Swick Mining Drills Into Gold Boom

By Glenn Dyer | More Articles by Glenn Dyer

Shares in mining services group Swick Mining jumped nearly 4% as the company revealed a solid 2018-19 result and expectations of a repeat in the coming 2019-20 financial year.

The shares rose 5.8% to 27 cents after Swick revealed that unaudited earnings before interest, tax, depreciation, and amortisation (EBITDA) for the year to June rose 50% to $28.9 million.

Driving that improvement was the company’s drilling business where EBITDA jumped 300% to $9.9 million.

This sharp improvement came on just a 4% rise in revenue for the year to June to $143 million – at the top range of guidance for revenue growth for the year.

And driving that improvement has been the rise in the price of gold (in US and Australian dollars) so far in 2019.

Swick says rigs have been moved to better-performing contracts and 15 new underground diamond drill rigs getting to work in the six months to Christmas.

“We have a good mix of high-quality clients, wide commodities exposure led by gold and copper, and an international strategy that is yielding significant results with a third of our rigs now deployed outside Australia,” managing director Kent Swick said in yesterday’s statement.

“These factors, combined with our strong $353 million order book, ensure Swick is well placed to drive earnings growth and improve cash generation in FY20. The strong cash flow of $25.6 million (unaudited) also gives us confidence that we can resume generating strong shareholder returns,” he added.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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