Interim report
Page 1
REPORT TO SHAREHOLDERS UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2026 SALIENT FEATURES FOR THE PERIOD • Revenue in USD up 1 7.0% from USD 133.2 million to USD 155.8 million • Headline earnings per share in USD up 16.7% from 9.6 cents to 11.2 cents • Headline earnings per share in ZAR up 4, 1% from 176,6 cents to 183,9 cents • Profit after tax in USD decreased 3.9% from USD 18.1 million to USD 1 7.4 million • Basic earnings per share in USD down 4.3% from 11.7 cents to 11.2 cents • Basic earnings per share in ZAR down 14,6% from 215,3 cents to 183,9 cents • Net asset value per share in USD up 11.5% from 148 cents to 165 cents • Revenue pipeline of USD 1 062.3 million • Committed order book of USD 400.9 million • In line with the Company’s past practice the Board did not declare an interim dividend and will consider an appropriate dividend at year-end • Special dividend of 40,0 cents per share in ZAR terms relating to FY2025 was paid during August 2026
Page 2
2 MASTER DRILLING INTERIM RESULTS 2026 Commentary 3 Outlook and prospects 6 Consolidated statement of financial position 11 Consolidated statement of profit or loss and other comprehensive income 12 Consolidated statement of cash flows 13 Consolidated statement of changes in equity 14 Notes to the unaudited consolidated interim financial results 16 Corporate information 40 CONTENTS
Page 3
3 MASTER DRILLING INTERIM RESULTS 2026 ABOUT MASTER DRILLING Master Drilling was established in 1986 and listed on the Johannesburg Stock Exchange Limited (JSE) in 2012. The Group delivers innovative drilling technologies and specialised mining services to blue-chip major and mid-tier clients across the mining, hydro-electric energy, civil engineering, construction and infrastructure sectors worldwide. The Group is exposed to a broad range of commodities and geographies. Its business model combines specialised drilling solutions, tailor-made engineering, proprietary and mechanised technologies, and a flexible support and logistics chain. This breadth allows Master Drilling to participate across multiple stages of the mining and project-development life cycle while reducing dependence on any single geography, client or commodity. Master Drilling is recognised globally for raise boring and continues to broaden its offering through exploration drilling, mechanised tunnelling and shaft development, remote and autonomous drilling, underground safety and tracking solutions, digital technologies and selected non-mining applications. Commenting on the results for the six months ended 30 June 2026, Danie Pretorius, Chief Executive Officer of Master Drilling, said: “Master Drilling is pleased to report a resilient first six months of 2026, achieving USD 155.8 million in revenue, reflecting a 17.0% increase compared to the same period in the prior year. This accomplishment comes against a backdrop of global market and economic uncertainty. The first half of 2026 again demonstrated the value of Master Drilling’s diversified operating model. Performance across the Group was mixed, with strong activity and new awards in a number of markets offset by project timing, client-driven delays and equipment availability constraints in selected operations. Our focus remains on disciplined execution, improving fleet utilisation, converting a healthy opportunity pipeline into profitable secured work and protecting cash returns. We continue to invest selectively in mechanisation, remote operations and digital capability where these technologies can materially improve safety, productivity and client economics. The Group remains well positioned to participate in the structural demand for mine development and specialist drilling services while maintaining a disciplined approach to capital allocation. FINANCIAL OVERVIEW Revenue increased 17.0% to USD 155.8 million and operating profit remained stable at USD 26.2 million compared to the corresponding period in 2025. These figures represent resilient results, despite uncertain market, economic and operating conditions experienced globally. USD headline earnings per share (HEPS) increased 16.7% to 11.2 cents, and ZAR HEPS increased 4,1% to 183,9 cents. USD earnings per share (EPS) decreased 4.3% to 11.2 cents, and ZAR EPS decreased 14,6% to 183,9 cents. Net cash generated from operations amounted to USD 1.9 million. This is on the back of investment in working capital associated with the significant increase in revenue. We continue to manage cash resources diligently to cater for emerging opportunities that require specific design, planning and investment. Master Drilling’s total capital spend of USD 4.3 million was applied as follows: 56% on expansion and 44% on sustaining the existing fleet Interest-bearing borrowings increased from USD 60.4 million to USD 69.0 million. The gearing ratio, including cash, increased from 9.1% to 14.9% in the first six months of the 2026 fiscal year. COMMENTARY
Page 4
4 MASTER DRILLING INTERIM RESULTS 2026 OPERATIONAL OVERVIEW Safety and response to risk Safety remains the Group’s first operating priority. Management is therefore concentrating on critical- risk management, verification of critical controls, targeted compliance interventions and strengthened supervisory accountability in higher-risk activities and entities. The Group continues to use mechanisation, remote operation and technology as key components of its longer-term strategy to reduce employee exposure to high-risk activities. Safety performance remains closely linked to operational discipline and is treated as a core driver of sustainable value creation. Sustainability initiatives continued during the period. The Group reported a reduction in carbon emissions over the preceding 12 months, while additional water metering is improving visibility and control over water consumption. Social and community programmes remain focused on creating sustainable value in the regions in which Master Drilling operates. South America Performance across key operating territories yielded mixed results in the first half of the year, balanced by strong growth momentum and strategic market expansion. This region experienced growth primarily driven by the launch of flagship drilling operations, equipment mobilisation for new large-shaft projects, and a longer-term contract finalisation, with further growth anticipated in exploration and horizontal shaft development in the near future. Despite the growth already experienced, this region experienced project delays, driven primarily by client-requested schedule adjustments, which are expected to recover in the second half of the year. Furthermore, successful entry into a new target jurisdiction has already yielded immediate contract scope expansions, providing a strong foundation for continued regional growth. Central and North America During the period, operational focus centered on consolidation, commercial discipline, and enhancing equipment readiness. While high tender activity supported a growing commercial pipeline, performance in certain operating units remained constrained by primarily client-driven execution delays. Key operational achievements included the successful deployment of remote-controlled reaming technology, which yielded a schedule efficiency gain and highlighted the value of technology-enabled execution. Moving into the second half of the year, the primary objectives are to restore consistent execution, strengthen pipeline governance, and convert developing commercial opportunities into secured, profitable contracts. Africa The southern region experienced a slower start to the year compared to previous years, but remains focused on having an excellent financial year. The primary operational priority is securing follow-on work for the XXXL machine following the completion of a major contract, with several promising enquiries currently under consideration. Beyond immediate operational targets, this regional platform remains vital to supporting the Group’s broader technology development and exploration initiatives. Across the rest of the continent, operational momentum has strengthened considerably, supported by key contract wins, expanding project scopes, and a robust pipeline extending into 2027 and beyond. West African operations have improved following the successful restart and steady-state normalisation of previously paused activities, alongside strong regional performance underpinned by longer-term contracts and expanded raise-bore work. Central African operations continue as a significant contributor, driven by production ramp-ups, stable core operations and ongoing discussions for expanded scopes at key sites. Furthermore, medium-term growth prospects across Eastern and neighboring regional markets remain highly encouraging, anchored by ongoing underground contracts, strategic additions to the client portfolio and longer-term contracts that will scale alongside planned mine expansions. COMMENTARY continued
Page 5
5 MASTER DRILLING INTERIM RESULTS 2026 Rest of the World Overall operational activity across strategic markets remains strong, characterised by high workforce utilisation, robust execution on active contracts, and advanced operational integration such as remote and autonomous drilling capabilities. Mid-year performance in this region is supported by structured operational-improvement initiatives focused on strengthening leadership, supply chain resilience, equipment reliability and long-range planning. Mobilisation is actively progressing across several high- value initiatives, including major deep ventilation and evacuation shaft contracts, civil-infrastructure raise-boring assignments and a new hydroelectrics project, advancing the Group’s strategic objective to expand into addressable markets beyond traditional mining. Operational developments are gaining long- term momentum, supplemented by technology-led growth initiatives and a high-volume commercial pipeline driven by major raise-boring, exploration and underground development tenders aligned with regional mining expansion plans. Slim drilling For the first time in several years, the Group’s exploration drilling division expanded its operations outside South Africa. This milestone underlines our commitment to international growth, unlocking new regional opportunities while enhancing operational capacity across broader geographic markets. Other mining services The Group’s mining service entities continue to outperform expectations, driven by a steadfast commitment to workplace safety and favorable regulatory demand for advanced underground tracking solutions. Operational milestones, including successful proof-of-concept implementations for missing person locator systems and the integration of specialised AI modules, highlight the ongoing expansion of the Group’s technological capabilities. By scaling these service offerings into new international markets and actively pursuing global growth opportunities, the Group continues to broaden its technology portfolio and build a more resilient, diversified earnings profile over time. Technology Master Drilling is committed to continuous technological advancement as a key driver of client value and market competitiveness. To achieve this, we have implemented a focused strategy that leverages targeted investments across our various technological divisions. The Group continues to advance its mechanised tunnelling, shaft development, and specialised cutting initiatives in line with key strategic milestones. The Mobile Tunnel Borer remains fully operational, demonstrating improved performance as ground conditions stabilise, while strategic engagements regarding future equipment procurement and collaboration remain ongoing. Funding has been secured for the next phase of Shaft Boring System development, with design and manufacturing targeted for completion between late 2026 and early 2027. Parallel efforts under the Reef Boring System programme are progressing through active field validation trials, complemented by detailed design work on advanced cutterheads and second-generation machinery. Together, these programmes directly support the Group’s long-term strategy to reduce reliance on conventional drill-and-blast methods and expand its mechanised mining capabilities. Operational equipment The fleet consists of 151 raise bore, 76 slim drilling and one mobile tunnel boring rigs. The total raise boring fleet utilisation rate was around 64% while the slim drilling fleet utilisation was around 38%. The rate of new rigs coming on board will settle with a focus on larger units, which typically generate higher income.
