Shares in Emeco Holdings have soared after the mining equipment supplier tipped an almost 40 per cent increase in earnings.

Emeco today said in an update that it expected operating earnings before interest, tax, depreciation and amortisation for fiscal 2019 of US$146 ($211) million to US$148 ($213) million.

The Osborne Park-based contractor reported positive market conditions and said the outlook remained strong for fiscal 2020.

It said recent equipment purchases were expected to come in below a budgeted $90 million and were on target to generate US$17 ($25) million earnings before interest, tax, depreciation and amortization in FY20.

The spending when flagged in February smashed Emeco’s share price because of investor fears about the unexpected fleet expansion.

Emeco today said movement of materials was continuing to increase and equipment supply remained tight.

It added that thermal coal now contributed less than 25 per cent of Emeco’s revenue, adding that its thermal coal customers were tier one exporters.

Image: Emeco Managing Director and Chief Executive Officer Ian Testrow. Picture: The West Australian.