South Africa-based raisebore driller Master Drilling’s expansion into new markets, particularly its recent entry into India and Australia, should stand it in good stead to benefit from a global uptick in the commodities cycle.

The JSE-listed company in November announced its entry into the Indian and Australian markets and in February bought Swedish firm Bergteamet Raiseboring Europe, which it intends to use as a launchpad for further expansion in Europe.

In an interview with Mining Weekly last week, CEO Danie Pretorius said that the group lacked exposure in some of the countries where the world’s major mining companies operated.

“We are at an exposure rate of between 30% and 40% in doing business in some of these countries, which include India, Australia, the US, Asia and Canada,” he said, adding that Master Drilling would aim to increase its exposure in those regions.

Pretorius stated that a stronger global economy and an upswing in the commodities cycle had a positive impact on its order book, with committed orders of $124.7-million and a “healthy” pipeline of $228.1-million.

The strong order book should have a positive impact on the group’s revenue in the next reporting period.

In the 2017 financial year to December, Master Drilling’s revenue increased by 2.8% to $121.4-million, while operating profit decreased marginally to $24.8-million.

The firm’s South African rand earnings per share (EPS) decreased by 27.1% to 153c, while the US-dollar equivalent EPS decreased 19.6% to 11.5c. South African rand headline earnings per share (HEPS) decreased by 26.5% to 154.4c and the US-dollar HEPS decreased by 18.9% to 11.6c.

An impairment on the company’s South African black economic empowerment transaction had a negative effect of about $1-million.

An investment in further human capital to drive future growth in the business, lower utilisation rates and the exchange rate effect of emerging currencies had a negative impact on the company’s profit after tax, which fell from $22.32-million to $17.45-million.

Pretorius said in a statement that it was a positive result, given that one of the group’s machine categories, XX-large machines, was used at a rate of only 40%.

Meanwhile, he said that new management strategies and actions implemented in some challenging regions had turned most of the company’s underperforming businesses around.

As a result, the company expects an improvement in most global regions where it does business during the next reporting period.

Pretorius further noted to Mining Weekly that the company was “particularly proud” of the launch of its Mobile Tunnel Borer last month, which was set for delivery in September and commissioning in October.

This disruptive technology allowed for continuous mining and required no blasting, significantly enhancing mining efficiencies, he explained.