Ausdrill’s Stock Soars On ASX On The News Of Barminco Securing Service Contract For HZL Worth $100 Million

  • Feb 07, 2019 AEDT
  • Team Kalkine
Ausdrill’s Stock Soars On ASX On The News Of Barminco Securing Service Contract For HZL Worth $100 Million

Ausdrill Limited (ASX: ASL) is into mining services. The company is engaged in providing exploration & production drilling services to its clients. It operates across Australia, Africa, and the United Kingdom. The company has operations in four segments including Drilling Services Australia, Contract Mining Services Africa, Equipment Services & Supplies, and all Other. 

Today (7 February 2019), the company has announced that its recently acquired subsidiary Barminco, the leading hard-rock underground miner, has been awarded an underground mining services contract at the Rampura Agucha Mine in India from Hindustan Zinc Limited whose worth is around $100 million.

The Managing Director of the company, Mark Norwell, said that the continuation of services at Rampura Agucha is a further endorsement of the Barminco acquisition coupled with the professional service that Ausdrill has been providing to its customers.

The company has operated at the Rampura Agucha Mine for Hindustan Zinc Limited, which is a subsidiary of Vedanta Limited. The term of the new underground mining services contract is for a tenure of 3.5 years. However, the tenure is subject to review and mutual agreement of rates after the completion of the first year. The scope of work includes the extension of development works that were being provided under a recently completed contract, coupled with the addition of production work in the Barminco-developed area of the mine.

Hindustan Zinc Limited under the contract will provide capital equipment and consumables. And Barminco will start work immediately.

The Chief Executive Officer of Barminco, Paul Muller, said that the company is pleased to get the contract that will extend their operations at the Rampura Agucha mine. This will enhance the scope of the company to include production works. Barminco is looking forward to deepening the relationship with Hindustan Zinc that they have built over the past few years by delivering and executing the work safely and efficiently.

On the financial front, the company has reported sales revenue of $887.3 million in FY18, an increase of 16.4% approximately Y-O-Y with a reported EBITDA of $177.4 million in FY18, up by 30.6% from the previous corresponding period. Further, the EBITDA margin has also increased on the back of efficiencies and scale benefits.

Now let us quickly have a look at Ausdrill Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $1.507 and increased by almost 6.127% during the day’s trade, with a market capitalisation of $972.33 million. The stock opened at $1.440 with its day low of $1.430 and a day’s high price of $1.527. The stock has generated a YTD return of 25.66% and posted negative returns of 18.09%, 0.35% over the last six months and three months period respectively. It has a 52-week high price of $2.872 and a 52-week low of $1.042, with an average trading volume of 4.2 approximately. The stock is trading at a PE multiple of 8.160x with an EPS of $0.174.


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