Emeco Holdings (ASX:EHL), a provider of equipment rentals and maintenance services for the mining sector, has issued a trading update and earnings guidance for the 2025 financial year ending 30 June. The company projects its Operating EBITDA to exceed $300m, reflecting a steady continuation of FY24’s performance trends.
The Managing Director and CEO, Ian Testrow, highlighted positive production forecasts for gold and bulk commodities, despite weaker conditions for nickel and lithium. "Our competitive edge lies in our rental and equipment rebuild model, combined with our national presence in key Australian mining regions. This positions us to drive performance improvements and grow our earnings," Testrow said.
Key financial expectations for FY25 include:
- Capital expenditure: Stay-in-business capex of $160m to $165m (or $155m to $160m net of asset disposals), while growth capex remains minimal.
- Depreciation: Estimated between $160m and $165m.
- Return on Capital (ROC): Anticipated to reach 18% by the second half, trending toward the company’s long-term goal of 20%.
Operational updates show mixed outcomes in the first quarter. The Queensland surface rental segment experienced some off-hire activity, largely offset by cost reductions. Equipment utilisation is expected to improve in the second half. Underground rental operations, supported by demand for base metals and gold, have already seen increased utilisation.
Shares closed 5.88% higher at 80 cents.
