The effect of the Covid-19 pandemic has been minimal on Australian heavy mining equipment rental company Emeco, allowing the firm to grow its revenues and profits during the financial year ended 30 June 2020.
In the context of revenue growth, from AU$464.5 million in 2019 to AU$540.4 million in 2020, Emeco saw its EBITDA (earnings before interest, taxes, depreciation and amortization) increase from AU$214 million in 2019 to AU$246.1 million in 2020.
Emeco’s Managing Director Ian Testrow said, “The rental business continued to achieve growth in earnings and margins, driven by strong customer demand and our ongoing cost focus.”
He added, “With the onset of Covid-19 in 2020, our management team immediately prioritised the health, safety and welfare of all Emeco people, investing significant time and energy into implementing policies and procedures.
“These policies and procedures also ensured minimal disruption to the workforce and our operations.”
However, although the impact of the pandemic was not substantial, Emeco did see a slight decline in utilisation in the fourth quarter.
“In the Western Region,” Testrow said, “there were some increased costs related to social distancing and due to border closures. We have since seen the Covid-19 situation stabilise.”
During the year, Emeco said it had secured a number of key, longer-term contracts across Australia, and built up its Force workshop business, which has broadened the company’s customer service offering.
“The Force workshops business continued to see significant growth in activity as a result of servicing the Emeco and Pit N Portal fleet, in addition to growth in retail works,” Testrow said.
At the end of February 2020, Emeco acquired mining services company Pit N Portal, which was said to have been performing in line with expectations.
“Pit N Portal further expands Emeco’s service offering to include hard-rock underground equipment and mining services (including on-site infrastructure, operators and technical and engineering services),” says Testrow.
“Pit N Portal also vastly improves our commodity and customer diversification through a number of long-term hard rock projects with mid-tier mining customers.”
This is part of Emeco’s strategy to become more sustainable and resilient.
Looking ahead with confidence, Testrow said, “The company is expecting another solid year in FY21, with focus on new longer-tenure, fully maintained contracts which provides additional commodity diversification.”
He added, “With the equipment market remaining tight, Emeco is well placed to service market demand and we are confident in our ability to redeploy fleet into new projects.”