Perth, Australia-based heavy equipment company Emeco Holdings reported operating net profit after tax of AU $41.1 million for fiscal year 2010. The result reflected strengthening momentum in Emeco’s key markets with operating NPAT increasing from $13.6 million in the first half of fiscal 2010 to AU $27.5 million for the second half.

"The operating environment was challenging in FY10 for mining services companies as the sector recovered from a severe downturn,” said CEO Keith Gordon. “However we have been encouraged by the increasing activity levels across 2H10 as our customers ramped up production and resumed development activities.

“We also completed a strategic review of the business portfolio over the course of the second half that will result in Emeco focusing on customers in our core mining markets of Australia, Indonesia and Canada, with particular emphasis on coal, iron ore, gold and oil sands.”

Gordon added that in addition to the company’s exit of its U.S. and European rental business, it also plans to sell its Victoria, Australia, rental business, and to downsize and realign the Australian sales and parts business to free up capital to refocus on core rental markets.

Emeco’s Canadian rental business was hit hard by the global economic downturn and low oil prices, since much of the company’s construction-related Canadian business was in the oil sands sector. Despite unseasonal weather events in the second half, profitability gained momentum towards the end of the financial year with utilization finishing at 84 percent. This resulted in a full-year operating EBIT of $2.7 million; down 71.6 percent, Emeco said.

Significant progress was made in FY10 to reposition the Canadian fleet toward a full complement of mining equipment to increase exposure to mining activity in the oil sands and pursue diversification opportunities in bulk commodities across the broader region. This fleet repositioning was executed through the acquisition of 11, 190-tonne trucks, the transfer of approximately $26 million in mining fleet from the U.S. business, and the disposal of 137 units of small civil equipment.

With North American operations now based in Edmonton, Alberta, Canada, Emeco North America is No. 58 on the RER 100.