Insights

Here’s why the NRW (ASX:NWH) share price is rocketing 13% today

The company announced it’s selling its mobile mining assets.
The post Here’s why the NRW (ASX:NWH) share price is rocketing 13% today appeared first on The Motley Fool Australia. –

The NRW Holdings Limited (ASX: NWH) share price is one of the ASX’s top performers today. This comes after the diversified service provider announced the sale of its mobile mining assets.

At the time of writing, NRW shares are up 13.27%, trading at $1.75.

What’s driving the NRW share price today?

Investors appear to welcome the company’s latest news, sending the NRW share price to a new monthly high.

In its release, NRW advised that Boggabri Coal Operations, part of the Idemitsu Group, will acquire the majority of the major mining equipment from Golding Contractors.

Established in 1942, Golding Contractors is a wholly-owned subsidiary of NRW focused on delivering civil infrastructure, urban and mining services. The company is headquartered in Queensland and operates on the east coast of Australia.

Boggabri Coal exercised an option to buy 38 major mobile mining assets under the maintenance services and hire agreement. The companies are targeting a completion date for the equipment transfer by the end of this month.

While the transaction is being processed, Golding Contractors will continue to perform maintenance services on site, operating the existing mobile mining assets along with 50 other pieces of major equipment.

NRW revealed that the taken-up option would reduce the group’s pre-tax earnings of around $1.8 million per year. The equipment will be sold for roughly $81 million, with $64 million used to pay down asset financing debt. Unaudited pro forma net debt stands at around $115 million and is projected to fall to $34 million after payment.

At the end of June 2021, NRW had approximately $145 million in cash with $260 million of debt.

What did the head of NRW say?

NRW CEO and managing director Jules Pemberton touched on the sales agreement, saying:

The option for Boggabri Coal Operations to acquire all or part of the associated mining fleet was identified at the time of the acquisition of BGC Contracting. This transaction will reduce debt and increase return on capital employed.

We look forward to continuing to support BCO to ensure we are best placed to continue to provide our services beyond the current contract completion date of December 2022.

The NRW share price is trading 6.67% higher than this time 12 months ago. But after climbing to a 52-week high of $3.19 in January, shares in the company changed direction and have fallen more than 40% in 2021 alone.

The post Here’s why the NRW (ASX:NWH) share price is rocketing 13% today appeared first on The Motley Fool Australia.

Should you invest $1,000 in NRW right now?

Before you consider NRW, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NRW wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Why Australian Pharma Industries, Audinate, NRW, & Vulcan are racing higher

The ASX shares most impacted by Australia’s job squeeze

Maca (ASX:MLD) share price sinks 6% on Karara Project update
Why the NRW (ASX:NWH) share price is edging higher today
Brokers name 3 ASX shares to buy now

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!