Project delays and higher working capital strain Master Drilling

Master Drilling Group lifted revenue in the first half of 2026, but higher working capital requirements, project delays and equipment constraints weighed on profit and cash generation.

Revenue for the six months ended June increased 17% to $155.8m, while operating profit was steady at $26.2m.

Profit after tax fell 3.9% to $17.4m, while headline earnings per share rose 16.7% in dollar terms to 11.2 US cents. In rand terms, HEPS increased 4.1% to 183.9c, it said on Tuesday.

The drilling and mining services group said performance across its operations was mixed, with new work and increased activity in some markets offset by client-driven project delays and equipment availability constraints.

Cash generated from operations was $1.9m, as a result of investment in working capital associated with the increase in revenue.

The group spent $4.3m on capital expenditure during the period, with 44% allocated to expansion and 56% to maintaining its existing fleet.

It identified geopolitical volatility, supply-chain disruption, cost inflation and project timing as risks

Master Drilling’s order book increased to $400.9m from $305.6m a year earlier, while its sales pipeline more than doubled to $1.06bn from $515m.

The company cautioned that the pipeline would still need to be converted into secured work, with its earnings dependent on project mobilisation, execution and the conversion of work into cash earnings.

The group also had low utilisation of its drilling equipment, with 64% of its raise-boring rigs and just 38% of its slim-drilling rigs in use.

Master Drilling said it is also expanding beyond its traditional raise-boring work, which involves drilling large underground shafts, into:

The group expects recently awarded and mobilising projects to support activity into 2027 and beyond, but said the outlook remains dependent on the timing of project mobilisation and improved execution in areas where operations have been delayed.

It also identified geopolitical volatility, supply-chain disruption, cost inflation and project timing as risks.

Master Drilling did not declare an interim dividend. It paid shareholders a 40c special dividend in August relating to the 2025 financial year .