Mastermyne rides the underground contracting boom

MASTERMYNE’s underground division has been the driver behind the company’s growth in the six months to December 2011, leading to a 72% rise in interim net profits to $7.84 million struck from a 69% higher revenue year-on-year of $124.3 million.
Mastermyne rides the underground contracting boom Mastermyne rides the underground contracting boom Mastermyne rides the underground contracting boom Mastermyne rides the underground contracting boom Mastermyne rides the underground contracting boom

Mastermyne at work.

Lou Caruana

The underground division continued to experience strong demand for customary contract services with a large pipeline of projects, the first of which was expected to begin next financial year, chief executive Tony Caruso said.

“In the first six months of the financial year the group has exceeded expectations due to the organic growth of the existing project base. This has set the company up for a strong second half performance.

“We are also pleased with the step change in our safety performance which under the more stringent Occupational Safety and Health Administration classifications has been continually improving from where we finished the FY2011 year.”

The remainder of the current financial year will see the underground division focus on delivering further growth from the existing project base and commissioning the last of the capital equipment purchased in FY2011.

Underpinning these new project opportunities is an order book that has grown to in excess of $200 million for FY2013, up from $141 million, excluding traditional recurring revenue of approximately $30 million.

Total full time employee numbers now stand at 1012 – a net increase in workforce numbers of 23% in the six months to December.

Construction has started on a second underground training centre based in Brisbane with final commissioning expected in April 2012. The new centre will train-up “cleanskins”, as Mastermyne’s existing training centre in Mackay is already doing.

Tendering activity was expected to increase in the second half of the year and would be focused on a mixture of brownfields and greenfields opportunities, Caruso said.

The underground division will continue to source brownfields projects in existing underground operating mines that are low on the cost curve and add to these projects with new greenfields opportunities.

The engineering division would continue to expand as the demand for minor equipment and consumables increased with the number of new coal mines as would the services division with the increase in construction activity, he said.

Demand for domestic coal remains strong and the investment in infrastructure by major mining houses suggests that this cycle will continue for some time and with it the demand for contract services.

Complementing this current demand for Mastermyne's services was the ongoing expansion of new underground coal mines over open cut mines placing Mastermyne in a very strategic position as one of the dominant underground coal contractors, Caruso said.