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NRW Holdings Limited (ASX:NWH) arrows up after the company unveils the five-year contract extension with Stanmore Coal for mining at Isaac Plains East.
In todayâs market announcement, NRW Holdings told that its wholly owned subsidiary Golding Contractors Pty Ltd has secured $500million extended mining services contract with Stanmore Coal for its Queenslandâs based Isaac Plains East project.
With this award, the Goldingâs existing contract for mining services at Isaac Plains East has been extended for the term of five-years to June 2024. This translates commencement of contract extension from 1 July 2019, said Stanmore.
NRW CEO and Managing Director Jules Pemberton stated that the award of five-year contract extension at Isaac Plains underscores the strong work relationship between Golding and Stanmore Coal that began in 2015.
In a separate market release, Stanmore informed that the agreement involves flexible contract structure by which Stanmore can scale up and down production through a cost-effective structure to meet the market conditions. It also allows Stanmore to exercise option to owner, if required, or operate the Coal Handling Preparation Plants (CHPP) as the future production scenario changes.
Stanmore intends to jointly evaluate future synergies with Golding to transition to alongside open cut mining areas. However, it also has the right to alter the terms of the contract to match future development opportunities as approvals are obtained, such as Isaac Downs.
Stanmore Coal Limited is an ASX listed coal mining company. The company operates coking coal mine in Bowen Basin region of Queensland, called Isaac Plains Mine. It is located within the companyâs 100% owned Isaac Plains Complex, adjoining Isaac Plains East which became operational in in July 2018.
Recently, NRW Holdings announced the wining of Early Contractor Involvement (ECI) with Fitzroy Australia Resources. As per the announcement dated 13 November 2018, NRWâs Golding has been awarded ECI contract to undertake design, costing and project scheduling for the civil and mining services for Fitzroyâs Ironbark No. 1 Coal Mine. The construction is anticipated to commence in second quarter of 2019.
It comes in line with already completed 12 months Broadlea mining project for Fitzroy which was commenced in September 2017 by Golding and was completed in October 2018.
On financial performance front, NRW Holding delivered a revenue of $754 million for the year ended 30 June 2018, which is double that of the previous corresponding period. The bottom line of the company has shown an improvement of 48%, that presents the net profit after tax of $42.2 million in FY18. The Board declared the first dividend since October 2014 of 2 cents per share, fully franked, paid on 6 November 2018.
With this update, NRWâs shares edged up by 1.7% or $0.030 to trade at $1.795 on 16 November 2018 (1:01 PM AEST). Moreover, the stock is currently trading at a PE of 15.220 x with market capitalization of $655.76 million. Over the past one year, the stock has witnessed a positive performance change of 36.29%.
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