Contracts in the gold sector are driving the performance of mining services group, Ausdrill.
The Perth-based contractor recorded a 53.3 per cent increase in net profit during the 2017 financial year, with its gold mining contracts providing the foundation for this improvement.
Around 80 per cent of Ausdrill’s mining services revenues were generated by providing services to gold mining companies in the past financial year, primarily for production-related activities, the company reported.
Growth in Ausrill’s African operations, as well as cost reductions and restructuring across the company, also aided the result.
Ausdrill managing director Ron Sayers said the company won $1.6 billion worth of new projects and contract renewals over the past 12 months.
“This includes four significant new jobs in Africa and the renewal of three key contracts in Australia,” Sayers said.
“Our project pipeline is exceptional and with our deep and long-standing relationships with the major mining companies operating in both Australia and Africa, Ausdrill is in a very strong position to continue to deliver growth in the years ahead, in what remains a challenging but stabilising market.”
Ausdrill is targeting 30-40 per cent profit growth in fiscal 2018, based on current work in hand and expected contract renewals.
“We have secured and are mobilising new projects which are expected to deliver significant revenue and profit growth during FY18 and beyond,” Sayers said.
He added that Ausdrill’s African business would continue to be a key driver in the company’s growth.