Darkest hour is just before the dawn
Wednesday 22 February 2017
Mackay based mining services business Mastermyne has endured another tumultuous half-year, reporting losses of $1.5 million, but increasing its order book by around 100%.
Revenue in the last six months of 2016 was down nearly 43%, and the number of employees fell to a low of 534 as contracts concluded without any new work starting.
The situation has forced Mastermyne to rethink its business model, and as a consequence, major changes have occurred within in its two-year-old Mastertec business.
Mastertec was set up in 2015 following the purchase of Gladstone maintenance business DMS for $20 million. Mastertec was designed to house all of Mastermyne groups attempts to diversify into above ground and project work, leaving the Mastermyne arm to provide their traditional underground mining services.
However, the company has now decided to jettison what it called some non-core underperforming Mastertec business units, particularly in the fabrication area.
“The Mastertec division underwent a significant restructure during the course of 2016, which included the closure of several workshops,” Mastermyne Group said.
“The discontinued activities were non-core and do not erode the long term strategy of the Mastertec business which focusses on scaffolding and protective coatings work on major infrastructure and ports on a long-term contract basis.”
However, despite the struggles of 2016, the company is bullish about 2017, flagging a return to normal revenues and profits later this year, with around 300 jobs expected to be generated by secured new work.
“The recent recovery in coal prices has resulted in significant increases in tender activity, in particular, roadway development contracts,” Mastermyne said.
“Workforce numbers are increasing from January 2017 based on new work already secured and will continue to increase through to March and April this year.
“At the completion of the first half, the company's combined order book has increased from $123 million to $241 million, and of this approximately $50 million will be delivered in the second half of FY17 along with recurring and purchase order work.”Among the work secured by Mastermyne are a new two-year $50 million contract at the Appin Colliery in NSW, a two-year extension to its umbrella contract with Anglo American near Moranbah, the hire of a continuous miner to a NSW miner, and reaching preferred tender status for roadway development work in NSW.
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