Revenue dipped 17.9% year-on-year to US$57.4 million in the six months to June 30, while net profit fell 45.9% to $4.6 million and the company suspended its dividend. Master Drilling said net operating cash generated rose 100%, though, to $11.1 million.
"The group entered the year facing a challenging operating environment and deteriorating economic fundamentals across many of the 23 countries in which we operate," said CEO Danie Pretorius.
"However, our quick response to the unprecedented disruptions in mining activity due to government-imposed lockdowns to curb the spread of COVID-19 ensured our financial stability and profitability."
Master Drilling had a "revenue pipeline" of $281.4 million at the end of June and a "committed order book" of $144.6 million, including $60 million in the second half of this year.
The company had debt of about $30 million at June 30, and cash of $19.5 million.
Master Drilling said it secured new work in West Africa, Australia, Russia, Europe and North America, while an 18-month civil construction sector contract had been secured in France.
"At year end, we highlighted our interest in growing our presence in Australia, Russia and central Asia, with a focus on raise boring," Pretorius said.
"Our Russian business partner agreement is in place and a project has been secured with equipment currently being mobilised. Opportunities in Kazakhstan and neighbouring states are also being actively worked on.
"Operations in Australia have started under a contract and we are actively building a pipeline of new projects."
Master Drilling said it set a world record by drilling a 1,382m raise-bore pilot hole in South Africa in the half. But the company is looking for a new project for its Mobile Tunnel Borer after a planned deployment was cancelled due to capital cutbacks at Eland Platinum.
"Technology remains a key differentiator for Master Drilling and we continue to support our customers with solutions that address changing conditions and future trends," Pretorius said.
"Global economic growth is not expected to correct in the short term and global volatility across capital and commodity markets is set to further impact overall mining activity and capex spend. Although some commodities are showing positive trends, only a limited number of new mining projects are expected to be commissioned in the short to medium term.
"Looking ahead, the improvement in commodity prices including gold, PGMs, iron ore, copper and polymetals, together with the weaker emerging market currencies, should counter some of the headwinds still facing the group for the remainder of the year."
Master Drilling shares (JSE: MDI) have fallen about 50% since the start of the year to R515, capitalising the company at R775 million (US$46 million).
