Emeco Equipment, earthmoving rental and sales specialist based in Perth, Australia, with operations in the U.S., Canada, Australia and Indonesia, expects to report a record interim net profit after tax of AU $39.1 million (about U.S. $25.7 million) for the six months ended Dec. 31, a 27.9-percent increase on the six-month period ended Dec. 31, 2007. Operating free cashflow, including net maintenance capex, is expected to be AU $51.4 million (about U.S. $33.9 million) for the period. The results remain subject to final audit review.
The interim result is in line with Emeco’s previous earnings guidance of AU $75 million to AU $81 million, reflecting strong operational contributions from Emeco’s businesses in the United States, Canada, Australia and Indonesia.
The company said equipment asset values are stable.
At the company’s annual general meeting in November, fiscal-year 2009 earnings guidance was reaffirmed in the AU$75 to $81 million range, despite the global recession. Global markets have deteriorated since and Emeco is experiencing a decline in demand from customers exposed to base metals and coking coal and from customers forced to close mines because of commodity price pressure.
Emeco is now anticipating net profit after tax for the full year to be in the range of AU$65 million to AU$72 million. However, the company expects its rental operations will capitalize on opportunities resulting from tighter credit and operating conditions for its customers.
Emeco is scheduled to release interim financial statements Feb. 25.
“Our business model is sound and the strength of Emeco is best demonstrated by the delivery of a record first-half result,” said Emeco CEO Laurie Freedman. “Our revised guidance is based on the back of extraordinary market conditions. We believe the quality of Emeco’s fleet and its global diversification position the business very well to capitalize upon the return of normal market conditions, the expected boost from major infrastructure spending projects and a continuation of the capital preservation theme throughout the resource industry.”
Emeco, which has U.S. branches in Houston, Atlanta, and London, Ky., and Canadian branches in Edmonton, Fort McMurray, and Grand Prairie, Alberta, and Regina and Saskatoon, Saskatchewan, is No. 54 on the RER 100.
