1,4% to 329,0 cents
- USD Earnings per share increased by 77.2% to 20.2 cents
- ZAR Earnings per share increased by 71,3% to 361,1 cents
- Stable order book of USD371.4 million
- Record pipeline of USD997.8 million
- Dividend decision deferred until there is more certainty on how the possible consequences of current global hostilities may unfold
REGULATORY REQUIREMENTS
The contents of the short form announcement are the responsibility of the Board of
Directors of Master Drilling. Master Drilling posts information that is important to investors
on the main page of its website at www.masterdrilling.com and under the "Investors" tab
on the main page. The information is updated regularly, and investors should visit the
website to obtain important information about Master Drilling. This short form
announcement and the results contained in this short form announcement have been
prepared in compliance with the JSE Limited's Listings Requirements.
The annual financial statements for Master Drilling Group Limited for the period ended
31 December 2025 have been audited by BDO South Africa Incorporated, the Company's
independent external auditors, whose unmodified audit report is available on:
www.masterdrilling.com and https://senspdf.jse.co.za/documents/2026/JSE/ISSE/MDI/FY2025.pdf
The annual financial statements have been prepared by the corporate reporting staff of
Master Drilling, headed by Willem Ligthelm CA(SA), the Group's financial manager. This
process was supervised by Andre Jean van Deventer CA(SA), the Group's chief financial officer.
Any investment decision by investors and/or shareholders should be based on consideration
of the full announcement as available on www.masterdrilling.com. The full announcement is
also available at the Company's registered office (for inspection, at no charge, during office
hours on any business day).
Dividend
The Board concluded that, whilst the requirements for being able to pay a dividend are met,
the significant global uncertainty caused by hostilities in various parts of the globe, including
the recent outbreak of war between Iran and The United States of America, and by the
resultant current and potential further responses of various countries to these situations,
makes it advisable to defer a dividend decision until there is more certainty on how these
situations and their possible consequences may unfold. The Board will consider declaring a
dividend as soon as that becomes possible, which may be by way of a special dividend
rather than a normally scheduled dividend.
A gross dividend of 65,0 cents per share in ZAR terms relating to the 2024 financial year was
declared and paid during June 2025. Any dividend unclaimed after a period of three years
from the date on which the same has been declared to be payable shall be forfeited and
revert to the Company.
There are no arrangements under which future dividends are waived or agreed to be waived.
Changes to the Board
There were changes to the Board since the previous reporting period. BJ Jordaan
resigned effective 1 May 2026. FG Dixon will also cease to act as alternate director
to BJ Jordaan effective 1 May 2026.
COMMENTARY
Master Drilling is pleased to report a resilient year in 2025, achieving a record high of
USD 292.0 million in revenue, a 7.8% increase over the prior period, despite ongoing global
economic uncertainty.
While profitability faced some pressure attributable primarily to specific operational
challenges, the Group maintained satisfactory cash generation and suitable balance sheet discipline.
About Master Drilling
Master Drilling was established in 1986 and listed on the Johannesburg Stock Exchange
Limited (JSE) in 2012. The Group delivers innovative drilling technologies and mining
solutions. Master Drilling has built trusted partner relationships with blue-chip and mid-tier
clients in the mining, hydro-electric energy, civil engineering, as well as construction sectors
worldwide. The Company is exposed to various key commodities that ensure its
sustainability. The Master Drilling business model of providing drilling solutions and mining
services to clients through tailor-made designs, coupled with a flexible support and logistics
chain, makes it the preferred partner throughout the life cycle of projects.
Commenting on the results for the year ended 31 December 2025, Danie Pretorius, Chief
Executive Officer of Master Drilling, said:
"Master Drilling is pleased to report a resilient year in 2025, achieving a record high of
USD 292.0 million in revenue, reflecting an 7.8% increase. This accomplishment comes against a
backdrop of global market and economic uncertainty.
While profitability faced some pressure, we are grateful for the continued support of our
valued clients and business partners. Our commitment to capital discipline continues to
deliver positive returns.
Master Drilling remains dedicated to technological advancements. We are proud to witness
our new drilling and cutting technologies maturing and impacting the mining industry. We
are steadfast in our vision of "making a difference" by enhancing safety, productivity, and
cost-effectiveness in the sector.
