Emeco said it expected an operating net loss after tax for financial 2013 of $A10-17 million, which excluded any potential impairment losses that might arise from asset disposals in the future.
This compares to an operating net profit after tax of $35.2 million in financial 2013.
Based on Emeco’s year-to-date performance and its review of the financial 2014 forecast, the company expects full-year operating earnings before interest tax depreciation and amortisation to $90-105 million.
Operating EBITDA was $188.3 million in the previous financial year.
The company said that earnings had been impacted by customers’ ongoing caution towards earthmoving activities and focus on reducing operating expenditures in light of the ongoing subdued global commodity environment.
“The Australian business has remained challenging, particularly in Emeco’s main commodity sectors of thermal coal and gold,” it said today.
“Overburden activity remains depressed as miners focus on production, which has significantly reduced overall earthmoving volumes in the short-term.
“Furthermore, the Australian market remains highly competitive which has significantly impacted rental rates resulting in margin pressure for this business.”
Meaningful improvement in earnings is expected in the second half of the financial year as the Canadian oil sands market enters winter and positive business developments in Chile continue.
However, global fleet utilisation remains flat compared to financial 2013 at 43%, due largely to competitive market conditions and ongoing softness in activity in coal and gold.
Emeco said it intends to leverage its operations in Canada and Chile to further diversify its earnings in new markets while working with customers to ensure flexibility in the current market.
It also noted efforts to take a disciplined approach to balance sheet management, highlighting significant debt reductions this year.
The company reduced its net debt position during calendar 2013 by $78 million from $455 million at December 31 2012 to $377 million today.
It marked particular success with group-wide asset sales which totalled $24 million for the financial year to date and capital expenditure which will be $30-40 million for the full year.
In financial 2013, sales and parts revenue was $27.5 million and sustaining capital expenditures was $71.8 million.
