re: Ann: Presentation to Merrill Lynch Emergi... Interesting...

re: Ann: Presentation to Merrill Lynch Emergi... Interesting Presentation!!

Emeco has been hit hard this year because it is a service provider to the mining industry. It one stage SP fell significantly due to the weather (heavier rains late in the wet season). This was sentiment driven and the SP recovered in the short term.

My perception is that Emeco still suffers a "sentiment hangover".

The objective of the presentation was to show Emeco as a well run company with competent management (at least), a history of value creation, a strong balance sheet and a spread of activities across a range of commodities and economies.

All true!

Outlook (P18):

.. Recent wins in gold and iron ore but no start dates mentioned
.. Coal contracts extended means no upside/downside here
.. Some coals contracts concluded and NOT extended (are these the Queensland coal mines that are winding down??)
.. Demonstrable growth in Canada and Chile
.. Options in Indonesia but nothing firm (and in any event this has tended to be a low margin market for Emeco)

Most importantly I note no comment on financial outlook. I suspect this is because Emeco Management is not confident enough to make a positive statement (i.e. higher earnings), nor do they feel the (continuous disclosure) need to make a negative statement (i.e. earnings downgrade).

The international growth looks like it is being balanced by the losses (contracts concluded) in Australia.