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Master Drilling is looking at expanding its presence in the rest of Africa, the US and Canada, and in Turkey, Iran, Colombia and Ecuador.
“Diversification is the key to Master Drilling’s success to date,” CEO Danie Pretorius said last week.
Mongolia and China were also on the company’s radar, he said.
“China has huge potential, but it is difficult as a foreign company to get involved with contract drilling in China,” Pretorius said.
At the end of last year, Master Drilling, which provides specialised drilling services, acquired a 40% shareholding in Bergteamet Raiseboring Europe, which is headquartered in Sweden.
The company’s plan was to use Bergteamet to expand into the rest of Europe, Pretorius said.
The group liked to focus on locations where there was high risk and little competition from other drilling operators, he said. Master Drilling would also like to expand into energy and hydroprojects, he added.
The company last week reported a 14% hike in annual profit to $21.1 million (R311 million), which was primarily thanks to the strength of hard currencies such as the dollar and the euro, Pretorius said.
“There are seven or eight countries where we invoice in hard currencies, while our costs are in local currency. We want to focus on hard currency income,” he said.
Peter Major, a Cadiz mining analyst, said Master Drilling’s latest results were impressive, given the state of the mining and construction industry.
However, Major said the company hadn’t yet captured investors’ imagination, given that contract shaft-sinking and raise-boring was a tough business and the mining industry worldwide was going through a tough phase.
“It is hard to say how the company is going to look in the next year or two, but its historical performance has to count for a lot,” Major said.
A key aspect that Master Drilling was developing was its technological competitive edge, which could help the company maintain its profit margins, Major said.
Master Drilling again passed on paying a dividend to its shareholders, but Pretorius said the company was closer to paying one in future.
Turning to the outlook for the future, Pretorius said the company’s order book for this year of more than $100 million could allow the company to grow its earnings in the next financial year.