Page 6
6 MASTER DRILLING INTERIM RESULTS 2026 Our people Master Drilling’s ability to execute safely and consistently depends on attracting, developing and retaining a highly capable workforce. The Group continues to focus on leadership effectiveness, organisational culture, communication, career development and a high-performance environment across its global operations. During 2026, the Group continued to mature its performance and talent-management framework through the formal identification of high-potential and critical talent, the introduction of a talent framework, structured individual development planning and stronger succession-management disciplines. These initiatives are intended to improve visibility of talent and people risks while supporting long-term leadership capacity and employee retention. The Group also continues to invest in wellbeing, resilience and community initiatives, recognising that sustainable operating performance requires strong employee engagement and meaningful relationships with the communities in which it operates. OUTLOOK AND PROSPECTS Master Drilling enters the second half of 2026 with a diversified operating base, a healthy commercial pipeline and a number of recently awarded or mobilising projects that should support activity into 2027 and beyond. The earnings profile remains dependent on timely project mobilisation, improved execution in recovering regions and continued conversion of secured work into cash earnings. The external environment remains supportive of long-term demand for specialised drilling and mechanised mine-development services. Elevated commodity prices across several of the Group’s core exposures, ongoing investment in resource security and the need to improve mining productivity continue to underpin client investment. Geopolitical volatility, supply-chain disruption, cost inflation and project timing nevertheless remain relevant risks. Management priorities for the remainder of the year are clear: execute safely, improve fleet utilisation, protect margins, maintain capital discipline, strengthen cash conversion and selectively pursue growth where the Group has a sustainable competitive advantage. Continued progress in mechanised technologies, remote operations and digital enablement is expected to support differentiation and improve the quality and resilience of the Group’s long-term earnings base. Our pipeline of potential business provides meaningful visibility, but management remains focused on the quality of conversion, pricing discipline, risk allocation and expected cash returns rather than mere pipeline growth. The Group’s growth strategy remains centred on improving utilisation of the existing fleet, expanding selectively into attractive geographies and clients, increasing exposure to adjacent sectors and commercialising differentiated technology. Opportunities are assessed against strategic fit, execution capability, balance-sheet capacity and return thresholds. COMMENTARY continued
Page 7
7 MASTER DRILLING INTERIM RESULTS 2026 The Group continues to build exposure outside traditional raise boring through tunnelling, exploration, underground safety and technology, civil infrastructure and digital solutions. Progress in civil infrastructure, Mobile Tunnel Borer feasibility work, remote drilling and next-generation mining technologies provides evidence of a broader addressable market, although mining remains the dominant revenue base. NATURE OF BUSINESS Master Drilling Group Limited is an investment holding company whose subsidiary companies provide specialised drilling and mining services and technology solutions to blue-chip major and mid-tier clients in the mining, civil engineering, infrastructure, construction and hydro-electric power sectors across a broad range of commodities and geographies. The Group’s solutions include raise boring, exploration and slim drilling, mechanised tunnelling and shaft development, remote and autonomous drilling, underground safety and tracking technologies, and digital and data-enabled solutions. Master Drilling is a global leader in raise-bore drilling services. PIPELINE AND COMMITTED ORDERS As at 30 June 2026 our sales pipeline totalled USD 1 062.3 million (2025: USD 515.0 million) while the committed order book totalled USD 400.9 million (2025: USD 305.6 million) for the remainder of 2026 and beyond, spread as follows:
Page 8
8 MASTER DRILLING INTERIM RESULTS 2026 AWARDED ORDERS 20% 14% 15% 38% 4% 17% 1% 1% 2% 2% 2% Diamond Gold 1% Water Tin Other Silver/Lead/Zinc PGMs Uranium Civils Coal Copper COMMENTARY continued 0 100 200 300 400 500 PIPELINE 2026 2027 2028 and beyond AwardedAwaiting adjudication Proposal Years USD’ million AWARDED ORDERS 20% 14% 15% 38% 4% 1% 1% 2% 2% 2% 1% Civils Diamond PGMs Copper Uranium Silver/Lead/Zinc Coal Tin Gold Water Other
Page 9
9 MASTER DRILLING INTERIM RESULTS 2026 REVENUE The following graphs reflect the Group’s combined revenue for financial periods ended 30 June: REVENUE BY ACTIVITY JUNE 2026 68% 13% 5% Sale of industrial products Raise boring Support services Slim drilling New rock-boring technology 10% 4% REVENUE BY ACTIVITY JUNE 2025 80% 11% 3% 4% 2% Sale of industrial products Raise boring Support services Slim drilling New rock-boring technology REVENUE BY GEOGRAPHICAL AREA JUNE 2026 28% 30% 7% 17% South AfricaCentral and North America South America Rest of the WorldAfrica 18% REVENUE BY GEOGRAPHICAL AREA JUNE 2025 32% 23% 8% 19% 18% South AfricaCentral and North America South America Rest of the WorldAfrica
Page 10
10 MASTER DRILLING INTERIM RESULTS 2026 REVENUE BY COMMODITY JUNE 2026 22% 29% 17% 5% 21% 1%2% 2% 1% Chrome Coal Copper Diamonds Gold Civils Other commodities PGMs Silver/Lead/Zinc REVENUE BY COMMODITY JUNE 2026 22% 29% 17% 5% 21% 1%2% 2% 1% Chrome Coal Copper Diamonds Gold Civils Other commodities PGMs Silver/Lead/Zinc REVENUE BY COMMODITY JUNE 2025 24% 20% 19% 8% 19% 1%3% 3% 3% Chrome Coal Copper Diamonds Gold Civils Other commodities PGMs Silver/Lead/Zinc REVENUE BY COMMODITY JUNE 2025 24% 20% 19% 8% 19% 1%3% 3% 3% Chrome Coal Copper Diamonds Gold Civils Other commodities PGMs Silver/Lead/Zinc REVENUE BY BUSINESS SECTOR JUNE 2026 94% 5%1% Civil & Construction MiningHydro-electric REVENUE BY BUSINESS SECTOR JUNE 2026 94% 5%1% Civil & Construction MiningHydro-electric REVENUE BY BUSINESS SECTOR JUNE 2025 95% 4%1% Civil & Construction MiningHydro-electric COMMENTARY continued REVENUE BY BUSINESS SECTOR JUNE 2025 95% 4%1% Civil & Construction MiningHydro-electric
Page 11
