Emeco Holdings (ASX:EHL)The company, which provides equipment rental and maintenance services to the mining sector, has published a trading update and earnings guidance for its 2025 financial year ending 30 June. The company expects operating EBITDA to exceed $300 million, reflecting a steady continuation of FY24 performance trends.
Managing director and CEO Ian Testlow highlighted positive production forecasts for gold and bulk commodities, despite the weak nickel and lithium situation. “Our competitive advantage lies in our rental and equipment rebuild model, combined with our national presence in Australia’s major mining regions. position,” Testlow said.
The main financial forecasts for fiscal year 2025 are as follows.
- Capital Expenditures: Continuation capital expenditures are $160 million to $165 million (or $155 million to $160 million after deducting asset dispositions), while growth capital expenditures are minimal. It will remain limited.
- Depreciation: Estimated to be $160 million to $165 million.
- Return on Capital (ROC): expected to reach 18% by the second half of the year, moving towards the company’s long-term target of 20%.
The first quarter operational update shows mixed results. Off-rental activity occurred in the Queensland ground rental segment, which was primarily offset by cost reductions. Capacity utilization rate is expected to improve in the second half. The underground rental business is already seeing increased usage, fueled by demand for base metals and gold.
The stock closed 5.88% higher at 80 cents.
