Emeco flags significant earnings rise

Emeco Holdings expects its earnings for this financial year to rise by nearly 40 per cent compared with the prior corresponding period.

In a statement, the mining equipment supplier said it expected operating earnings before interest, tax, depreciation and amortisation for the 2019 financial year of between $211 million to $213 million.

Its EBITDA margin is also anticipated to rise from 40.2 per cent for the 2018 financial year to between 46 per cent to 47 per cent for this year.

Its return on capital is set to be approximately 20 per cent, the highest since the company’s IPO and up from 13 per cent in the previous cycle peak in the 2012 financial year.

Emeco said recent purchases of high-utlisation assets were expected to come in below a budgeted $90 million and were on target to generate $25 million EBITDA in FY20.

“Market conditions continue to be positive and outlook for FY20 remains strong, with total material movement continuing to increase and equipment supply remaining tight,” it said.

Shares in Emeco jumped 13.9 per cent to trade at $1.88 each at 4pm AEST.