Master Drilling’s earnings for the half year have been hit by non-cash adjustments mainly in its North and Central American operations.
The Gauteng-based group, which is led by CEO Danie Pretorius, provides innovative drilling technologies, and mining solutions and services.
It said on Friday it expected to report earnings per share (EPS) that were as much as 96.5% lower than the previous comparative period. EPS for the six months ended June are expected to be between 6c and 40.3c, compared with 171.3c a year ago, largely the result of non-cash adjustments deemed appropriate in the interim results, it said.
Its headline earnings per share (HEPS) are expected to be between 166.3c and 200.2c — that is, between 1.9% lower and 18.1% higher than the comparative period.
The non-cash adjustments relate to the reverse circulation equipment in the group’s North and Central American operations not now being used due to a decline in the relevant market. The group has therefore provided for impairment losses on this equipment while it looks to market the equipment elsewhere in the world.
Master Drilling has also provided for an impairment loss on the mobile tunnel-boring machine as no formal agreement is in place to project future cash flows, due to uncertainty over commodity prices within the machine’s target industry, it said.
The industrial metals and mining group said when it released its full-year results in March that it was exploring opportunities to expand beyond traditional drilling, with potential applications for artificial intelligence being a key area of interest.
With the new technologies Master Drilling has invested in, CFO André van Deventer said in March that being at the forefront of mechanical drilling and cutting was a key area of growth to ensure sustainability into the future.
Master Drilling’s shares closed down 1.74% at R11.30 on Friday, giving the company a market capitalisation of R1.7bn.
The company will release its interim earnings on August 27.
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