Emeco (ASX:EHL) is well placed to continue to deliver earnings growth in FY26 following the release of financial results showing a lower cost base, reduced debt levels, and continued positive production activity in the mining sector.
The provider of equipment rentals and rebuild and maintenance services to the mining sector has reaffirmed its FY25 earnings guidance leading into the financial year-end.
This includes an operating EBITDA target of $300 million; 2H25 operating EBIT run rate expected to drive return on capital to circa 18%; and FY25 stay in business capex, net of disposals expected to be around $155 million to $160 million.
Emeco CEO Ian Testrow says Emeco continues to demonstrate its resilience and leverage its strong competitive advantage in the market to drive performance and grow earnings despite some weather-related impacts experienced in the second half of the financial year.
“Disciplined cost management, project renewals, improved contract commercials and a major focus on equipment redeployment assisted to mitigate the impacts of wet weather,” says Testrow.
“The group maximised its use of existing equipment with a prudent capital expenditure programme, which included nil growth capex for the year, to drive stronger cash returns for shareholders.
“We are well-placed to finish FY25 on a positive note, delivering on our FY25 earnings guidance targets.”
Emeco is a company that provides rental fleet solutions for owner-miners and mining contractors. It has over 1,000 pieces of equipment, a network of workshops and a proprietary asset management system.
Write to Adam Orlando at Mining.com.au
Images: Emeco
