New presentation out, not a bad read and the sp likes it also:))
Entered FY10 with strong product and technology order book -$38m China sales to date for FY10 • Manufacturing capability expanded to meet growing export demand for diesel equipment • Acceptance of leading technology solutions leading to increased demand in China, South America,South Africa and India • New product support centres in China and Chile will drive recurring revenue from after sales serviceand support • Mining services well positioned to benefit from expected upturn in mining activity and increased clientproduction targets –New contracts with Mt Thorley Warkworthand Cockatoo Coal • Expecting improved profitability in FY10 based on current view of opportunities
Mining Services • Organic growth • Geographic, commodity and customer diversification • Disciplined fleet management and maintenance • Building on areas of strength (Bowen Basin –Hunter Valley) existing infrastructure • Top tier 2 –lower overhead provider Diesel, Technology, International • Buying high quality private companies to add capital, expertise and international sales channel • Export emphasis • Bolt on acquisition growth • Continued IP development and development of export channel • Strengthening of service, spare and support offering • Recurring revenue increasing via product support centre, OEM offering
Top coal market -and still expanding • World’s top coal market with record 2.8 billion tonnesproduction in 2008 (43% of global production); annual average growth rate of production 9% from 1949-2008 • Chinese Premier WenJiabaourges increased construction of large-scale mines with modern equipment to boost competitiveness; coalmine safety top priority of Government and coal companies • 469 large-sized coalmines with annual capacity over 1.2 million tonnes(51% of total); 36 coal enterprises with annual output over 10 Mt, as of end of 2008 • At end of June 2009, 17,947 coalmines with 15,235 classified as small Coalmine safety improving • Central Government providing RMB 3 billion a year for coalmine safety • Coalminers allowed to collect safety fee from sales before tax (eg. Shanxi Province RMB 40 per tonne) • Coalmine methane drainage key to improving safety in gassy mines, but only 30% of gas drained used in 2008 • Mine closures continue: 473 small mines shut in 1st half of 2009; 300 Mt production capacity eliminated from 2005-08 with 12,209 small mines closed • Worker safety improving, with fatality rate per million tonneof coal falling from 3.08 in 2004 to 1.182 in 2008 (down 62%)
IDL Price at posting:
49.0¢ Sentiment: LT Buy Disclosure: Held
