Service providers also struggling - Deloitte
PERTH (miningweekly.com) – Australian miners were not the only ones suffering in the current economic climate - services providers are also facing cost and market pressures, advisory firm Deloitte has reported.
In its new Mining Services Index, published on Wednesday, Deloitte pointed out that during the three months to March, nearly half of the indexed mining services sector reported profitability below guidance or market expectations, with the market capitalisation of these companies dropping nearly A$940-million.
“Many participants who reported earnings above expectations either benefitted from a diversified contract portfolio, including projects outside the resources sector, or they service niche subsectors,” said Deloitte financial advisory services partner Nicholas Harwood.
“Cost agility has become a key to preserving growth, as the competitive tendering environment continues to depress margins and increase project lead times despite a solid pipeline of opportunities.
“A number of corporate failures in the sector may also lead to financiers reviewing the structure of performance guarantee facilities. Cash-backed guarantees may emerge and create working capital pressures.”
Deloitte Access Economics partner Stephen Smith said a range of macroeconomic factors were also disrupting Australia’s miners and, by extension, the mining services sector.
“Prices and export volumes for both iron-ore and coking coal are certainly an issue, as is the well documented infrastructure construction cliff,” he said.
The data revealed in the latest index mirrored Deloitte’s previous research, which suggested that mining investment had softened during the three months to March, with investment likely to drop further in 2014/15.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
As one of South Africa's leading manufacturers, Bell Equipment distributes and exports its wide range of heavy equipment globally to mining,...
VISIT SHOWROOM
From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