Beyond our core technologies, we have strategically invested in asset-light digital ventures.
These initiatives encompass proximity detection solutions and integrated data and resource
management systems specifically designed for mining operations. These ventures have not
only contributed to our financial performance but have also opened doors to exciting new
opportunities for the Group, ensuring continued relevance and solidifying our position as a
leading innovator.
Master Drilling has capitalised on its established client and partner relationships, along with
our global presence, to achieve business growth. We recognise the value of fostering strong
relationships, which has empowered us to deliver a wider range of turnkey solutions to our
clients. This approach has transformed Master Drilling into a more comprehensive contractor.
The Company remains optimistic about the future. However, we will continue to prioritise
responsible practices with a focus on capital allocation, cost control and operational excellence."
Financial Overview
Revenue increased 7.8% to USD292.0 million and operating profit increased by 57.2% to USD46.5 million.
USD earnings per share (EPS) increased 77.2% to 20.2 cents, and ZAR EPS increased 71,3% to
361,1 cents. USD headline earnings per share (HEPS) increased 5.1% to 18.4 cents, and ZAR
HEPS increased 1,4% to 329,0 cents. The higher % increase in EPS, compared to the %
increase in HEPS, is primarily due to the Group partially reversing the previously recognised
impairment loss in respect of the mobile tunnel boring machine, following finalisation of a
contract to commence operations with this machine. Based on this contract's projected cash
flow, the recoverable amount has been estimated at USD4.6 million, resulting in the reversal
not increasing the asset's carrying amount above the amount that would have been
determined had no impairment loss been recognised previously.
Net cash generated from operations amounted to USD17.9 million. Cash resources continue
to be managed carefully to cater for emerging opportunities that require specific design,
planning and investment.
Master Drilling's total capital spend of USD20.6 million was applied as follows: 66% on
expansion and 34% on sustaining the existing fleet.
Debt increased from USD48.0 million to USD60.4 million and the gearing ratio, including
cash, increased from 6.3% to 9.1% in the 2025 fiscal year. The increase in debt is due to the
Group's banking facilities that were renewed during December 2025.
Operational Overview
Globally, Master Drilling's operations experienced a profitable year, demonstrating the
benefits of significant capex investment over the past years.
Safety and response to risk
The Group has an extensive risk management program, and this is made visible through a
collaborative platform. Progress on the implementation of mitigation measures is tracked,
and significant business risk is escalated to the executive team and Board.
South America
The current year marked a period of significant operational expansion and technological
milestones. Regional growth is headlined by the commencement of a landmark paste fill
project and the introduction of advanced directional steering and low-profile drilling units.
Strategic partnerships have strengthened our competitive positioning for new contracts and
large-scale expansions.
While certain territories are navigating recovery from previous safety-related delays and
working to resolve outstanding accounts, the broader portfolio remains robust.
Diversification into shotcrete services and high-capacity drilling solutions has driven record
revenue, exceeding previous years. With a high volume of tenders currently under
adjudication and new projects scheduled for 2026 and beyond, the Group is well-positioned
to achieve its revised growth targets and further solidify its technical leadership in the sector.
Central and North America
2025 reflected a period of stable performance characterised by strengthened operational discipline,
maturing safety culture, and strategic commercial positioning. Despite facing currency volatility and
revenue fluctuations at the start of the year, the business achieved a broadly neutral operational
result by the end of the period. This stability was supported by a cautious forecasting approach and
a robust order book comprised of high-confidence commitments. Safety remained a primary focus,
with the implementation of structured corrective-action tracking and behavioural-safety programs
effectively addressing equipment-related incidents and enhancing site-wide risk management.
Africa
Africa has been a stronghold for the Group in the past couple of years and the current year
was no exception. The Group continues to see Africa as a key market for growth and is
actively looking for new business opportunities. The region continues to experience good
performances. While some projects face temporary delays and financial challenges, others
demonstrate robust growth and new contract acquisitions. Africa is positioned for
significant expansion, driven by successful project execution and strategic growth initiatives.
Operational efficiencies are being realised through localised agreements and streamlined
manufacturing processes. Overall, the African region presents both opportunities and
challenges, requiring adaptable strategies to navigate market fluctuations and capitalise on
growth prospects.
