Wrap Text
Unaudited Interim Financial Results for the six months ended 30 June 2026
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")
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2026
- Revenue in USD up 17.0% from USD 133.2 million to USD 155.8 million
- Headline earnings per share in USD up 16.7% from 9.6 cents to 11.2 cents
- Headline earnings per share in ZAR up 4,1% from 176,6 cents to 183,9 cents
- Profit after tax in USD decreased 3.9% from USD 18.1 million to USD 17.4 million
- Basic earnings per share in USD down 4.3% from 11.7 cents to 11.2 cents
- Basic earnings per share in ZAR down 14,6% from 215,3 cents to 183,9 cents
- Net asset value per share in USD up 11.5% from 148 cents to 165 cents
- Revenue pipeline of USD 1 062.3 million
- Committed order book of USD 400.9 million
- In line with the Company's past practice the Board did not declare an interim dividend
and will consider an appropriate dividend at year-end
- Special dividend of 40,0 cents per share in ZAR terms relating to FY2025 was paid during August 2026
REGULATORY REQUIREMENTS
The content of the short form announcement is the responsibility of the Board of directors of
Master Drilling. The information in the short-form announcement is a summary of the full
announcement available on Master Drilling's website. 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.
The full announcement can also be accessed online at
https://senspdf.jse.co.za/documents/2026/JSE/ISSE/MDI/HY2026.pdf
The information in this announcement has been extracted from the unaudited consolidated
interim financial statements as 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 van Deventer CA(SA), the Group's chief financial officer.
This announcement and the results contained herein have been prepared in compliance with
the Listings Requirements of the JSE Limited.
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).
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 specialised mining
services to blue-chip major and mid-tier clients across the mining, hydro-electric energy, civil
engineering, construction and infrastructure sectors worldwide.
The Group is exposed to a broad range of commodities and geographies. Its business model
combines specialised drilling solutions, tailor-made engineering, proprietary and mechanised
technologies, and a flexible support and logistics chain. This breadth allows Master Drilling to
participate across multiple stages of the mining and project-development life cycle while
reducing dependence on any single geography, client or commodity.
Master Drilling is recognised globally for raise boring and continues to broaden its offering
through exploration drilling, mechanised tunnelling and shaft development, remote and
autonomous drilling, underground safety and tracking solutions, digital technologies and
selected non-mining applications.
Commenting on the results for the six months ended 30 June 2026, Danie Pretorius, Chief
Executive Officer of Master Drilling, said:
"Master Drilling is pleased to report a resilient first six months of 2026, achieving USD155.8
million in revenue, reflecting a 17.0% increase compared to the same period in the prior
year. This accomplishment comes against a backdrop of global market and economic
uncertainty.
The first half of 2026 again demonstrated the value of Master Drilling's diversified operating
model. Performance across the Group was mixed, with strong activity and new awards in a
number of markets offset by project timing, client-driven delays and equipment
availability constraints in selected operations. Our focus remains on disciplined
execution, improving fleet utilisation, converting a healthy opportunity pipeline into
profitable secured work and protecting cash returns. We continue to invest selectively in
mechanisation, remote operations and digital capability where these technologies can
materially improve safety, productivity and client economics. The Group remains well
positioned to participate in the structural demand for mine development and specialist
drilling services while maintaining a disciplined approach to capital allocation."
FINANCIAL OVERVIEW
Revenue increased 17.0% to USD 155.8 million and operating profit remained stable at USD 26.2 million
compared to the corresponding period in 2025. These figures represent resilient results, despite
uncertain market, economic and operating conditions experienced globally.
USD headline earnings per share (HEPS) increased 16.7% to 11.2 cents, and ZAR HEPS
increased 4,1% to 183,9 cents. USD earnings per share (EPS) decreased 4.3% to 11.2 cents, and
ZAR EPS decreased 14,6% to 183,9 cents.
Net cash generated from operations amounted to USD 1.9 million. This is on the back of
investment in working capital associated with the significant increase in revenue. We continue
to manage cash resources diligently to cater for emerging opportunities that require specific
design, planning and investment.
Master Drilling's total capital spend of USD 4.3 million was applied as follows: 44% on
expansion and 56% on sustaining the existing fleet.
Interest-bearing borrowings increased from USD 60.4 million to USD 69.0 million. The gearing
ratio, including cash, increased from 9.1% to 14.9% in the first six months of the 2026 fiscal
year.
