Mastermyne Group Limited reported a 14% rise in EBITDA to $4.1 million for FY25 Q2, even as revenue fell 10% due to operational disruptions at Anglo American’s Grosvenor mine. The company secured key contract extensions and maintained a strong cash position, positioning itself for growth amid sector uncertainties.
- FY25 Q2 EBITDA increased 14% to $4.1 million despite 10% revenue decline
- Revenue impacted by reduced manning at Anglo American’s Grosvenor mine after June 2024 fire
- Contracts with Anglo American extended to April 2025; discussions underway for further extensions
- New $15 million ventilation contract secured at Peabody Energy’s Centurion Mine
- Net cash position strengthened to $31.9 million with positive operating cashflows for four consecutive quarters
Operational Resilience Amid Disruption
Mastermyne Group Limited (ASX: MYE), a specialist in underground mining services, has demonstrated notable operational resilience in its FY25 second quarter results. Despite a 10% decline in revenue to $56.2 million, primarily driven by reduced manning levels at Anglo American’s Grosvenor mine following an underground fire in June 2024, the company managed to increase its EBITDA by 14% to $4.1 million. This improvement reflects a strategic shift in revenue mix and operational focus that has bolstered profitability despite top-line pressures.
Contract Extensions and New Opportunities
Mastermyne successfully navigated the challenging aftermath of the Grosvenor incident, securing extensions on its contracts covering the Grosvenor, Moranbah North, and Aquila mines through to April 2025. With Anglo American’s Steel Making Coal business sale to Peabody Energy expected to close mid-2025, Mastermyne is actively engaging to retain and potentially expand its footprint under new ownership. Additionally, the company has locked in a $15 million, three-year contract for ventilation control device installations at Peabody’s Centurion Mine, alongside a 12-month extension for longwall services at Whitehaven’s Narrabri Mine valued at approximately $15 million annually.
Financial Strength and Cash Flow Stability
Mastermyne’s financial position remains robust, with net cash increasing to $31.9 million from $25.8 million in the prior quarter. The company reported positive net cash flow from operating activities of $6.7 million, marking the fourth consecutive quarter of positive cash generation. This cash strength is supported by undrawn working capital facilities totaling $30.5 million, providing ample liquidity to support ongoing operations and growth initiatives.
Innovation and Market Positioning
Beyond contract wins, Mastermyne’s digital innovation arm, MyneSight, delivered a fully digital training department solution for Coronado’s Mammoth mine, streamlining competency tracking and compliance workflows. This project underscores the company’s commitment to leveraging technology to enhance operational efficiency and client value. Meanwhile, demand remains strong across its NSW operations, particularly in ventilation and strata support services, further diversifying its revenue streams.
Looking Ahead
With a growing pipeline of near-term contract opportunities and ongoing discussions with key clients, Mastermyne is well-positioned to capitalize on market recovery and transition phases within the coal mining sector. The company’s ability to maintain operational stability and financial discipline amid sector headwinds will be critical as it navigates the transition of Anglo American’s assets to Peabody Energy and pursues growth beyond FY25 Q3.
Bottom Line?
Mastermyne’s strategic contract extensions and cash flow discipline set the stage for navigating sector transitions and potential growth under new ownership.
Questions in the middle?
- Will Mastermyne secure further contract extensions with Peabody Energy post-acquisition?
- How will the Grosvenor mine fire’s operational impact evolve in the coming quarters?
- What new contract opportunities could materially shift Mastermyne’s revenue mix?