South Africa
Our business in this region achieved exceptional financial growth in 2025, significantly
surpassing projected revenue targets and demonstrating a strong upward trajectory
anticipated to continue into 2026. This success was achieved while maintaining a consistent
zero-harm safety record, highlighting a steadfast commitment to safe operational practices.
Notably, the region expanded its service portfolio, successfully implementing new piling
services. Operational performance remains robust, particularly within major mining projects
where stabilised production has garnered formal commendation for our onsite teams. This
excellence has led to the potential deployment of two additional blindhole machines,
though we maintain a vigilant watch on global commodity price fluctuations and their
subsequent impact on future prospects. Furthermore, our portfolio continues to expand
with the commissioning of a high-profile paste hole project. Additionally, the secured
expansion of underground drilling and slot boring scopes further solidifies our long-term
partnership pipeline.
Operational and engineering performance served as strong pillars, driven by the
advancement of automation programs, drive-system upgrades, and the successful
deployment of remote-drilling technologies. Efforts to resolve machine-availability
challenges and recover delay-related costs progressed alongside significant improvements
in cost and logistics management. Furthermore, the region continued to build long-term
capability through the completion of performance-evaluation cycles. Overall, these systemic
improvements and refined growth strategies have established a solid foundation for
sustainable competitiveness and future expansion.
Rest of the World
Operational efficiency remains high, with current drilling projects tracking ahead of current
planned schedules while maintaining lost time injury-free days in key segments. To further
optimise output, management is aggressively converting downtime into production through
remote drilling initiatives, which have already delivered measurable time savings.
The commercial pipeline is robust, highlighted by a new partnership for a hydro project and
the submission of a high-value tender for exploration.
Diversification remains a priority, with active forays into civil engineering and infrastructure
in this region. As market demand for gold, copper and critical minerals intensifies, the Group
is pushing hard on its strategy of quality and reliability, ensuring a strong competitive
advantage for the significant project load scheduled for 2026 and beyond.
Exploration drilling
Current drilling operations remain fundamentally stable across the portfolio, characterised
by steady production and strategic fleet mobilisation. Key highlights include the successful
commencement of large-scale uranium projects and the completion of initial micro-fracking
phases, which have transitioned into secondary stages involving advanced hydraulic stress
relief. While several core contracts have been extended through early 2026, the group is
actively navigating a shifting landscape following internal restructuring at certain partner
organisations. These changes have necessitated formal dialogues to clarify future scopes
and ensure the economic viability of service agreements, particularly where exploration
budgets have been tightened.
On the technical front, the group continues to enhance its underground and deep-hole
capabilities, with additional machinery being deployed as site infrastructure permits.
Innovation remains a focal point, evidenced by the successful commissioning of robotic
surface drilling technology. Although some software refinements are currently underway to
finalise production-ready versions, these advancements underscore a commitment to
driving efficiency. Despite some localised operational challenges and a more conservative
appetite for exploration spend in specific segments, the group remains focused on securing
long-term agreements and optimising overhead structures to maintain sustainable delivery.
Other mining services
Despite a period of limited large-scale project availability, the Group demonstrated
resilience through strong organic growth in core operations. A significant milestone included
the successful acquisition of a major safety system tender following recent regulatory shifts.
The Group remains strategically positioned to capitalise on newly legislated safety
requirements, leveraging extensive technical expertise and previous successful
deployments. Innovation remains a primary driver of value, evidenced by strategic
collaborations in underground connectivity solutions that optimise infrastructure costs.
Furthermore, the development of proprietary safety hardware, specifically designed for
challenging environments, reinforces the Group's commitment to operational safety and
long-term shareholder value.
Technology
Our strategic technology portfolio is advancing steadily, focused on diversifying group
interests and establishing a distinct competitive advantage through sustainable, high-impact
solutions. These initiatives offer step-change advancements in safety, accelerated orebody
access, and optimised mineral recovery. In the tunnelling sector, initial operational
challenges and resource constraints have impacted early production rates; however,
comprehensive mitigation strategies are underway to align performance with long-term
projections. Furthermore, we are refining our service proposals for upcoming large-scale
waste development projects and exploring potential joint ventures to solidify our
operational footprint.
