Emeco’s Operating NPAT Climbs 22%, EBITDA Margin Hits 38% in FY25

Robust Financial Performance

Emeco Holdings Limited has delivered a solid financial performance for FY25, marked by a 7% increase in revenue excluding underground contract mining and a striking 22% rise in operating net profit after tax (NPAT) to $84.5 million. The company’s operating earnings before interest, tax, depreciation, and amortisation (EBITDA) margin improved significantly from 34% to 38%, reflecting disciplined cost management and enhanced contract terms.

Cash flow generation was another highlight, with operating free cash flow rising 32% to $114 million and a strong cash conversion rate of 97%. This robust cash flow supported a reduction in net leverage from 1.0x to 0.65x, strengthening Emeco’s balance sheet ahead of upcoming refinancing obligations.

Operational Strength and Contract Wins

Operationally, Emeco maintained high fleet utilisation rates, with surface rental averaging 85% and underground rental at 57%, supported by major contract extensions with long-term customers. The company’s focus on overhead and cost management, alongside investments in digitisation and business intelligence tools, has enhanced its site maintenance capabilities, further differentiating its service offering.

Emeco’s simplified business model now centers on equipment rental and maintenance and rebuild services, positioning it to capture market share by expanding fully maintained projects from a strong pipeline of opportunities. The underground rental business is now fully integrated with surface operations, streamlining service delivery.

Strategic Focus and Technology Investment

Looking ahead, Emeco is targeting a 20% return on capital (ROC), with FY25 already showing a 170 basis points improvement to 17%, and a strong second half run-rate of 18%. The company plans to continue disciplined capital expenditure, focusing on sustaining capex of around $170–175 million in FY26, with no growth capex planned.

Technology remains a cornerstone of Emeco’s strategy. The company is advancing its enterprise digitisation and operational technology enablement, integrating machine telemetry and predictive maintenance to improve fleet performance and customer outcomes. The ongoing ERP implementation and digitisation initiatives are expected to further enhance operational efficiency.

Sustainability and ESG Commitments

Emeco continues to evolve its Environmental, Social, and Governance (ESG) strategy, with a focus on climate change reporting aligned with upcoming regulatory requirements. The company has published its Climate Change Position Statement and is developing methodologies for Scope 3 emissions reporting. Safety remains paramount, with ongoing initiatives to reduce injury rates and enhance workforce training.

FY26 Outlook

For FY26, Emeco expects moderate earnings growth, significant free cash flow generation, and further deleveraging. The company will prioritize business development to increase fleet utilisation, maintain cost efficiencies, and expand its fully maintained project offerings. Refinancing of debt facilities is planned in the first half of FY26, supported by strong liquidity of approximately $220 million.

With a diversified customer base across commodities and geographies, a strong balance sheet, and a clear strategic roadmap, Emeco is well positioned to navigate the mining equipment rental market’s evolving demands.