Trusted Coal Mining Contractor, Mastermyne Group Steady Amid CV19, Reconfirms Guidance

  • Apr 27, 2020 AEST
  • Team Kalkine
Trusted Coal Mining Contractor, Mastermyne Group Steady Amid CV19, Reconfirms Guidance

Australia's resources industry has the unique trait of being both the nation's oldest export industry and its most modern one- a global technology leader expected to continue to be at the forefront of innovation. The metals and mining sector, a major contributor to the national economy, has underpinned the upsurge in incomes, living standards and prosperity over the years.

In this backdrop, we introduce one of Australian mining’s most trusted contractors, which believes that mining can be done better by being better- Mastermyne Group Limited (ASX:MYE).

Mastermyne Group- Stronger Values, Greater Results

Founded in 1996 by Andrew Watts and Darren Hamblin, MYE has long been one of Australian coal mining’s most trusted contractors, catering to Tier 1 mine operators and niche asset owners. Efficient diversification and strategic growth over the years have broadened the products and services offered by the Company, with its workforce and footprint continuing to grow.

Spanning the east coast of Australia, MYE has secured a market leading status in the country’s richest underground coal generating regions in New South Wales and Queensland.

Offerings  

The Company has long retained a reputation of consistently displaying its ability to deliver effectively. Its capabilities span mine operation, new mine development and entire mine support services. As an icing on the cake, the Registered Training Organisation ensures delivery of training and compliance solutions that aim at the twin goal of enhancing efficiency and reducing costs to mine operators.

Below are MYE’s key offerings-

Mastermyne Group Stance in COVID 19 Environment

The escalating coronavirus pandemic (CV19) has left many Australians with their wellbeing and livelihoods impacted. Undeniably, the repercussions of CV19 have been widespread with several sectors experiencing the detrimental impacts. However, a boon for MYE, the pandemic has not yet spewed dire effects on the resources sector to date.

The Company recently intimated that currently, there are no confirmed cases of CV19 on any of its projects. Proactively, protocols were put in place quite early in the pandemic and were successful in ensuring that the projects remained operating as normal. Offices and support functions have been reportedly unimpacted. MYE’s well established infrastructure and technology facilitated seamless transition, as the teams began working remotely.

The Company has been working closely with State and Federal Authorities and the Queensland Resources Council that have guided MYE around the management of the movement of workforce in the current unprecedented times.

Minor disruption was experienced where workers relied on commercial flights to access their place of work, but relocation closer to the projects in temporary accommodation resolved the issue.

Solid Operations and Guidance Update amid CV19 Pandemic

Amid the ongoing CV19 crisis, MYE bagged a notice of award from one of its Queensland clients for the installation of conveyors. The commencement of mobilisation remains subject to agreement of contract terms and the expected completion date is around July 2021.

Besides this, MYE added another feather in its cap with the conclusion of a contract renewal for the existing Ventilation Support Services Contract to Glencore at its Integra Operation for a period of 2 years (plus 2 x 1 year options).

Continuing on the operations front, MYE has been issued a variation to the contract for South32, at the Appin Mine project, pertaining to reduction of overall manning numbers by ~100 people with ~100 remaining on the project. As the contract’s completion date is June 2020, MYE is currently unable to advise if it will be extended past this date.

Even though the Appin Mine contract was exposed to changes, MYE has maintained the FY20 guidance at the lower end of revenue between $295 million and $315 million. The EBITDA is likely to range between $27 million and $31 million.

MYE’s strong order book of close to $700 million is catalysed by the conveyor installation notice of award and the recent contract renewal at the Integra Operation. Further, moving into FY21, the Company continues to focus on a healthy pipeline of near-term opportunities.

Stock Performance

MYE settled the day in green at $ 0.700 on 27 April 2020, advancing further by 1.44% from its previous closing price. The stock has a dividend yield of 5.8% and a P/E ratio of 6.1x. In the past one month, the stock has delivered returns of 38%. 

Backed by world-class assets, long-term relationships, strong increase in workforce numbers, and record high levels of order book and pipeline while maintaining focus on a safety culture as the Company expands the business with a solid stance amid the pandemic, Mastermyne Group seems to be on the right growth trajectory.     

 


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