In shaft boring, the next phase of development has transitioned into the manufacturing
stage, with completion targeted for late 2026. Simultaneously, our proprietary reef boring
system remains on schedule, with field trial commissioning and the development of second-
generation components planned throughout the current year. These technical
advancements are overseen by a formal sub-committee, ensuring rigorous governance and
direct reporting.
Operational equipment
The fleet consists of 151 raise bore, 46 slim drilling and 1 mobile tunnel boring rig. The total
raise boring fleet utilisation rate was 70% while the exploration drilling fleet utilisation was
53%. The rate of new rigs coming on board will settle with a focus on larger units, which
typically generate better utilisation and higher income.
Our people
We are dedicated to cultivating a highly motivated and engaged workforce, a commitment
that serves as the foundation of our competitive advantage and the primary driver of long-
term value for our stakeholders. Our strategy focuses on the acquisition, development, and
retention of premier talent by maintaining a secure, inclusive, and professional environment.
We recognise that our strength lies in the diverse perspectives of our personnel. By
fostering a culture of collaboration and mutual respect, we leverage these unique
contributions to achieve superior organisational results.
Our dedication to maintaining a high-performance culture remains steadfast. We are
committed to the continuous refinement of our internal practices to ensure that every
professional within our organisation is and feels valued, empowered, and strategically
equipped to reach their full potential.
Outlook and prospects
Despite prevailing global economic uncertainties, Master Drilling maintains a steadfast
outlook on its performance capabilities. This resilience is underpinned by a robust
foundation of long-term contracts and a deliberate strategy of geographical and operational
diversification. By maintaining a presence across various regions, commodities, and
currencies, the Group effectively mitigates systemic risks and remains well-positioned to
navigate an increasingly complex global landscape. This strategic breadth, combined with a
client-centric service orientation, ensures that our operations remain aligned with the
evolving needs of our partners.
Our current operational focus remains centred on maximising efficiency through proactive
capital management and disciplined resource allocation. We are actively working to
optimise fleet utilisation, targeting a benchmark of 75% to ensure the highest levels of
productivity. Prudent financial stewardship continues to guide our decision-making
processes, reinforcing our commitment to sustainable growth. Our established
diversification strategy has consistently proven its value and remains a central pillar of our
long-term expansion plans.
Looking toward the future, Master Drilling continues to prioritise safety and technological
advancement as core competitive advantages. We are strong advocates for the deployment
of advanced, mechanised equipment, which aligns with the industry-wide shift toward
automation and remote operations. This commitment to innovation ensures our relevance
in a rapidly changing market. Furthermore, we are exploring opportunities to expand
beyond traditional drilling, with a particular interest in the potential applications of Artificial
Intelligence to enhance our service delivery.
Finally, the success of our organisation is intrinsically linked to our investment in human
capital and our commitment to corporate responsibility. We strive to attract and retain top-
tier talent by fostering a high-performance work environment and implementing best
practices in personnel management. Concurrently, we remain dedicated to our
Environmental, Social, and Governance (ESG) initiatives. We believe that integrating these
principles into our core strategy not only aligns with our corporate values but also ensures
the long-term sustainability of the company while contributing to broader industry goals.
The Group enters 2026 with a solid order book, a record pipeline, and a disciplined capital
allocation strategy, positioning it well for sustainable long-term growth and shareholder
value creation. The pipeline as of 31 December 2025 totaled USD997.8 million, while the
committed order book stood at USD371.4 million for 2026 and beyond. In the short to
medium term, the sales pipeline is expected to stabilise and increase with joint ventures
supporting performance.
NATURE OF BUSINESS
Master Drilling Group Limited is an investment holding company, whose subsidiary
companies provide specialised drilling and mining services and provide solutions that
enforce business rules, optimise output, safe-guard miners, protect/manage assets and
locate missing persons, to blue chip major and mid-tier companies in the mining, civil
engineering, construction, and hydro-electric power sectors, across a number of
commodities and geographies.
For and on behalf of the Board
DC Pretorius AJ van Deventer
Chief Executive Officer Chief Financial Officer
Sponsor
Investec Bank Limited
REGISTERED AND CORPORATE OFFICE
4 Bosman Street
PO Box 902
Fochville, 2515
South Africa
31 March 2026
Date: 31-03-2026 07:05:00
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