Emeco announced a 6% rise in revenue to $A67 million for the March quarter compared to the same time last year, as well as an initial cost reduction target of $10 million per annum through a business improvement program.

The increase in revenue was geared by a higher fleet utilisation rate averaging 75% for the quarter, up from 53% in Q3 FY14.

The New South Wales business led Australian operations with utilisation of 94%, representing more than 100 machines currently on rent with long-term clients and a continual flow of enquiries for additional fleet.

Strong performance is also expected in Queensland in the next quarter thanks to two new contracts that Emeco estimates will boost its fleet utilisation rate by 50% to 82%. Emeco also has multiple active bids currently in progress and is considering moving additional fleet into the region to meet a strong business development pipeline.

In Western Australia, utilisation was at 53% and was underpinned by two fully maintained fleet rental contracts with mid-tier gold miners. While six bids were in progress, Emeco said it was considering an opportunity to move some of its idle fleet to the eastern states.

Overseas, the Canadian rental business performed strongly with an average rate of 83% for the key period of mid-December to mid-March. However, the end of the winter season has triggered a decline in demand, with fleet utilisation dropping to a current rate of 68%.

In Chile, business remained strong with a 92% fleet utilisation rate across three projects, although the level of resources currently deployed on the Encuentro project continued to negatively impact margins following delays in the ramp-up of equipment onsite.

Looking ahead, Emeco will continue to work on improving earnings before interest, tax, depreciation and amortisation margins and reduce costs, with an initial target of $10 million from the group’s annual cost base which savings will be fully embedded for the start of FY16.

Meanwhile, Swick announced a 16% jump in revenue to $32.7 million for the quarter and revealed future automation plans to boost its cost-cutting strategy.

Increased revenue was mainly due from continuing rising demand for underground diamond drilling from existing clients, with the deployment of an additional seven rigs leading to an 83% rate of utilisation, compared to 73% at the same time last year.

Swick managing director Kent Swick said this was due to working with clients to lower the direct and indirect costs of drilling while maintaining a high quality service.

“Obviously, Swick has done what it can to reduce its costs to our clients over the last couple of years and as a result the business has maintained reasonable utilisation during the downturn,” he said.

“Whilst it is always risky to look too far forward in this type of business, the short to medium term rig utilisation looks healthy.”

This is not the case in its reverse circulation drilling division, where recent low utilisation has prompted a review of the carrying value of the fleet, with Swick expecting to make impairment adjustments by the end of the year.

Swick will also continue to cut costs from a broader company perspective and revealed automation plans to further downsize its workforce.

“At Swick, we believe that for the long-term sustainability of the mineral drilling markets in which we operate, both the clients and contractors must work together towards operating in the near term with semi-autonomous equipment and eventually progress when practical to fully autonomous equipment,” Swick said.

Swick has already observed good results from the establishment of a single man operation for some rigs on multi-rig sites on a trial basis, and the company expects to upgrade its underground diamond drill fleet to enable unattended and semi-autonomous drilling in the next three years.

Swick’s full year outlook has not changed, with group revenue expected to be in the range of $125-135 million with an earnings before interest, tax, depreciation and amortisation margin of between 13-16%, excluding impairment charges.

The current order book stands at around $154 million.

Swick currently operates at 24 mine sites for 19 clients, four of which are international.