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Mastermyne reports improved results

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World Coal,

Australian underground coal contractor, Mastermyne Group, has announced improved half-year results for 2H15. The group announced a loss of AUS$0.5 million for the six months to 31 December 2015 compared to a loss of AUS$5.8 million over the same period the year before.

Revenue was up 28% to AUS$99.7 million with earnings up 73% to AUS$3.5 million. The company also reduced its debt by AUS$2.5 million over the period.

“All things considered we are pleased to have delivered a resilient performance amidst the tough conditions being experienced across the resources sector at this time,” said Tony Caruso, Mastermyne’s Managing Director. “Our Underground Division has again delivered a robust results and we are confident that we have built a solid platform, which will enable us to continue to generate cash returns.”

Strong results from underground coal mining business

The mining business delivered revenue of AUS$77.4 million over the period, a 15% increase on the year before. Earnings stood at AUS5.5 million, an increase on 45%.

“The Mining division has delivered a strong financial result and continues to perform across all other key metrics,” the company said. New contracts were signed with Rio Tinto’s Kestral mine and BHP Billiton’s Appin colliery over the half-year period. It also added strata stabilisation to the list of services it can offer to mining clients.

The company has also undertaken several due diligence roles as companies explore acquisition opportunities.

“Whilst this comes at some cost to the business, it strategically places us in a strong position to become the operator of the mine if the transaction completes. We currently have in excess of AUS$355 million of opportunities in this area and will continue to focus on this as a key strategy to bring on new work through the cycle.”

But maintenance and engineering spend remains weak

Meanwhile, its Mastertec maintenance and engineering division continues to suffer from the deferral of maintenance and engineering spending. It reported negative earnings of AUS$2.2 million – down almost 30% y/y.

Mastermyne’s mining order book currently stands at AUS$159.1 million, while Mastertec has AUS$26.7 million of orders on book. Of this, about AUS$55 million will be delivered in the six months to June 2016.

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