Barminco makes strong turnaround

2nd February 2018 By: Megan van Wyngaardt - Creamer Media Contributing Editor Online

JOHANNESBURG ( - Underground hard-rock mining contractor Barminco on Friday reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) of $75.6-million for the half-year ended December 31, 2017, up 12.2% from the prior year.

Barminco CFO Peter Bryant said the result was a significant turnaround on the company's performance in the second half of the 2017 financial year.

"It is pleasing to deliver a much-improved set of results after what was a disappointing 2017 financial year, with earnings before interest and tax (Ebit) in this half alone better than last year's full year result," he noted.

The company posted Ebit of $37.3-million, an 18.6% increase on the first half of 2017.

Barminco also reported proportionately consolidated revenue - which included its share of its 50% joint venture interest in African Underground Mining Services (AUMS) - of $349-million, an increase on the $335.2-million reported in the first half of the 2017 financial year.

"The turnaround has been driven by the rectification of two contracts that had been weighing on the business - the Kundana contract transitioned back to Northern Star and our Indian Rampura contract was successfully reset - coupled with further efficiency gains made across the business.

"Barminco generated profits from each of the company's nine underground mining projects across Australia, India and Egypt, while the consolidated result includes our 50% share of the ongoing solid performance from AUMS."

Barminco CEO Paul Muller, who started in November 2017, said the company was well placed for another solid result in the second half.

"Looking ahead, we have already secured more than $80-million in contract extensions at Nova Bollinger and Rampura Agucha in the past week and are also experiencing increased tender activity across Australia," he highlighted.

"We expect earnings to be consistent in the second half of the year as we continue to deliver on projects safely and efficiently for our clients."

At a statutory level, Barminco reported a net profit after tax of $10.5-million, up from the prior year's $6.2-million profit.

Last year, the company also refinanced its long-term debt facilities by issuing $350-million in senior secured notes with a coupon of 6.625%, maturing in May 2022. The currency exposure on the notes is fully hedged.