Page 12 - Bradken Annual Report 2013_Page flip

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The Global Lost Time Injury Frequency Rate
(LTIFR) for 2013 of 5.3 was an increase on the
previous year due to deterioration in performance
in the USA which is being actively addressed by
Management. 26 sites were Lost Time Injury (LTI)
free, which is an increase of seven on the prior
year’s safety result. Global strategic planning for
Human Resources and Occupational Health &
Safety is now being undertaken separately to bring
an increased focus on each.
We continue to nurture University and College
alliances that are aligned to our business needs
and to develop our metallurgical capabilities
globally. Taking responsibility for our needs we
continue to work with and foster relationships
between Wollongong University and Skilltech
TAFE in Queensland to deliver our second foundry
practices course. We currently have 23 metallurgy
undergraduates spread across Australia, USA and
China. This complements other undergraduate
sponsorship in the fields of mechanical engineering,
accounting and human resources.
Our undergraduate programs are a core component
of our succession planning efforts and continue to
provide us with a pipeline of talent for the future.
Bradken’s business strategies remain unchanged,
with our focus on key strengths in the design,
manufacture and supply of consumable products
to the mining, energy and rail industries.
We expect mine production to show steady
increases again in 2014 for most commodities and
the energy segment to remain strong for oil and
gas products.
Miners will continue to restrict expenditure to
improve cash flow due to weaker prices and high
cost pressures which largely affect new equipment
purchases and discretionary consumables, but
we expect non-discretionary consumable sales to
track production.
Ultimately, new capital equipment will be required
by miners and while some orders are returning,
there is little visibility of a trend.
Bradken has significant low cost capacity in
Xuzhou and the capability to respond to returning
market demand and is being assisted by the lower
Australian dollar. Capex will be restricted to mostly
stay-in-business at around $40 million.
Bradken continues to reduce both operating
and overhead costs in line with the lower activity
levels and to reduce working capital and capital
expenditure to maximise cash flow and maintain
gearing close to current levels.
The first half of 2014 will be challenging for the
Company, but overall we expect the year to be
broadly comparable with last year’s results.
Management will continue to pursue opportunities
to grow the existing business both organically and
through acquisitions at the appropriate time, all
the while maintaining a solid balance sheet and
strategic focus consistent with Bradken’s global
business strategies.
Our Management Team and I would like to thank
our shareholders for their confidence in the
Company as we look forward to the challenges of
the year ahead.
Brian Hodges
Managing Director & Chief Executive Officer
Participants at the Skilltech training course with General
Manager – Human Resources, Wayne Herbertson.