Emeco shares drop on first-half results

Mining services company Emeco Holdings has reported a dramatic drop in first-half profit to just $3.3 million on account of weakened coal conditions in the eastern states, despite growing its revenue.

Emeco, which opened 10.3 per cent lower on the ASX this morning, disclosed its net profit before tax had plunged 88 per cent from $26.9 million a year ago.

Its operational earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 3.5 per cent to $117.9 million.

The Osborne Park-based business attributed the loss to challenges associated with COVID-19 and a weakened coal sector, as well as its $72 million acquisition of underground mining equipment services provider Pit N Portal.

By contrast, project wins in gold and iron ore accelerated growth in Western Australia, with EBITDA for Emeco’s Western Region Rental division up 36 per cent to $33.1 million.

Metals projects accounted for 57 per cent of the group’s revenue, which grew by 21 per cent to $299 million.

Emeco was trading 9.3 per cent lower at 3:14pm AEDT to $1.12 per share.