The step change in the number of rigs deployed in 1H20 has been partially undone by some recent COVID-19 (C-19) related rig suspensions. Further, we expect most mining services businesses to incur additional costs keeping employees safe and have pared back forecasts for the tail end of FY20 and into FY21. It will now probably take longer for proof Drilling segment margins can be sustainably held above 20%. There is considerable upside potential at steady state post C-19, but until then investment remains speculative. Our valuation has dropped to $0.275 (prior $0.30).
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