Emeco earnings, profit up in FY20

Mining services company Emeco Holdings has reported a 39 per cent rise in operating net profit to record $87.5 million for the full year.

Emeco also recorded higher earnings before interest, tax, depreciation and amortisation in the 12 months to June 30, with operating EBITDA of $246.1 million up 15 per cent on FY19.

Osborne Park-based Emeco said its operating EBITDA margins of 45.5 per cent – down from 46 per cent in FY19 – fell due to the impact of its Pit N Portal acquisition in January, where Emeco paid $72 million to purchase the underground mining equipment and services provider.

Emeco says Pit N Portal generates naturally lower margins due to additional services provided to customers.

Emeco also said it had generated free cash flow of $72.1 million in FY20.

Managing director Ian Testrow said, notwithstanding the onset of COVID-19, the company had reported strong earnings and margins.

“In FY20, we also progressed against our strategy of creating long-term projects and embedding ourselves in our customers’ operations through additional services and technology,” Mr Testrow said.

He said the company had also improved its commodity diversification, reflected in its gold and iron ore revenues, which had doubled and tripled respectively.

“This was part of the strategic rationale for the acquisition of Pit N Portal… and represents a significant transaction for the company,” Mr Testrow added.

“Our goals in FY21 are consistent; to continue to diversify our commodity mix, expand the services the business provides, adding capital-light earnings, and continue to generate strong return on capital and cash flows to further deleverage.”

Mr Testro also said Emeco's workforce had expanded to more than 1,000 people nationwide.

The company was trading 5.6 per cent lower at 3:52pm AEST to 98 cents per share.