11 MASTER DRILLING INTERIM RESULTS 2026 Unaudited six Audited months ended ended Jun 2026 Dec 2025 Note(s) USD USD Assets Non-current assets Property, plant and equipment 2 204 774 781 199 091 239 Intangibles and goodwill 3 21 514 619 21 725 674 Financial assets 12 421 734 332 358 Deferred tax asset 9 227 380 9 253 775 Related party loans 8 3 258 559 3 532 591 Investment in joint venture 5 527 594 5 619 915 Investment in associates 1 647 452 1 610 377 246 372 118 241 165 929 Current assets Inventories 56 623 099 54 095 186 Related party loans 8 351 515 343 393 Trade and other receivables 4 93 003 212 85 480 205 Current tax receivable 11 685 427 12 380 408 Derivative financial instruments 12 262 761 812 489 Cash and cash equivalents 37 289 602 40 112 991 199 215 617 193 224 672 Total assets 445 587 735 434 390 601 Equity and liabilities Equity Share capital 148 855 517 148 855 517 Reserves (139 943 249) (129 848 099) Retained income 217 745 867 200 924 308 226 658 135 219 931 726 Non-controlling interest 21 782 643 21 919 877 248 440 777 241 851 603 Liabilities Non-current liabilities Interest bearing borrowings 58 161 042 44 232 228 Lease liabilities 7 513 904 6 306 609 Instalment sales liabilities 3 833 389 2 045 208 Contract liability – 708 541 Employee benefit provision 1 079 268 1 000 986 Consideration payable 2 073 420 2 831 474 Related party loans 8 – – Put option liability for non-controlling interest 7 248 438 7 173 202 Deferred tax liability 13 297 990 13 513 282 93 207 451 77 811 530 Current liabilities Interest bearing borrowings 10 880 442 16 198 618 Lease liabilities 747 306 961 671 Instalment sales liabilities 2 061 923 1 453 012 Related party loans 8 818 784 634 693 Current tax payable 14 318 711 12 118 690 Trade and other payables 5 66 334 892 74 379 361 Derivative financial instruments 219 172 18 891 Employee benefit provision 809 139 2 640 614 Consideration payable 758 054 698 222 Contract liability 1 744 722 4 325 130 Put option liability for non-controlling interest – – Cash and cash equivalents 5 246 362 1 298 566 103 939 507 114 727 468 Total liabilities 197 146 958 192 538 998 Total equity and liabilities 445 587 735 434 390 601 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Page 12
12 MASTER DRILLING INTERIM RESULTS 2026 Unaudited six Unaudited six months ended months ended Jun 2026 Jun 2025 Note(s) USD USD Revenue 11 155 839 239 133 197 257 Cost of sales (109 456 317) (92 898 014) Gross profit 46 382 922 40 299 243 Other operating income 1 401 677 5 183 628 Other operating expenses (21 245 313) (22 750 863) Reversal of impairment /(Impairment) of property, plant and equipment 2 – 4 646 026 Movement of expected credit loss allowances 4 (361 982) (762 398) Operating profit 26 177 304 26 615 636 Investment income 830 994 318 269 Finance costs (2 909 001) (2 870 561) Fair value adjustment 89 376 32 128 Share of profit/(loss) from equity accounted investments 273 895 232 057 Profit before taxation 24 462 569 24 327 529 Taxation (7 095 709) (6 207 034) Profit for the period 17 366 860 18 120 495 Other comprehensive profit/(loss) that will subsequently be classified to profit and loss: Exchange differences on translating foreign operations (10 160 933) 4 812 979 Other comprehensive loss for the year net of taxation (10 160 933) 4 812 979 Total comprehensive income 7 205 927 22 933 474 Profit attributable to: 17 366 860 18 120 495 Owners of the parent 16 821 559 17 649 375 Non-controlling interest 545 302 471 120 Total comprehensive income attributable to: 7 205 927 22 933 474 Owners of the parent 6 660 625 22 462 354 Non-controlling interest 545 302 471 120 Earnings per share (USD) 6 Basic earnings per share (cents) 11.2 11.7 Diluted earnings per share (USD) 6 Diluted basic earnings per share (cents) 11.1 11.7 Earnings per share (ZAR) Basic earnings per share (cents) 183,9 215,3 Diluted earnings per share (ZAR) Diluted basic earnings per share (cents) 182,7 215,3 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Page 13
13 MASTER DRILLING INTERIM RESULTS 2026 Unaudited six Unaudited six months ended months ended Jun 2026 Jun 2025 Note(s) USD USD Cash flows from operating activities Cash generated from operations 7 1 856 975 17 195 838 Interest received 830 994 318 269 Finance costs paid (2 909 001) (2 044 917) Tax paid (5 832 356) (4 443 675) Net cash from operating activities (6 053 388) 11 025 515 Cash flows from investing activities Purchase of property, plant and equipment and intangibles (4 137 008) (13 243 916) Investment in subsidiary – (380 786) Payment of consideration payable (698 222) – Advances to related parties (1 247 789) (335 005) Proceeds from related parties 1 029 355 637 647 Net cash used in investing activities (5 053 664) (13 322 060) Cash flows from financing activities Receipt from financial liabilities 18 260 533 – Repayment of financial liabilities (10 988 295) (2 618 891) Repayment of capital portion of lease liabilities (134 011) (143 837) Repayment of capital portion of instalment sales agreements (724 991) (598 550) Advances from related parties 1 042 973 212 446 Repayment of related parties (1 652 064) (1 378 911) Share buy back – – Dividends paid to shareholders (682 536) (6 219 196) Additional investment in subsidiary – (101 523) Net cash used in financing activities 5 121 609 (10 848 462) Total cash movement for the period (5 985 443) (13 145 007) Cash at the beginning of the period 38 814 425 34 615 375 Effect of exchange rate movement on cash balances (785 742) 577 677 Total cash at end of the period 32 043 240 22 048 045 CONSOLIDATED STATEMENT OF CASH FLOWS
Page 14
15 MASTER DRILLING INTERIM RESULTS 202614 MASTER DRILLING INTERIM RESULTS 2026 Equity arising Foreign Transaction on formation currency between Share-based Attributable Non- Total Share of the translation equity payments Total Retained to owners of controlling Shareholders' USD capital Group 1 reserve 2 holders 3 reserve reserve income the parent interest equity Balance as at 31 December 2024 148 855 517 (58 264 013) (82 656 689) 383 738 192 557 (140 344 407) 175 238 593 183 749 703 22 354 404 206 104 107 Dividends declared by subsidiaries – – – – – – – – (768 763) (768 763) Change in control – – – – – – 678 055 678 055 (678 055) – Share-based payment – – – – 63 075 63 075 – 63 075 – 63 075 Total comprehensive income for the year – – 4 812 979 – – 4 812 979 17 649 375 22 462 354 471 120 22 933 474 Dividends to shareholders – – – – – – (5 450 433) (5 450 433) – (5 450 433) Total changes – – 4 812 979 – 63 075 4 876 054 12 876 997 17 753 051 (975 698) 16 777 353 Balance as at 30 June 2025 148 855 517 (58 264 013) (77 843 710) 383 738 255 632 (135 468 353) 188 115 590 201 502 754 21 378 706 222 881 460 Dividends declared by subsidiaries – – – – – – – – (435 879) (435 879) Change in control – – – – – – – – – – Share-based payment – – – – 89 903 89 903 – 89 903 – 89 903 Dividends to shareholders – – – – – – (24 152) (24 152) – (24 152) Total comprehensive income for the year – – 5 530 351 – – 5 530 351 12 832 870 18 363 221 977 050 19 340 271 Total changes – – 5 530 351 – 89 903 5 620 254 12 808 718 18 428 972 541 171 18 970 143 Balance as at 31 December 2025 148 855 517 (58 264 013) (72 313 359) 383 738 345 535 (129 848 099) 200 924 308 219 931 726 21 919 877 241 851 603 Dividends declared by subsidiaries – – – – – – – – (682 536) (682 536) Share-based payment – – – – 65 783 65 783 – 65 783 – 65 783 Total comprehensive income for the period – – (10 160 933) – – (10 160 933) 16 821 559 6 660 625 545 302 7 205 927 Dividends to shareholders – – – – – – – – – – Total changes – – (10 160 933) – 65 783 (10 095 150) 16 821 559 6 726 408 (137 234) 6 589 174 Balance as at 30 June 2026 148 855 517 (58 264 013) (82 474 292) 383 738 411 318 (139 943 249) 217 745 867 226 658 135 21 782 643 248 440 777 Note 13 13 1 Equity arising on formation of the Group – Equity that arose with the formation of the Group on the initial Johannesburg Stock Exchange Listing. 2 Foreign currency translation reserve – Equity that arose as a result consolidation subsidiaries that have a different currency to that of the Group's reporting currency. 3 Transactions between equity holders – Equity that arose due to transactions between different equity holders with the formation of the Group. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Page 15
