Hastings loses cash but ‘18 looks good
HASTINGS Deering, which supplies heavy earthmoving equipment such as Caterpillar bulldozers, suffered a $100 million revenue fall last year in the tail of the mining slump.
The drop from $1.666 billion to $1.547 billion revenue in fiscal 2017 represented a 7 per cent tumble for Brisbane-based Hastings.
But the company, ultimately owned by Malaysian Government-backed Yayasan Pelaburan Bumiputra, is forecasting cashflow growth “based on a prediction that a strong rebound of capital investment will occur in the resources sector”.
“In contrast with the poor economic conditions since 2012, management predict significant growth in earnings,” Hastings’ accounts said.
That matches improved sentiment elsewhere in the sector.
The accounts for Hastings, which also offers massive mining trucks and rotary drills, have just been filed with Australia’s regulators.
Hastings would not make anyone available for interview but recently said they were looking to hire more people based on a resources-sector revival.
The company officially posted a loss of $68.9 million, against a loss of $16 million from a year earlier.
Yet that result is muddied by accounting gains of distribution rights and impairment hits, along with many relatedparty deals including loans and management fees.
It listed receiving a tax benefit of $5.3 million in the year, but Hastings’ taxes are consolidated as part of another parent group called Sime Darby Industrial Australia.
Operating cashflows for Hastings were in the red to the tune of $112 million.
The biggest revenue drop came from the sector supplying equipment, down from $495 million to $367 million, while the division providing parts actually rose from $640 million to $655 million.
The costs of raw materials dropped almost 10 per cent to $1.19 billion, yet Hasting Deering’s employee costs rose 2.4 per cent to $251 million.
Other players in the mining services sector have seen some recent gains. Mackaybased Mastermyne, which helps build facilities such as underground roads, in November upgraded 2018 revenue expectations of between $160 million and $180 million to between $180 million and $200 million.
Raw earnings (before interest, tax, depreciation and amortisation) should land between $13 million and $16 million in 2018, higher than earlier expectations of $10 million to $12 million, Mastermyne said.