OPERATIONAL OVERVIEW
Safety and response to risk
Safety remains the Group's first operating priority. Management is therefore concentrating on critical-risk management,
verification of critical controls, targeted compliance interventions and strengthened supervisory accountability in
higher-risk activities and entities.
The Group continues to use mechanisation, remote operation and technology as key
components of its longer-term strategy to reduce employee exposure to high-risk activities.
Safety performance remains closely linked to operational discipline and is treated as a core
driver of sustainable value creation.
Sustainability initiatives continued during the period. The Group reported a reduction in carbon
emissions over the preceding 12 months, while additional water metering is improving visibility
and control over water consumption. Social and community programmes remain focused on
creating sustainable value in the regions in which Master Drilling operates.
South America
Performance across key operating territories yielded mixed results in the first half of the year,
balanced by strong growth momentum and strategic market expansion. This region experienced growth
primarily driven by the launch of flagship drilling operations, equipment mobilisation for new
large-shaft projects, and a longer-term contract finalisation, with further growth anticipated
in exploration and horizontal shaft development in the near future. Despite the growth already
experienced, this region experienced projects delays, driven primarily by client-requested schedule
adjustments, which are expected to recover in the second half of the year. Furthermore, successful
entry into a new target jurisdiction has already yielded immediate contract scope expansions,
providing a strong foundation for continued regional growth.
Central and North America
During the period, operational focus centered on consolidation, commercial discipline, and
enhancing equipment readiness. While high tender activity supported a growing commercial
pipeline, performance in certain operating units remained constrained by primarily client-driven
execution delays.
Key operational achievements included the successful deployment of remote-controlled
reaming technology, which yielded a schedule efficiency gain and highlighted the value of
technology-enabled execution. Moving into the second half of the year, the primary objectives
are to restore consistent execution, strengthen pipeline governance, and convert developing
commercial opportunities into secured, profitable contracts.
Africa
The southern region experienced a slower start to the year compared to previous years but remains
focused on having an excellent financial year. The primary operational priority is securing
follow-on work for the XXXL machine following the completion of a major contract, with several
promising enquiries currently under consideration. Beyond immediate operational targets, this
regional platform remains vital to supporting the Group s broader technology development and
exploration initiatives.
Across the rest of the continent, operational momentum has strengthened considerably, supported
by key contract wins, expanding project scopes, and a robust pipeline extending into 2027 and beyond.
West African operations have improved following the successful restart and steady-state normalisation
of previously paused activities, alongside strong regional performance underpinned by longer term
contracts and expanded raise-bore work. Central African operations continue as a significant contributor,
driven by production ramp-ups, stable core operations, and ongoing discussions for expanded scopes
at key sites. Furthermore, medium-term growth prospects across East and neighboring regional markets
remain highly encouraging, anchored by ongoing underground contracts, strategic additions to the client
portfolio, and longer-term contracts that will scale alongside planned mine expansions.
Rest of the World
Overall operational activity across strategic markets remains strong, characterised by high
workforce utilisation, robust execution on active contracts, and advanced operational integration
such as remote and autonomous drilling capabilities. Mid-year performance in this region is
supported by structured operational-improvement initiatives focused on strengthening leadership,
supply chain resilience, equipment reliability, and long-range planning. Mobilisation is actively
progressing across several high-value initiatives, including major deep ventilation and
evacuation shaft contracts, civil-infrastructure raise-boring assignments, and new hydroelectrics
project, advancing the Group s strategic objective to expand into addressable markets beyond
traditional mining. Operational developments are gaining long-term momentum, supplemented by
technology-led growth initiatives and a high-volume commercial pipeline driven by major
raise-boring, exploration, and underground development tenders aligned with regional mining
expansion plans.
Slim drilling
For the first time in several years, the Group's exploration drilling division expanded its operations outside South Africa.
This milestone underlines our commitment to international growth, unlocking new regional opportunities while enhancing
operational capacity across broader geographic markets.
Other mining services
The Group's mining service entities continue to outperform expectations, driven by a steadfast
commitment to workplace safety and favorable regulatory demand for advanced underground
tracking solutions. Operational milestones, including successful proof-of-concept
implementations for missing person locator systems and the integration of specialised AI
modules, highlight the ongoing expansion of the Group's technological capabilities.
By scaling these service offerings into new international markets and actively pursuing global
growth opportunities, the Group continues to broaden its technology portfolio and build a more
resilient, diversified earnings profile over time.
Technology
Master Drilling is committed to continuous technological advancement as a key driver of client
value and market competitiveness. To achieve this, we have implemented a focused strategy
that leverages targeted investments across our various technological divisions.
