Emeco flags HY profit hike, lowers FY...

Emeco flags HY profit hike, lowers FY guidance
http://money.ninemsn.com.au/article.aspx?id=750000

11/02/2009

Emeco Holdings Limited (EHL) expects to report an NPAT of $39.1 million for the six months to 31 December, a 27.9% jump from the previous corresponding period. However, the company lowered its full year outlook from between $75 million and $81 million to $70 million.

The company said that its revised earnings forecast for the full year would still be a slight increase from last year's $70 million NPAT.

Emeco also expects to announce net tangible assets per share of $0.82 as at 31 December 2008, the company advised.

CEO Laurie Freedman said the revision down was a result in the deterioration in the global mining and construction industries, not a reflection on the underlying strength of the company.

"Our business model is sound, and the strength of Emeco is best demonstrated by the delivery of a record first half result. Our revised guidance is based on the back of extraordinary market conditions," he said

"We believe the quality of Emeco's fleet and its global diversification position the business very well to capitalise upon the return of normal market conditions, the expected boost from major infrastructure spending projects and a continuation of the capital preservation theme throughout the resource industry."

The company said that there was a decline in demand from customers exposed to base metals and coking coal and from customers forced to close mines due to low commodity prices.

However, the company benefited from commodity gains on certain metals and the business strategy of its customers.

"These declines have been to date partly offset by demand from customers exposed to thermal coal, gold and iron ore, and those looking to preserve capital and operating flexibility through the rental model," the company said.

Emeco said that its recent refinancing had left the company with significant room for debt through to 2011, though would continue to focus on improving operating cashflows.

Emeco is slated to release its interim financial statements on Wednesday, 25 February.

At 1050 AEDT, Emeco were trading up 4c to 25c.