Disciplined strategy execution and strong Underground performance underpin Perenti’s 1H21 financial results
Perenti has delivered robust operating and financial results for the first half of financial year 2021 (FY21) and continues to deliver value and certainty for our clients through disciplined strategy execution, despite the challenging global environment.
Mark Norwell, Managing Director and CEO of Perenti, said: “The financial and operational performance of the Group in the first half of FY21 was very encouraging as we continue to take steps to deliver on our 2025 Group Strategy while navigating the challenging and ever-evolving COVID-19 pandemic, which continues to impact our international operations.
“Our COVID-19 taskforce has done a fantastic job putting the steps in place to protect our people and our business from the most severe impacts of the pandemic, allowing us to deliver continuity of service for our clients. While this is a great achievement, we must also recognise that our financial results have been impacted, not only by COVID-19, but by the strengthening of the Australian dollar against the United States dollar and a softer than expected Australian east coast equipment rental market.
“Our Underground business delivered record earnings of $110.0 million, representing 90% of our Group EBIT(A) at an average margin of 15.1%. In addition, since 1 July 2020 the Group secured $970.0 million of new underground work and contract extensions, predominantly in Western Australia, demonstrating the strength of Perenti and our ability to generate value for our clients through the delivery of high-quality mining solutions.
“The Surface business remained profitable, generating $4.0 million EBIT(A), supported by our Australian operations and the Sanbrado Project in Burkina Faso. During the half we completed our strategic review of African Mining Services (AMS) and implemented a number of the report findings, including progressing negotiations of an early exit from the loss-making Yanfolila contract and the conclusion of the sale of Boungou assets. Upon completion, these two actions are expected to generate between $80 to $90 million of cash, of which $14 million has been received, to redeploy across the business where we are targeting to generate returns of +20%.
“Another outcome of the strategic review is the consolidation of our Surface and Underground businesses into a single Mining business, under the leadership of Paul Muller as our Mining CEO. Paul has been the CEO of Barminco for 3.5 years and is highly experienced in both surface and underground mining and is an excellent leader with an enviable track record of delivering positive outcomes and I look forward to his continued success.
“Looking ahead, the resources sector continues to go from strength to strength. Exploration expenditure is forecast to increase during 2021 and the value of committed mining projects, in Australia alone, is the highest in a decade with many more feasibility stage projects in the pipeline. Perenti has a strong balance sheet, a highly experienced team with a track record of delivering excellence across our businesses. The significant investments we have made in our people, our business structure and our systems will ensure we continue to be well positioned to capitalise on the expected resources sector growth as we deliver against our 2025 strategy.”
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