SOFT MINING CONDITIONS HAMPER AUSTIN ENGINEERING

Written on the 2 March 2015

SOFT MINING CONDITIONS HAMPER AUSTIN ENGINEERING

SUBDUED conditions in the mining industry have impacted Austin Engineering Limited's (ASX:ANG) half-year results.

The mining and earthmoving equipment manufacturer posted a net loss after tax of $41.6 million, down from its $860,000 profit in the previous corresponding period.

The loss has been attributed to an impairment expense of $40.88 million, after assessing the recoverable amount from its operations in Chile, Peru, Hunter Valley and Mackay.

Half-year revenue was down four per cent from the previous period to $102.05 million, while earnings before interest tax depreciation and amortisation (EBITDA) lifted 10 per cent to $9.04 million.

Despite revenue and EBITDA remaining consistent with previous half-year results, Austin reported a slower workload in HY15 due to reduced capital expenditure in the mining sector.

CEO Michael Buckland says the company's performance was a reflection of stabilisation in the market.

"Despite the industry continuation of reduced expenditure while increasing production levels, the company was able to increase its gross margin percentage versus prior years," Buckland says.

Hire operations in Perth and Pilbara performed to budget and secured new clients, while Austin operations across the eastern seaboard suffered lower levels of activity in the coal mining sector.

Buckland says despite booming production levels, mining companies are continuing to focus on cost cutting and increasing equipment usage.

He says the company is uniquely positioned to provide maintenance services and productivity solutions as the needs of long-term clients change.

"Austin is very well positioned to capitalise on any increase by miners in replacement and new expenditure within a recovery cycle," Buckland says.

"We anticipate that customers will continue to be seeking productivity gains from their capital allocations for equipment that has exceeded its life cycle.

"Austin's range of customised products is designed specifically to customer specification to achieve productivity advantages."

ANG will continue to focus on product development to boost revenue, as well as apply for a number of major tenders launched in the coal industry.


Latest News

PROFIT BOOST FORECAST AT VILLA WORLD

VILLA World has forecast profit growth of 5 per cent in the first half of FY17 in an earnings guidance released to th...

WP CURVE SOLD TO GODADDY

NASDAQ-listed tech company GoDaddy has bought Gold Coast's WP Curve for an undisclosed sum.

The subscription-b...

BOARD SHAKE-UP TAKES OUT SURFSTITCH FOUNDER

ONLINE actionwear retailer SurfStitch Group (ASX: SRF) has announced a major board shake-up in a move that effectivel...

ORIGIN TO DIVEST UPSTREAM OIL AND GAS BUSINESS

ORIGIN Energy will spin off its upstream oil and gas business in an as-yet unpriced IPO.

It will allow the Sydney-...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter