The Irish engineering tools corporation, Mincon, has recently seen signs of improvement in their business operations. This includes a recovery in construction revenues and successful initiatives to increase efficiency across the company, after a challenging period. In the first half of 2024, the firm’s revenue dropped by 16% to €16.8 million, as revealed in half-yearly financial results shared in August. The group’s operating profit also saw a decrease of nearly 70% to a mere €249,000, due to a 29% reduction in business in the Americas and a 17% fall of construction revenues in the Europe and Middle East region.
Mincon, a manufacturer and maintainer of rock-drilling tools serving the mining industry, issued a trading update on Friday for the period running from 1st January to end of September. They shared a message of positivity, indicating a resurgence in its function during the third quarter. The Dublin-based firm elaborated that the revival of its revenues and demand, already noticed at the end of the first half, had become more evident during the third quarter. The noticeable boost was primarily due to a rise in its North American construction revenue.
Although the firm acknowledged that growth in the construction and water well market in Europe, Middle East, and Africa has been somewhat slow to take off, they also mentioned earning their first two large construction contracts in the Asia-Pacific region. They ensured that their mining revenue remains steady, sustaining their confidence in both earnings and revenue expansion for the second half of 2024.
Mincon is currently nearing completion of the closure of their carbide factory in Sheffield and has arranged for external supplies to cater to their bit plants on improved cost conditions. Furthermore, they have made substantial progress in scaling down their inventory holdings over the past quarter.
Davy, in their note, stated that projections for the group are stable and they don’t foresee any alterations to the forecasts. They added that in the third quarter, Mincon successfully pursued several internal initiatives, including decreasing their inventory even further following satisfactory performance since mid-2023. The soon-to-be-closed Sheffield facility has established improved cost terms for the replacement of raw material supply through outsourcing.
Moreover, significant advances have been made in key product development ventures thus far this half. Davy suggested the shares of the company could be a worthwhile investment, assuming the company has moved beyond its earnings low point earlier this year. They maintained their price target at 73c, indicating a potential increase of more than 60 per cent from the current level, they further noted.