The Group continues to advance its mechanised tunnelling, shaft development, and
specialised cutting initiatives in line with key strategic milestones. The Mobile Tunnel Borer
remains fully operational, demonstrating improved performance as ground conditions stabilise,
while strategic engagements regarding future equipment procurement and collaboration remain
ongoing.
Funding has been secured for the next phase of Shaft Boring System development, with design
and manufacturing targeted for completion between late 2026 and early 2027.
Parallel efforts under the Reef Boring System programme are progressing through active field
validation trials, complemented by detailed design work on advanced cutterheads and second-
generation machinery. Together, these programmes directly support the Group's long-term
strategy to reduce reliance on conventional drill-and-blast methods and expand its mechanised
mining capabilities.
Operational equipment
The fleet consists of 151 raise bore, 76 slim drilling and one mobile tunnel boring rigs. The total
raise boring fleet utilisation rate was around 64% while the slim drilling fleet utilisation was
around 38%. The rate of new rigs coming on board will settle with a focus on larger units, which
typically generate higher income.
Our people
Master Drilling's ability to execute safely and consistently depends on attracting, developing
and retaining a highly capable workforce. The Group continues to focus on leadership
effectiveness, organisational culture, communication, career development and a high-
performance environment across its global operations.
During 2026, the Group continued to mature its performance and talent-management
framework through the formal identification of high-potential and critical talent, the
introduction of a talent framework, structured individual development planning and stronger
succession-management disciplines. These initiatives are intended to improve visibility of
talent and people risks while supporting long-term leadership capacity and employee retention.
The Group also continues to invest in wellbeing, resilience and community initiatives,
recognising that sustainable operating performance requires strong employee engagement and
meaningful relationships with the communities in which it operates.
OUTLOOK AND PROSPECTS
Master Drilling enters the second half of 2026 with a diversified operating base, a healthy commercial pipeline and a number of
recently awarded or mobilising projects that should support activity into 2027 and beyond. The earnings profile remains dependent on
timely project mobilisation, improved execution in recovering regions and continued conversion of secured work into cash earnings.
The external environment remains supportive of long-term demand for specialised drilling and
mechanised mine-development services. Elevated commodity prices across several of the
Group's core exposures, ongoing investment in resource security and the need to improve
mining productivity continue to underpin client investment. Geopolitical volatility, supply-chain
disruption, cost inflation and project timing nevertheless remain relevant risks.
Management priorities for the remainder of the year are clear: execute safely, improve fleet
utilisation, protect margins, maintain capital discipline, strengthen cash conversion and
selectively pursue growth where the Group has a sustainable competitive advantage. Continued
progress in mechanised technologies, remote operations and digital enablement is expected to
support differentiation and improve the quality and resilience of the Group's long-term earnings
base.
Our pipeline of potential business provides meaningful visibility, but management remains focused
on the quality of conversion, pricing discipline, risk allocation and expected cash returns
rather than mere pipeline growth.
The Group's growth strategy remains centred on improving utilisation of the existing fleet,
expanding selectively into attractive geographies and clients, increasing exposure to adjacent
sectors and commercialising differentiated technology. Opportunities are assessed against
strategic fit, execution capability, balance-sheet capacity and return thresholds.
The Group continues to build exposure outside traditional raise boring through tunnelling,
exploration, underground safety and technology, civil infrastructure and digital solutions.
Progress in civil infrastructure, Mobile Tunnel Borer feasibility work, remote drilling and next-
generation mining technologies provides evidence of a broader addressable market, although
mining remains the dominant revenue base.
NATURE OF BUSINESS
Master Drilling Group Limited is an investment holding company whose subsidiary companies
provide specialised drilling and mining services and technology solutions to blue-chip major
and mid-tier clients in the mining, civil engineering, infrastructure, construction and hydro-
electric power sectors across a broad range of commodities and geographies. The Group's
solutions include raise boring, exploration and slim drilling, mechanised tunnelling and shaft
development, remote and autonomous drilling, underground safety and tracking technologies,
and digital and data-enabled solutions. Master Drilling is a global leader in raise-bore drilling
services.
PIPELINE AND COMMITTED ORDERS
As at 30 June 2026 our sales pipeline totalled USD 1 062.3 million (2025: USD 515.0 million)
while the committed order book totalled USD 400.9 million (2025: USD 305.6 million) for the
remainder of 2026 and beyond.
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
25 August 2026
Date: 25/08/2026 05:05:00
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