Emeco flags market recovery and best EBIT performance since 2013
Provider of equipment rental services to the mining industry, Emeco, has released an encouraging second quarter operational update with group utilisation of 85% an improvement on the previous corresponding quarter’s 75%.
The group also recorded its first half of positive EBIT since the second half of fiscal 2013 in the six months to December 31, 2016.
In an indication that the company is achieving both improved efficiencies, as well as benefiting from a better industry conditions, there was a significant uplift in EBITDA margins in the second quarter of fiscal 2017. These were 38%, double that achieved in the previous corresponding quarter.
Cash at December 31, 2016 was $34 million with $7 million in operating cash flow generated in the second quarter.
Commenting on the turnaround, Managing Director Ian Testrow said, “The operational improvements Emeco has made in the past 18 months with the resultant improvement in EBITDA margins to 42% up from 19% in the prior corresponding period provides a strong future growth platform for the merged Emeco, Orionstone and Andy’s businesses”.
Shares in Emeco doubled from approximately 4 cents per share in in early August to hit a peak of 8.5 cents later that month, but have been volatile since, fluctuating in a range between 5 cents and 8 cents.
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