Emeco is undertaking a three way merger with other suppliers.

Better numbers for Emeco

Tuesday, 28 February, 2017 - 11:43
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Osborne Park-based heavy equipment supplier Emeco Holdings has reduced its first-half net loss after tax by around 70 per cent, to $31.3 million for the six months to December.

That came despite a fall in revenue, which was $87.8 million, 20 per cent lower than the same period in the 2016 financial year

Earnings before interest, tax, depreciation and amortisation across the group up nearly 45 per cent on the first half of 2016, at $33.6 million.

In the Western Australian part of the business, average utilisation was 59 per cent, up from 36 per cent, and EBITDA was $4.5 million, an improvement of $800,000.

It comes two months after Emeco’s creditors blocked a planned restructure, then reversed their decision two days later when offered more equity.

The company’s plans included a merger with Perth-based Orionstone and Victorian company Andy’s Earthmovers, a deal that was estimated to be worth around $700 million.

Emeco reported integration plans were well advanced, with completion expected before the end of the financial year.

Emeco managing director Ian Testrow said the performance had been improved thanks to cost discipline.

“Notwithstanding first half 2017 operating revenue of $87.8 million was down when compared to first half 2016, primarily as a result of the repositioning of the Canada business, we have generated significant improvement in our EBITDA margins which has helped us to deliver our first half of positive EBIT since 2013,” he said.

“With increased levels of customer activity, the team aims to accelerate these positive results through the second half, particularly through an improvement in our operating utilisation with our ‘customer first’ approach.

“We continue to work with our existing and potential customers to widen our value proposition and deliver innovative equipment solutions, focusing on customer productivity and cost efficiencies over the long term, which will be facilitated by our strategic partnerships with industry peers and our (Emeco Operating System) technology.”

“We are also working towards the completion of the recapitalisation and mergers with Orionstone and Andy’s.

“This transaction will significantly strengthen Emeco’s balance sheet and extend our debt maturity, reduce the average life of our fleet and enhance our market position.

“This will provide Emeco with a sustainable platform for growth over the immediate and long term.”

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