19/10/2015 - 15:12

Solid start to FY16 for Emeco

19/10/2015 - 15:12

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Mining equipment supplier Emeco Holdings says its improved quarterly revenue and cash flow came in spite of operating difficulties in Western Australia.

Solid start to FY16 for Emeco

Mining equipment supplier Emeco Holdings says its improved quarterly revenue and cash flow came in spite of operating difficulties in Western Australia.

Osborne Park-based Emeco reported a 12 per cent increase in revenue in the September quarter to $55.2 million, with $9.1 million in operating cash flow generated.

Its group utilisation averaged 75 per cent in the first quarter of the 2016 financial year, up from 59 per cent in Q1 of FY15, while operating utilisation averaged 46 per cent, up from 41 per cent.

Emeco said the improved financial performance was driven mostly by cost reductions and improved work levels at its New South Wales and Chile businesses.

However, a wrap-up of several contracts during the quarter dropped its utilisation to 32 per cent in WA.

“Costs have been reduced to align with reduced utilisation,” Emeco said in a statement.

Managing director Ian Testrow said the company was pleased to begin the financial year in a stronger position.

“NSW, Queensland and Chile remain strong markets for us, however operating difficulties in WA and Canada are offsetting our higher performing regions,” he said.

“Our focus remains on working closely with customers to ensure our service is delivering value.

“Internally the business continues to identify cost reduction opportunities and further developing our Emeco operating system technology.”

As part of its cost reduction program, Emeco is targeting $14 million in reductions in FY16.

Emeco closed 4 per cent higher to 5.2 cents each.

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