MINING equipment company Emeco shares are soaring despite the company’s downward revision of its full year earnings guidance.
The Australian supplier says the earnings downgrade was prompted by global economic slowdown in mining industry.
The business says since November 2008, the global economy and financial markets have continued to weaken resulting in a rapid deterioration in the global mining industry.
The company says it is experiencing an emerging decline in demand from customers who are exposed to the sinking price and demand of base metals and coking coal from their customers. Many mines have been forced to close due to commodity price pressure rendering them sub economic.
However the company said the loss of business had been partially offset by customers in the thermal coal, gold and iron ore sectors and those moving to a rental model to preserve capital and maintain flexibility.
Emeco chief executive Laurie Freedman said the revised guidance was on the back of extraordinary market conditions but the company’s business model remained sound.
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