Emeco hits first profit since 2013

Heavy equipment supplier Emeco Holdings has recorded its first period of net profit since 2013 as the company cited improving market conditions as a key driver of increased earnings.

Perth-based Emeco posted operating earnings of $67 million, up 140 per cent on the same period last year, with profits totalling $14.4 million.

Managing director Ian Testrow said a number of factors had contributed to the result.

“Our strong financial results were driven by improved market conditions and our strong operational excellence focus and cost discipline,” he said

“In addition, we have achieved a significant increase in operating earnings before interest and tax and our first period of positive operating net profit after tax since 2013, which represents a significant milestone for Emeco.”

The company also announced a 33 per cent reduction in total recordable injury frequency rate for the half-year.

Mr Testrow said the company had a positive outlook going forward.

“The outlook for the remainder of FY18 and beyond is positive, as improved market conditions have resulted in project wins and increased demand for equipment,” he said

“With capacity for our fleet to work harder, there is a significant opportunity to increase operating utilisation for future earnings growth.

“We expect utilisation rates and revenue to pick up throughout the second half of the financial year.”

Mr Testrow said the company's $70 million purchase of Force Equipment last year had created a 20 per cent saving in component costs for the business.

Shares in Emeco finished up 1.7 per cent at 30 cents each.