The Austin Engineering (ASX: ANG) share price will be on watch this morning after the company announced it has received strong order flow.
The post Here’s why the Austin (ASX:ANG) share price is on watch today appeared first on The Motley Fool Australia. –
The Austin Engineering Ltd (ASX: ANG) share price will be on watch this morning. This comes after the company announced after yesterday’s market close it has received a number of new orders for its products.
The Austin share price finished Monday’s trading session at 17.5 cents. It will be interesting to see how the company’s shares perform today as investors digest this latest news.
Strong orders received
Austin Engineering, a global mining equipment designer and manufacturer, reported last night it has received new customer orders for more than 100 of its products. These include truck bodies, water tanks and buckets for large mining companies.
The recent order flow is estimated to comprise more than $35 million in revenue for the company. Furthermore, the recent purchases will support Austin’s previous earnings guidance of underlying net profit after tax of above $9 million.
The company’s order book now accounts for over 70% of expected revenues, which is on par with the same time last year.
Management said that while the Asia-Pacific region continues to outperform expectations, its North and South American segments are lagging behind.
In the United States market, the intensifying COVID-19 situation, and continued federal election noise are negatively impacting Austin’s order flow. Consumer confidence appears to have stunted as businesses refrain from capital expenditure.
Looking ahead however, Austin is forecasting an improvement post January 2021 with annual budgets usually reset for the new year. Currently, the company has already quoted several works in the region, with final customer commitments anticipated in the third quarter of FY21.
Similar to its northern neighbour, South America has seen business activity falter amid COVID-19 restrictions. Tender contracts for long-term supply of equipment, repair and maintenance have become delayed in Chile. Austin advised it is well positioned to weather the storm and sees a number of opportunities in the post-pandemic world.
What did management say?
Commenting on the company’s performance, Austin managing director Mr Peter Forsyth said:
The Asia-Pacific region is performing exceptionally well at the moment with a strong line of sight to keeping our two large facilities in Perth and Indonesia close to capacity.
Offsetting this strength, the Americas are currently facing challenging operating environments, and this is a product of the broader economies in those regions. I am heartened by the scale of opportunities in the US, Canada and Chile and we remain confident that the tide will begin to turn early in the New Year in these regions.
Austin share price summary
The Austin share price has had a bumpy road over the past 12 months. Its shares reached a high of 23 cents in January, before falling as low as 10.5 cents in March.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.