16 MASTER DRILLING INTERIM RESULTS 2026 1. BASIS OF PRESENTATION The unaudited consolidated interim financial statements have been prepared in accordance with IAS 34: Interim Financial Reporting, IFRS Accounting Standards, the South African financial reporting requirements ( defined as Financial Pronouncements as issued by the Financial Reporting Standards Council and SAICA Financial Reporting Guides as issued by the Accounting Practices Committee), and the requirements of the South African Companies Act, (Act No 71 of 2008), as amended and the Listings Requirements of the JSE Limited. The unaudited consolidated interim financial statements have been prepared on the historical cost-basis, except certain financial instruments at fair value, and incorporate the principal accounting policies set out below. They are presented in United States Dollar (USD). The significant accounting policies are consistent in all material respects with those applied in the audited consolidated annual financial statements for the year ended 31 December 2025. Impact of accounting standards to be applied in future periods There are a few standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 December 2025. The Group performed an analysis of these standards and interpretations and concluded that these were not applicable to the Group. The unaudited consolidated interim financial statements presented have been prepared by the corporate reporting staff of Master Drilling, headed by Willem Ligthelm CA(SA), the Group’s financial manager. This process was supervised by André Jean van Deventer CA(SA), the Group’s chief financial officer. FUNCTIONAL AND PRESENTATION CURRENCY Items included in the consolidated financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates, i.e., “functional currency”. The consolidated financial statements are presented in USD (the “presentation currency”). Management believes that USD is more useful to the users of the consolidated financial statements, as this currency most reliably reflects the global business performance of the Group as a whole. Assets and liabilities are translated at the closing rate, income and expenses at transaction rates. Exchange differences are recognised in other comprehensive income and reported within equity. GOING CONCERN Based on the information available to it, the Board of Directors assessed and concluded that the Group remains a going concern for at least the next 12 months. ISSUED CAPITAL There have been no changes to the share capital as previously reported. OPERATING SEGMENTS There have been no changes to the operating segments as previously reported. Refer to note 11. ACCOUNTING POLICIES NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Page 16
17 MASTER DRILLING INTERIM RESULTS 2026 EVENTS SUBSEQUENT TO REPORTING PERIOD The directors are not aware of any other matters or circumstances arising since the reporting date to the date of this report, not otherwise dealt with in this report. DIVIDENDS In line with the Company’s past practice the Board did not declare an interim dividend and will consider an appropriate dividend at year-end. A special dividend of 40,0 cents per share in ZAR terms relating to FY2025 was paid during August 2026. BOARD OF DIRECTORS There were no changes made to the Board since the previous reporting date.
Page 17
18 MASTER DRILLING INTERIM RESULTS 2026 2. PROPERTY, PLANT AND EQUIPMENT Accumulated depreciation and Jun 2026 impairment Carrying USD Cost losses value Land and buildings 1 840 441 (245 671) 1 594 770 Right of use assets: Land and buildings 7 398 751 (919 358) 6 479 393 Instalment sale: Plant and machinery 196 750 (65 284) 131 467 Plant and machinery 261 886 468 (85 201 894) 176 684 574 Assets under construction 15 321 360 – 15 321 360 Furniture and fittings 1 831 193 (1 612 422) 218 770 Motor vehicles 9 480 167 (5 964 677) 3 515 490 Right of use assets: Motor vehicles 244 592 (95 177) 149 415 IT equipment 1 923 706 (1 244 166) 679 540 Total 300 123 429 (95 348 649) 204 774 781 Accumulated depreciation and Dec 2025 impairment Carrying USD Cost losses value Land and buildings 1 519 097 (181 291) 1 337 806 Right-of-use assets: Land and buildings 9 133 931 (2 982 956) 6 150 975 Instalment sale: Plant and machinery 182 255 (58 016) 124 239 Plant and machinery 256 092 135 (85 144 079) 170 948 056 Assets under construction 15 855 145 – 15 855 145 Furniture and fittings 1 782 499 (1 575 257) 207 242 Motor vehicles 9 294 584 (5 545 306) 3 749 278 Right-of-use assets: Motor vehicles 73 266 (56 171) 17 095 IT equipment 1 802 698 (1 101 295) 701 403 Total 295 735 610 (96 644 371) 199 091 239 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued
Page 18
19 MASTER DRILLING INTERIM RESULTS 2026 PAGE LEFT BLANK INTENTIONALLY
Page 19
21 MASTER DRILLING INTERIM RESULTS 202620 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 2.1 Reconciliation of property, plant and equipment Jun 2026 USD Opening balance Additions Assets acquired through business combination Exchange difference on consolidation of foreign subsidiaries Disposals Depreciation (Impairment loss)/ Reversal of Impairment Remeasurement Reclassification from assets under construction to plant and machinery Total Land and buildings 1 337 806 266 905 – 1 890 – (11 831) – – – 1 594 770 Right of use assets: Land and buildings 6 150 975 – – 823 167 – (519 264) – 24 516 – 6 479 393 Instalment sale: Plant and machinery 124 239 421 935 – (403 765) – (10 943) – – – 131 467 Plant and machinery 170 948 056 2 855 919 – 7 691 025 (20 600) (5 489 824) – – 699 999 176 684 574 Assets under construction 15 855 145 – 166 214 – – – (699 999) 15 321 360 Furniture and fittings 207 242 41 756 – (1 115) (6 120) (22 994) – – – 218 770 Motor vehicles 3 749 278 602 594 – 20 497 (140 771) (716 107) – – – 3 515 490 Right of use assets: Motor vehicles 17 095 – – 139 107 – (6 787) – – – 149 415 IT equipment 701 403 132 499 – 5 438 (2 793) (157 007) – – – 679 540 Total 199 091 239 4 321 608 – 8 442 458 (170 285) (6 934 756) – 24 516 – 204 774 781 Dec 2025 USD Opening balance Additions Assets acquired through business combination Exchange difference on consolidation of foreign subsidiaries Disposals Depreciation (Impairment loss)/ Reversal of Impairment Remeasurement Reclassification from assets under construction to plant and machinery Total Land and buildings 1 215 708 – – 135 937 – (13 839) – – – 1 337 806 Right-of-use assets: Land and buildings 3 497 194 – – 1 133 323 – (1 052 084) – 2 572 542 – 6 150 975 Instalment sale: Plant and machinery 499 387 – – 39 772 – (24 976) – – (389 944) 124 239 Plant and machinery 146 542 895 6 537 501 6 631 14 490 198 (495 406) (11 736 928) 4 781 577 – 10 821 588 170 948 056 Assets under construction 13 802 307 11 931 348 – 812 874 – – (259 740) – (10 431 644) 15 855 145 Furniture and fittings 169 263 108 887 7 636 22 877 (59 272) (42 149) – – – 207 242 Motor vehicles 3 792 063 1 610 333 9 459 419 653 (797 381) (1 284 849) – – – 3 749 278 Right-of-use assets: Motor vehicles 40 926 – – 3 595 (12 313) (15 113) – – – 17 095 IT equipment 413 718 432 395 5 833 85 650 (15 888) (220 305) – – – 701 403 Total 169 973 461 20 620 464 29 559 17 143 879 (1 380 260) (14 390 243) 4 521 837 2 572 542 – 199 091 239 2. PROPERTY, PLANT AND EQUIPMENT (continued) During the previous period, the Group impaired USD 0.3 million for design costs related to a second generation Mobile Tunnelboring Machine. 