Mackay-based Mastermyne Group says investing in equipment and keeping a tight rein on costs have helped it deliver a solid result during a low point in the coal price cycle.
Revenue dropped to $111 million in the first half of this financial year, compared to $136 million in the previous six-month period, but EBITDA margins were up to 9 per cent and it recorded a net profit of $2 million.
“There is no doubt that the coal price has had an impact on our first half results as our clients and customers responded to the price weakness,” Mastermyne managing director and chief executive officer Tony Caruso said.
“But what is very pleasing for us is how again our operating model has us set up to respond quickly and appropriately in these cycles and, despite lower revenue, our margins were able to be maintained and improved.”
He said Mastermyne had continued to invest in its “Diversify and Grow” strategy and progress several whole-of-mine opportunities.
With the strong recovery in coal prices, these were now more likely to commence in the calendar year, he said.
“The Crinum underground project is now well progressed and the company has been appointed as the coal mine operator,” he said.
“During the first half the company successfully re-entered the underground mine workings in conjunction with Queensland Mines Rescue to re-establish ventilation and verify the underground conditions.
“The mine is now in a period of care and maintenance awaiting the final
investment decision to commence underground production with the decision expected during the second half of FY2021.”
Tender opportunities in hard rock
Mr Caruso said Mastermyne had maintained its focus on diversifying the business and recently appointed a hard rock general manager.
“Through the period we have seen a number of hard rock tender opportunities flow through the business and our confidence is growing that we will be successful in winning work in this area,” he said.
“Alongside our organic growth strategy is growth by acquisition and we continue to explore opportunities in this regard.
“All in all, whilst it has been a tougher half due to coal price weakness we are confident with what we are seeing in terms of a recovery in the coal sector and we are confident with our approach to diversifying and growing our business.
“We have a strong order book, an improving pipeline of tenders and several
WOM (whole of mine) opportunities which can potentially land in the near term so we are looking forward to the second half.”
The group’s order book, which is heavily weighted to metallurgical coal projects at more than 95 per cent of the business, stands at $595 million.
Of this, $117 million is to be delivered 2HFY21, $201 million in FY2022, and $278 million in FY2023 and beyond. In addition to the contracted works, the company forecasts a further $30-40 million per annum in recurring and purchase order work.