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Austin Engineering

Austin Engineering (ANG) Trucking to an Improved 2H21

616 Views02 Apr 2021 08:31
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SUMMARY

Austin Engineering (ASX:ANG) is a global designer and manufacturer of consumable and capital mining equipment, together with on and offsite repair and maintenance services, with revenue derived from Asia Pacific (50% in FY20), North America (29%) and South America (21%). The group has an estimated 10% global share of the above ground mining truck body market and is also strong in excavator buckets. COVID-19 has had an impact on the North and South American markets which has resulted in significant restructuring including a 23% headcount reduction across the company in the last twelve months, and a wind down of operations in Colombia. The Asia/Pacific region remains strong and at, or near, capacity, is the key driver in FY21 NPAT guidance of “in excess of $9m”, albeit skewed to the second half (1HFY21 NPAT was $1.5m). New equipment sales ultimately drive the medium-term revenues of ANG with more units on the ground providing more re-fit/replacement opportunities for their truck body & bucket products. Growth opportunities also exist in expanding the product range into underground mining and entering new regions. Recently the first ever sales into Africa (Egypt) and Eastern Europe (Ukraine) were achieved. The company’s balance sheet has improved markedly over the last 4-years due to restructuring, with net debt down from $45.9m FY18 to $15.4m in December 2020. Excluding lease liabilities, net debt was $5.36m at 31 December 2020.

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