2.2 Capital commitments Jun 2026 Dec 2025 USD USD Capital expenditure for plant and machinery authorised by the directors and contracted for within 12 months. Capital expenditure will be funded through cash generated from operations. 6 049 138 6 625 055 Security Moveable assets valued at USD 109.6 million (ZAR 1,796 billion at closing spot rate) of the South African subsidiaries is bonded to ABSA Capital as security for an interest-bearing loan. Impairment During the previous period, the Group finalised a contract to commence operations of the mobile tunnel boring machine. This change in circumstances represents an indicator of reversal of impairment under IAS 36. Accordingly, the Group has reassessed the recoverable amount of the asset, which is determined by using unobservable inputs from the higher of fair value less costs of disposal and value in use within level 3 of the fair value hierarchy. Based on the contract’s projected cash flows, the recoverable amount has been estimated at USD 4.8 million. In line with IAS 36, the previously recognised impairment loss has been reversed to the extent that it does not increase the asset’s carrying amount above the amount that would have been determined had no impairment loss been recognised. As a result, a total reversal of USD 4.8 million has been recognised for the period ended 31 December 2025.
Page 20
22 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 3. INTANGIBLE ASSETS Jun 2026 Dec 2025 USD USD Goodwill 4.1 3 540 663 3 494 412 Intangible assets 4.2 17 973 956 18 231 262 21 514 619 21 725 674 3.1 Goodwill Jun 2026 Dec 2025 USD USD Goodwill recognised from value chain business combinations 2 185 392 2 149 157 Goodwill recognised from raisebore business combinations 918 673 434 182 Goodwill recognised from software support services 436 598 911 073 Goodwill recognised from business combinations 3 540 663 3 494 412 Jun 2026 USD Opening balance Assets acquired through business combination Exchange difference on consolidation of foreign subsidiaries Total Goodwill recognised from value chain business combinations 2 149 157 – 36 236 2 185 393 Goodwill recognised from raisebore business combinations 434 182 – 7 599 441 781 Goodwill recognised from software support services 911 073 – 2 416 913 489 Goodwill recognised from business combinations 3 494 412 – 46 251 3 540 663 Dec 2025 USD Opening balance Assets acquired through business combination Exchange difference on consolidation of foreign subsidiaries Total Goodwill recognised from value chain business combinations 2 028 512 – 120 645 2 149 157 Goodwill recognised from raisebore business combinations 386 367 – 47 815 434 182 Goodwill recognised from software support services 515 708 289 762 105 603 911 073 Goodwill recognised from business combinations 2 930 587 289 762 274 063 3 494 412
Page 21
23 MASTER DRILLING INTERIM RESULTS 2026 3.2 Intangible assets Jun 2026 USD Cost Accumulated amortisation and impairment losses Carrying value Computer software 890 548 (805 112) 85 436 Software solutions 7 216 941 – 7 216 941 Contractual client relationship 12 881 958 (3 291 305) 9 590 653 Patents 1 080 925 – 1 080 925 Total 22 070 374 (4 096 418) 17 973 956 Dec 2025 USD Cost Accumulated amortisation and impairment losses Carrying value Computer software 1 181 915 (1 064 899) 117 016 Software solutions 7 142 031 – 7 142 031 Contractual client relationship 12 748 247 (2 832 944) 9 915 303 Patents 1 056 912 – 1 056 912 Total 22 129 105 (3 897 843) 18 231 262
Page 22
25 MASTER DRILLING INTERIM RESULTS 202624 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued Jun 2025 USD Opening balance Additions Exchange difference on consolidation of foreign subsidiaries Disposal Assets acquired through business combination Amortisation Impairment/ Scrapping of intangible assets Total Computer software 117 016 567 (1 039) (912) – (30 196) – 85 436 Software solutions 7 142 031 – 74 911 – – – – 7 216 942 Contractual client relationship 9 915 303 – 103 998 – – (428 648) – 9 590 653 Patents 1 056 912 12 905 11 108 – – – – 1 080 925 Total 18 231 262 13 472 188 978 (912) – (458 844) – 17 973 956 Dec 2024 USD Opening balance Additions Exchange difference on consolidation of foreign subsidiaries Disposal Assets acquired through business combination Amortisation Impairment/ Scrapping of intangible assets Total Computer software 172 089 38 964 (29 869) (602) 47 711 (56 428) – 117 016 Software solutions 6 441 475 – (178 950) – – – – 7 142 031 Contractual client relationship 10 475 836 – (274 322) – – (787 285) – 9 915 303 Patents 953 247 – (27 046) – – – – 1 056 912 Total 18 042 647 38 964 (510 187) (602) 47 711 (843 713) – 18 231 262 3. INTANGIBLE ASSETS (continued) 3.2 Intangible assets (continued)
Page 23
26 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 4. TRADE AND OTHER RECEIVABLES Jun 2026 Dec 2025 USD USD Trade receivables 78 952 416 74 093 140 Trade receivables – Normal 73 091 478 72 131 749 Trade receivables – Retention 1 414 531 1 340 145 Contract asset 11 841 781 7 421 407 Expected credit loss allowance of trade receivables and contract asset (7 395 374) (6 800 161) Loans to employees 256 921 241 742 Prepaid expenses 4 628 665 3 755 047 Deposits 997 481 593 978 Indirect taxes 6 382 414 5 731 850 Other receivables 1 785 315 1 064 448 Total 93 003 212 85 480 205 Trade receivables of South African subsidiaries have been ceded to Absa Capital as security for interest-bearing loan. The movement in expected credit losses is presented below Opening balance 6 800 161 4 303 616 Exchange differences on translation of foreign operations 233 231 529 230 Allowance for credit losses recognised 361 982 1 967 315 Total 7 395 374 6 800 161 Gross trade receivables per region: Africa 13 113 734 16 157 506 Central and North America 9 567 273 7 469 307 Rest of the World 15 263 974 12 386 078 South Africa 21 357 820 14 596 826 South America 27 044 989 30 283 584 Total 86 347 790 80 893 301
Page 24
