NRW Offers $12 Million Loan Facility To GNT Resources

  • Dec 24, 2018 AEDT
  • Team Kalkine
NRW Offers $12 Million Loan Facility To GNT Resources

NRW Holdings Limited (ASX: NWH) today announced the provision of the loan facility to the subsidiary of ASX listed miner Gascoyne Resources.

In an announcement to Australian Securities Exchange, the civil and mining contractor NRW Holdings agreed to provide a $12 million loan facility with an extended payment term of approximately 75 days. The loan is provided to GNT Resources Pty Ltd (GNT), a subsidiary of Gascoyne Resources about the mining contract which was awarded on 13 December 2017.

However, the loan facility along with the mining contract which is for the open pit mining and drill and blast operations is secured over the assets of GNT.

GNT Resources Pty Ltd intends to utilize this loan facility towards its working capital requirement. The borrower has further agreed to repay the loan facility in the form of installments during the second half of 2019. Moreover, NRW has already worked with Gascoyne Resources on the Dalgaranga project to support operational priorities.

Recently, the contractor provided updated guidance for the six months ending 31 December 2018. As per the updated guidance, the company expects its half year’s revenue to jump by 45% to $500 million when compared to the previous corresponding period.

NRW CEO and Managing Director Jules Pemberton stated that despite facing headwinds from Queensland project ahead of some adverse weather conditions, the company remains on track to deliver full-year revenue in line with its guidance of $1.1 billion.

Moreover, EBITDA is expected to reach $70 million, up from $40.3 million in the corresponding prior period. For the reporting period, i.e., half months to 31 December 2018, the company forecast earnings to be approximately $45 million almost double the same period last year.

This positive outlook underpins the acquisition of contractor Golding Group which was undertaken last year in  September. Golding is expected to bring several new contracts especially the mining and infrastructure projects in the East Coast.

For the year ended 30 June 2018, NRW posted 48% growth in bottom line driven by the top line growth of almost 100% to $754.3 million. Its order book reached the record level of $2.2 billion as at July 2018 with new work secured across the group for approximately $1.7 billion.

On NRW’s decision to provide $12 million loan facility to GNT Resources, the investors pressed the sell button on ASX today. At the time of writing, 24 December 2018 (1:00 PM AEST), NRW’s stock price has fallen 1.608% to stand at $1.530. The stock is trading at a Price to Earnings ratio of 13.410 x with a market capitalization of $584.51 million.

However, looking at the historical performance of the company, we can see a decent growth of 7.24% over the past six months and 0.97% over the past 12 months.


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