Hi all, There hasn't been a lot of discussion on Austin recently and the SP hasn't seen the same rises as other mining service companies. With a flat result delivered in FY13 against tough 2H market conditions, and management aiming for a flat year again in FY14, it would be good to get some discussion going about ANGs prospects going forward.
My take is: - Australian growth will be better than expected, as the wear on equipment with the current ramping up of volumes extracted will be higher than FY 13, if not the years before that too. - South America may be more of a challenge than previously anticipated. The results here were a little underwhelming, and seeing significant profitability in this region could be some years away. A good short term catalyst will be if they manage to secure the Brazilian Vale contract. Winning this would make for a much better picture of the South American operations, and is probably the only trigger for a significant SP lift in the near term. - As ANG managed to weather the storm better than a number of other mining service companies, there is better short term value elsewhere in the sector for value investors willing to take on a bit of risk. - Long term, ANG is a stable proposition that is in a good position to resume quality earnings growth once the outlook for the mining sector improves.
ANG Price at posting:
$3.64 Sentiment: LT Buy Disclosure: Held
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