27 MASTER DRILLING INTERIM RESULTS 2026 June 2026 Expected credit loss matrix: Estimated gross carrying amount Loss allowance Expected credit loss rate AFRICA Current 3 579 712 147 016 3.05% to 4.05% 30 days 4 244 572 208 011 3.10% to 4.15% 31 to 60 days 2 705 477 132 360 3.40% to 4.40% 61 to 90 days 2 583 973 145 749 3.90% to 5.00% Specific provision 383 709 CENTRAL AND NORTH AMERICA Current 3 691 660 94 412 2.70% to 3.50% 30 days 2 687 250 94 125 2.85% to 3.65% 31 to 60 days 1 089 661 40 553 3.10% to 3.90% 61 to 90 days 2 098 702 102 091 3.60% to 4.45% Specific provision 2 897 572 REST OF THE WORLD Current 7 232 447 197 130 2.25% to 3.85% 30 days 5 081 553 174 574 2.35% to 3.95% 31 to 60 days 1 244 346 44 471 2.65% to 4.25% 61 to 90 days 1 705 629 77 396 3.15% to 4.75% Specific provision 624 868 SOUTH AFRICA Current 8 533 013 208 839 3.50% to 3.70% 30 days 6 297 771 260 616 3.65% to 3.75% 31 to 60 days 2 502 470 110 865 3.90% to 4.05% 61 to 90 days 4 024 566 201 445 4.35% to 4.45% Specific provision 281 016 SOUTH AMERICA Current 17 597 531 581 957 2.95% to 3.30% 30 days 4 368 552 164 931 3.05% to 3.35% 31 to 60 days 2 371 674 96 158 3.35% to 3.65% 61 to 90 days 2 707 233 125 508 3.85% to 4.15% Specific provision Total 86 347 790 7 395 374 4. TRADE AND OTHER RECEIVABLES (continued)
Page 25
28 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued December 2025 Expected credit loss matrix: Estimated gross carrying amount Loss allowance Expected credit loss rate AFRICA Current 5 112 607 167 383 2.95% to 3.95% 30 days 5 785 226 3.05% to 4.05% 31 to 60 days 3 140 026 122 461 3.30% to 4.30% 61 to 90 days 7 899 088 355 178 3.80% to 4.80% Specific provision 286 885 CENTRAL AND NORTH AMERICA Current 3 225 687 65 763 2.65% to 3.45% 30 days 331 423 9 254 2.75% to 3.55% 31 to 60 days 196 377 5 826 3.00% to 3.80% 61 to 90 days 3 715 820 144 093 3.50% to 4.30% Specific provision 2 248 165 REST OF THE WORLD Current 5 846 414 127 031 2.20% to 3.80% 30 days 2 898 549 79 381 2.30% to 3.90% 31 to 60 days 2 757 810 78 570 2.55% to 4.15% 61 to 90 days 883 305 31 952 3.05% to 4.65% Specific provision 1 528 591 SOUTH AFRICA Current 5 501 387 107 333 3.45% to 3.60% 30 days 5 443 511 179 575 3.55% to 3.70% 31 to 60 days 1 891 070 66 786 3.80% to 3.95% 61 to 90 days 1 760 858 70 261 4.30% to 4.45% Specific provision 258 550 SOUTH AMERICA Current 19 142 893 504 660 2.90% to 3.20% 30 days 5 146 390 154 889 3.00% to 3.30% 31 to 60 days 3 059 247 98 877 3.25% to 3.55% 61 to 90 days 2 935 054 108 471 3.75% to 4.05% Specific provision – Total 80 893 301 6 800 161 4. TRADE AND OTHER RECEIVABLES (continued)
Page 26
29 MASTER DRILLING INTERIM RESULTS 2026 Jun 2026 Dec 2025 USD USD The carrying amount in USD of trade and other receivables are denominated in the following currencies: Australian Dollar 2 226 356 2 342 898 Brazilian Real 5 628 006 6 018 695 Botswana Pula 382 – Canadian Dollar 871 370 1 336 559 Chilean Peso 17 728 375 17 001 093 Chinese Yuan 528 200 517 877 Colombian Peso 10 910 16 824 Euro 1 582 684 2 666 406 Ghanaian Cedi 342 920 577 729 Quatemalan Quetzales 9 748 8 537 Indian Rupee 5 047 568 3 695 030 Mexican Peso 102 326 172 392 Namibian Dollar 178 938 301 463 Nicaraguan Córdoba 176 368 297 134 Peruvian Sol 1 091 285 629 315 Swedish Krona 2 250 240 1 979 057 Turkish Lira 86 230 143 761 United States Dollar 29 241 428 26 088 093 West African Franc 2 500 727 3 663 671 South African Rand 22 407 509 16 878 225 Zambian Kwacha 991 645 1 145 446 Total 93 003 212 85 480 205 5. TRADE AND OTHER PAYABLES Jun 2026 Dec 2025 USD USD Trade payables 39 548 866 43 864 313 Accruals 3 527 994 4 085 735 Indirect taxes 4 684 133 5 831 443 Leave pay accruals 6 556 189 5 862 271 Consideration payable 1 131 387 1 036 854 Employee related 6 318 581 8 942 160 Claims liability (*) 2 701 315 2 701 315 Other payables 1 866 425 2 055 270 Total 66 334 892 74 379 361 (*) The claims liability amount represents a possible claim from a client in the African region where they claim that not all the scope of works was completed as contractually agreed between the parties. 4. TRADE AND OTHER RECEIVABLES (continued)
Page 27
31 MASTER DRILLING INTERIM RESULTS 202630 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued Jun 2026 Jun 2025 USD USD Profit before taxation 24 462 569 24 327 529 Adjustments for: Depreciation and amortisation 7 393 600 6 155 786 Impairment (reversal)/loss of property, plant and equipment – (4 646 026) Share-based payment expense 65 783 (63 075) Fair value adjustment 89 376 (32 128) (Profit)/Loss from equity accounted investments (273 895) (232 057) Unrealised foreign exchange movements (1 299 643) (1 954 457) Put option for non-controlling interest expense – – Gain on disposal of fixed assets (27 220) (140 388) Movement in expected credit loss allowance (361 982) 762 398 Movement in allowance for obsolete inventory (505 776) 372 966 Interest received (830 994) (318 269) Movement in provisions (1 909 757) 171 809 Finance costs 2 909 001 2 870 561 Changes in working capital: Inventories (3 288 774) (726 103) Trade and other receivables (13 177 613) (12 712 029) Trade and other payables (10 093 273) 4 017 738 Contract liability (1 294 427) (658 417) Total 1 856 974 17 195 838 6. EARNINGS PER SHARE Jun 2026 Jun 2026 Jun 2025 Jun 2025 Gross Nett Gross Nett USD USD USD USD Reconciliation between earnings and headline earnings Profit for the period 17 366 860 17 366 860 18 120 495 18 120 495 Deduct: Non-controlling interest – (545 302) – (472 156) Basic earnings/ for the year 17 366 860 16 821 559 18 120 495 17 648 339 Gain on disposal of property, plant and equipment (27 220) 8 841 (140 388) (100 751) Impairment /loss of property, plant and equipment – – (4 646 026) (3 131 713) Impairment of intangibles – – – – Headline earnings for the year 17 339 640 16 830 400 13 334 081 14 415 875 Earnings per share 11.2 11.7 Diluted earnings per share 11.1 11.7 Headline earnings per share 11.2 9.6 Diluted headline earnings per share 11.1 9.6 Dividends per share (ZAR per share) 40,0 65,0 Weighted average number of ordinary shares at the end of the year for the purpose of basic earnings per share and headline earnings per share 150 536 779 150 536 779 Effect of dilutive potential ordinary shares – employee share options 631 611 612 322 Weighted average number of ordinary shares at the end of the year for the purpose of diluted basic earnings per share and diluted headline earnings per share 151 168 390 151 149 101 7. CASH GENERATED FROM OPERATIONS
Page 28
