Metarock quits Crinum as profit outlook dives in $70m blow
Metarock has walked away from its mining contract at the Gregory Crinum mine and revised down its revenue guidance by $70 million.
The company also announced its longtime managing director Tony Caruso would leave the company to be replaced by chief executive Paul Green.
The normalised EBITDA for the company was revised down to between $34 million and $40 million, down from guidance given by the company in August of between $50 million and $55 million.
Its contract book has been reduced to a āvery strongā $1.3 billion from $1.9 billion.
The company said that since the roof collapse incident at the Gregory Crinum mine last year, the contract with Sojitz āhad been significantly delayedā.
Metarock was able to cancel the contract because it had been unable to access the mine for a continuous period of more than 180 days.
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āThe termination of the Gregory Crinum contract will materially reduce the risk profile of the companyās coal operations,ā Metarock told investors.
Metarock recently shifted its strategy from coal to the broader mining sector including hard rock mining.
āWhile the foundation businesses continue to perform strongly, delays at Crinum mine and poor results from Pybar Mining Services business have led to an underperformance of the company,ā the company said.
āAs a result, the board has repositioned Metarockās strategy aimed at restoring profitability and reducing gearing to target levels.ā
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It said the tightness of the labour market was also impacting the ramp-up of new projects and the revised guidance was a reflection of this.
The company would sell off surplus equipment while the coal market was strong which it said would reduce gearing levels.
Carusoās departure coincided with the shift in strategy towards consolidation.
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