Australian mining equipment rental major Emeco Holdings has reported a positive six months to end 2020 (H1 2021 of the Australian financial year), with strong earnings, cash flows and return on capital despite COVID-19 and coal conditions, demonstrating the resilience of the business. Going forward Emeco expects growth in 2021/2022 as its idle fleet of large trucks and excavators are placed into new projects.
Eastern Region rental has stabilised, following challenging coal conditions, with recent project wins to commence later in 2021 – project wins in gold, iron ore and other metals facilitated growth in Western Region rental, with gold revenue more than tripling since the last six months of 2019 (H1 2020 financial year) and metals revenue now comprising 57% of group revenue, up from 38%.
Client gold mining company Saracen stated: “The implementation of the EOS production monitoring system at our Thunderbox and Porphyry open pit operations has enabled our site teams to manage performance in real time and hence make effective production decisions on the go. We are confident, based on early results, that this will result in better operational performance across our sites.”
Some 30% of the Western Region fleet remains on single-shift construction works providing earnings and margins upside potential once transferred to double-shift projects. Emeco is also currently moving a further 15 assets from the Eastern Region to Western Region due to significant demand in iron ore and gold, with potential for more transfers, if required.
There has been significant growth in Pit N Portal earnings from underground rental and mining services projects, including the commencement of the Mincor nickel project. Pit N Portal is also expanding into surface mining services, supported by Emeco rental equipment and the Emeco Operating System (EOS) fleet management and mining technology platform. Workshops also continue strong earnings and retail revenue growth.
Looking in more detail at Pit N Portal, there was a high level of activity as projects ramped up, with a strong tendering pipeline. There was an early commencement of the significant Mincor underground nickel project, comprising the following: civil and infrastructure works and commencement of mining operations at the new Cassini mine and re-establishing and commencing mining at the North Kambalda operations.
Pit N Portal was also awarded its first surface mining project (Red 5’s Great Western) supported by EOS technology and in partnership with Emeco Rental, while it acquired a mining recruitment business, with a strong focus on the goldfields region, to access the skills required for continued growth.