32 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 8. RELATED PARTY LOANS RECEIVABLE FROM/(OWING TO) Jun 2026 Dec 2025 USD USD A&R Holdings (Pty) Ltd 6 – (630 847) A&R Electronics (Pty) Ltd 6 (10 627) – HC Mine Services and Solutions (Pty) Ltd 6 (29 563) – Stellane Enterprises (Pty) Ltd 6 (49 976) – The Voltage Doctor CC 6 (58 422) – WL Holdings (Pty) Ltd 6 (58 422) – Applied Vehicle Analysis (Pty) Ltd 7 – – Barrange (Pty) Ltd 1 4 591 4 543 Kairos Raising (Pty) Ltd 6 23 499 10 617 DrillX Innovations (Pty) Ltd 8 840 862 804 965 Besalco SA 5 55 217 21 270 Lamproom Holdings (Pty) Ltd 6 – – EIQ Investment Holdings (Pty) Ltd 6 105 335 132 023 Hall Core Holdings (Pty) Ltd 8 2 417 697 2 727 626 Hall Core International Ltd 8 – – Sargin Uluslararasi 8 158 947 172 594 Drilling Properties (Pty) Ltd 1 644 638 DCP (Pty) Ltd 1 (1 335) (1 322) MDG Equity Holdings (Pty) Ltd 1, 3 & 4 (609 115) 797 MD Drilling Employees Trust 2 (1 323) (2 524) MD Engineering Employees Trust 2 3 282 911 2 791 290 3 241 291 Related party loans receivable from 3 610 074 3 875 984 Related party loans owing to (818 784) (634 693) Net related party loans 2 791 290 3 241 291 Non-current assets 3 258 559 3 532 591 Current assets 351 515 343 393 Non-current liabilities – – Current liabilities (818 784) 634 693 The Group performed an analysis on the recoverability of its related party loans receivable from Hall Core International Ltd and based on the assessment performed it was concluded based on the underlying business' liquid assets this loan is currently irrecoverable and therefore provided 100% of the total balance (USD 1.1 million) The above loans are with legal entities where the following related parties have control: 1 Danie Pretorius 2 BEE Partner 3 Andre van Deventer 4 Koos Jordaan 5 Co-owner of Consorsio Master Drilling Besalco SA 6 Co-owner of A&R Engineering (Pty) Ltd and related companies 7 Joint venture company of the Group 8 Joint venture partner
Page 29
33 MASTER DRILLING INTERIM RESULTS 2026 9. RELATED PARTIES TRANSACTIONS Jun 2026 Jun 2025 Related party Nature USD USD Barrange (Pty) Ltd Rental paid 98 788 96 127 A&R Electronics (Pty) Ltd Consumables 33 330 – HC Mine Services & Solutions (Pty) Ltd Administration and management fees 72 955 – Plusko 157 (Pty) Ltd Rental paid 70 333 – Stellane Enterprises (Pty) Ltd Administration and management fees 123 329 – The Voltage Doctor CC Administration and management fees 144 174 – WL Holdings (Pty) Ltd Administration and management fees 144 174 – HallCore Holdings (Pty) Ltd Rental income 616 074 682 810 HallCore Holdings (Pty) Ltd Interest received 81 447 93 039 MDG Equity Holdings (Pty) Ltd Interest paid 72 568 32 631 Kairos Raising Administration and management fees 26 12 A&R Investment Holding (Pty) Ltd Administration and management fees – 383 EIQ Investments (Pty) Ltd Administration and management fees 6 948 3 124 Lamproom Holdings (Pty) Ltd Administration and management fees 20 548 50 611 10. REVENUE Jun 2026 Jun 2025 Dec 2025 USD USD USD Revenue from contracts with customers Rendering of services 135 054 482 118 096 219 259 384 260 Sale of industrial products 20 784 757 15 101 038 32 596 119 155 839 239 133 197 257 291 980 379 Disaggregation of revenue from contracts with customers The Group disaggregates revenue from customers as follows: Rendering of services 135 054 482 118 096 219 259 384 260 Sale of industrial products 20 784 757 15 101 038 32 596 119 155 839 239 133 197 257 291 980 379 Timing of revenue recognition Over time Rendering of services 135 054 482 118 096 219 259 384 260 At a point in time Sale of industrial products 20 784 757 15 101 038 32 596 119 Refer to note 11 – Segment Reporting for disaggregation of revenue by stage of mining activity and geographical area.
Page 30
34 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 11. SEGMENT REPORTING 11.1 Activity The following table shows the distribution of the Group’s combined sales by activity, regardless of where the goods were produced: Jun 2026 Jun 2025 Dec 2025 USD USD USD Sales revenue by activity Sale of industrial products 20 784 757 15 101 038 32 894 981 Raise boring 105 357 304 106 505 055 214 514 192 Support services 16 237 537 4 841 465 27 985 987 Slim drilling 7 785 077 4 891 142 11 336 920 New rock-boring technology 5 674 565 1 858 557 5 248 299 Total 155 839 239 133 197 257 291 980 379 Gross profit by activity Sale of industrial products 7 018 317 5 076 308 12 348 374 Raise boring 33 598 055 32 022 833 60 465 861 Support services 3 956 447 1 374 898 7 520 190 Slim drilling 715 671 1 362 218 1 115 399 New rock-boring technology 1 094 432 462 986 1 157 588 Total 46 382 922 40 299 243 82 607 412 The chief decision maker of the Group is the chief executive officer. The chief executive officer, under the direct supervision of the resident board, manages the activities of the Group concomitant to the inherent risks facing these activities. It is for this reason that the activities are separated as disclosed above. The equipment and related liabilities of the Group can be used at multiple stages and therefore cannot be presented per activity. There we no changes made to the segments compared to the previous reporting period.
Page 31
35 MASTER DRILLING INTERIM RESULTS 2026 11.2 Geographical segments Although the Group’s major operating divisions are managed on a worldwide basis, they operate in five principal geographical areas of the world. Jun 2026 Jun 2025 Dec 2025 USD USD USD Sales revenue by geographical market Africa 27 877 955 23 790 465 51 056 389 Central and North America 11 253 158 10 557 866 21 078 779 Rest of the World(**) 26 167 442 24 977 205 52 171 326 South Africa 46 195 619 30 605 389 74 793 469 South America 44 345 064 43 266 332 92 880 416 Total 155 839 239 133 197 257 291 980 379 Cost of sales by geographical market Africa 16 899 211 15 568 333 32 219 838 Central and North America 9 010 293 10 000 316 17 611 084 Rest of the World 13 396 885 14 963 187 35 128 270 South Africa 33 012 298 18 699 097 48 014 540 South America 37 137 630 33 667 081 76 399 235 109 456 317 92 898 014 209 372 967 Gross profit by geographical market Africa 10 978 744 8 222 132 18 836 551 Central and North America 2 242 865 557 550 3 467 695 Rest of the World(**) 12 770 558 10 014 018 17 043 058 South Africa 13 183 322 11 906 292 26 778 928 South America 7 207 434 9 599 251 16 481 180 Total 46 382 922 40 299 243 82 607 412 The gross profit percentages vary based on drilling ground conditions, competition in the markets and the mix of in-country and foreign cost. Jun 2026 Jun 2025 Dec 2025 USD USD USD Depreciation, amortisation and impairment by geographical market Africa 186 396 191 313 82 744 Central and North America 623 388 767 019 1 394 944 Rest of the World(**) 2 022 776 1 809 282 5 164 969 South Africa 2 727 895 (2 385 036) 273 198 South America 1 833 144 1 127 182 3 707 836 Total 7 393 600 1 509 760 10 623 691 (**) Rest of the World include operations in Scandinavia, Australia and India. 11. SEGMENT REPORTING (continued)
Page 32
36 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 11. SEGMENT REPORTING (continued) 11.2 Geographical segments (continued) Jun 2026 Jun 2025 Dec 2025 USD USD USD Employee costs by geographical market Africa 4 133 962 3 257 617 8 796 144 Central and North America 6 138 323 4 985 590 10 960 461 Rest of the World 9 225 695 7 807 747 16 284 689 South Africa 23 665 547 16 199 778 34 330 935 South America 22 016 902 18 266 222 41 469 619 65 180 428 50 516 955 111 841 848 Jun 2026 Jun 2025 Dec 2025 USD USD USD Consumables by geographical market Africa 1 924 660 1 410 951 3 409 238 Central and North America 1 072 238 726 337 1 244 682 Rest of the World 1 181 968 1 687 444 9 900 127 South Africa 14 031 755 7 752 380 21 418 908 South America 2 452 995 2 494 221 4 356 456 20 663 616 14 071 334 40 329 411 Jun 2026 Jun 2025 Dec 2025 USD USD USD Maintenance by geographical market Africa 384 988 551 005 980 498 Central and North America 991 847 1 162 035 2 064 353 Rest of the World 9 668 841 7 790 928 10 601 449 South Africa 2 473 802 2 323 128 4 761 530 South America 4 919 935 3 716 291 9 849 006 18 439 414 15 543 388 28 256 836 Jun 2026 Jun 2025 Dec 2025 USD USD USD Support services by geographical market Africa 1 162 982 449 290 1 008 840 Central and North America 204 400 1 028 265 1 714 805 Rest of the World 288 457 1 554 930 3 407 884 South Africa 11 824 653 10 847 683 29 509 306 South America 1 708 069 2 775 960 6 679 378 15 188 561 16 656 128 42 320 213 Jun 2026 Jun 2025 Dec 2025 USD USD USD Investment revenue by geographical market Africa 43 683 – – Central and North America – 60 456 75 427 Rest of the World(**) 74 448 119 336 308 049 South Africa 645 552 107 053 1 264 930 South America 67 311 31 424 84 093 Total 830 994 318 269 1 732 499
Page 33
37 MASTER DRILLING INTERIM RESULTS 2026 Jun 2026 Jun 2025 Dec 2025 USD USD USD Finance cost by geographical market Africa – – – Central and North America 883 176 849 565 1 757 470 Rest of the World(**) 467 703 – 30 934 South Africa 1 075 008 1 279 429 3 150 732 South America 483 113 741 567 1 062 458 Total 2 909 001 2 870 561 6 001 594 Jun 2026 Jun 2025 Dec 2025 USD USD USD Taxation by geographical market Africa 1 944 570 1 760 055 2 386 143 Central and North America 155 321 176 676 284 811 Rest of the World(**) 2 645 423 1 405 317 5 364 853 South Africa 855 322 1 356 857 1 915 582 South America 1 495 073 1 508 129 2 715 840 Total 7 095 709 6 207 034 12 667 229 Jun 2026 Jun 2025 Dec 2025 USD USD USD Total assets by geographical market Africa 28 884 706 28 844 606 29 432 487 Central and North America 38 512 529 40 773 535 38 472 442 Rest of the World(**) 108 899 708 117 404 238 101 937 957 South Africa 177 136 436 128 366 588 170 052 824 South America 92 154 356 84 308 454 94 494 891 Total 445 587 735 399 697 421 434 390 601 Jun 2026 Jun 2025 Dec 2025 USD USD USD Total liabilities by geographical market Africa 13 715 317 13 387 277 11 786 820 Central and North America 22 419 815 27 640 669 23 748 222 Rest of the World(**) 57 268 763 36 065 146 46 318 901 South Africa 67 157 000 70 415 434 73 046 314 South America 36 588 565 29 307 435 37 638 741 Total 197 149 459 176 815 961 192 538 998 (**) Rest of the World include operations in Scandinavia, Australia and India. 11. SEGMENT REPORTING (continued) 11.2 Geographical segments (continued)
Page 34
38 MASTER DRILLING INTERIM RESULTS 2026 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS continued 12. FAIR VALUE The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements: • Level 1: Quoted market price (unadjusted) in an active market for an identical instrument. • Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. • Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. Fair values of derivative financial assets that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using valuation techniques. The Group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments. Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives and over the counter derivatives. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty joint ventured with determination of fair values. For more complex instruments such as investments in unlisted equities, the Group uses primarily the discounted cash flow valuation model. Some or all of the significant inputs into these models may not be observable in the market and are derived from market prices or rates such as comparable beta ratios or are estimated based on assumptions. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, selection of appropriate discount rates, forecasted and terminal growth rates and other model inputs.
Page 35
39 MASTER DRILLING INTERIM RESULTS 2026 June 2026 USD The table below analyses financial instruments measured at fair value at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorised (all amounts in USD as at 30 June): Level 1 Level 2 Level 3 Total Investment in equity instruments 421 734 – – 421 734 Reversal of impairment of property, plant and equipment – – – – Derivative financial instrument – 262 761 – 262 761 Derivative financial instrument – (219 172) – (219 172) Put option for non-controlling interest – – (7 248 438) (7 248 438) December 2025 USD The table below analyses financial instruments measured at fair value at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorised (all amounts in USD as at 31 December): Level 1 Level 2 Level 3 Total Investment in equity instruments 332 358 – – 332 358 Reversal of impairment of property, plant and equipment – – 4 781 577 4 781 577 Derivative financial instrument – 812 489 – 812 489 Derivative financial instrument – (18 891) – (18 891) Put option for non-controlling interest – – (7 173 202) (7 173 202)
Page 36
40 MASTER DRILLING INTERIM RESULTS 2026 MASTER DRILLING GROUP LIMITED Registration number: 2011/008265/06 Incorporated in the Republic of South Africa JSE share code: MDI ISIN: ZAE000171948 ||| LEI: 37890095B2AFC611E529 REGISTERED AND CORPORATE OFFICE 4 Bosman Street PO Box 902 Fochville, 2515 South Africa DIRECTORS Executive Daniël (Danie) Coenraad Pretorius Chief executive officer and founder André Jean van Deventer Financial director and chief financial officer Gareth Robert Sheppard Alternate director to Daniël (Danie) Coenraad Pretorius Non-executive Hendrik Roux van der Merwe Chairman and independent non-executive Andries Willem Brink Independent non-executive (also the lead independent director) Akhter Alli Deshmukh Independent non-executive Hendrik Johannes Faul Independent non-executive Mamokete Ramathe Independent non-executive COMPANY SECRETARY Andrew Colin Beaven 6 Dwars Street Krugersdorp 1739 South Africa PO Box 158, Krugersdorp, 1740 South Africa JSE SPONSOR Investec Bank Limited (Registration number: 1969/004763/06) 100 Grayston Drive, Sandown Sandton, 2196 South Africa CORPORATE INFORMATION
Page 37
41 MASTER DRILLING INTERIM RESULTS 2026 INDEPENDENT AUDITORS Deloitte 5 Magwa Crescent Waterfall City, Gauteng, 2090 South Africa SHARE TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited (Registration number: 2004/003647/07) Rosebank Towers, 15 Biermann Avenue Rosebank, 2196 (Private Bag X9000, Saxonwold, 2132) South Africa INVESTOR RELATIONS CONTACTS Izak Bredenkamp Master Drilling Group Business Development Manager Telephone: +27 18 771 8100 Mobile: +27 71 179 2039 E-mail: info@masterdrilling.com GENERAL E-MAIL ENQUIRIES info@masterdrilling.com MASTER DRILLING WEBSITE www.masterdrilling.com COMPANY SECRETARIAL E-MAIL Companysecretary@masterdrilling.com Master Drilling posts information that is important to investors on the main page of its website at www. masterdrilling.com and under the “investment and multimedia” tab on the main page. The information is updated regularly and investors should visit the website to obtain important information about Master Drilling. CORPORATE INFORMATION continued
Page 38
42 MASTER DRILLING INTERIM RESULTS 2026 NOTES
Page 39
43 MASTER DRILLING INTERIM RESULTS 2026 NOTES
Page 40
44 MASTER DRILLING INTERIM RESULTS 2026
Page 41
www.masterdrilling.com