Ausdrill FY10 profits up 16%

Ausdrill has recorded a 16 per cent jump in profits to $48.2 million for the 2010 financial year.

Ausdrill increased its revenue last financial to $633 million up from $509 million in 2009.

The drilling contractor will pay a final fully franked dividend of 6 cents per share in October.

In its preliminary final report Ausdrill said its Australian operations had performed strongly despite a noticeable decline in junior companies requesting quotes for drilling programs.

The company's board believes that Ausdrill will see a significantly improved result in the 2011 financial year.

However, it said the proposed resources tax, if introduced, will undoubtedly have a negative effect on new projects in the resources industry in Australia.

See full company statement below:

Ausdrill Limited is pleased to report after tax profit for the year ended 30 June 2010 of $48.3m.

Key financial benchmarks are as follows:
- Revenue from continuing operations is up 24% from $509.0m to $632.9m
- EBITDA is up 21% from $126.2m to $152.3m
- Profit before tax is up 12% from $57.7m to $64.7m
- Net profit after tax is up 16% from $40.2m to $48.2m
- Earnings per share is up from 23.23 cents to 23.71 cents
- Final dividend of 6.0 cents per share (fully franked) payable on 29 October 2010, making total dividend of 11 cents

The financial position of the company remains robust with shareholders equity growing by $195.4m to $501.5m, net tangible assets per share of $1.78, cash holdings of $144.0m and net debt to equity of 19.6%.

AUSTRALIA
The Australian operations have performed strongly. During the year, new work for the drill and blast division has included a 5 year contract with Navigator Resources at Bronzewing and contracts for Gorgon site preparation work and in-pit grade control for OZ Minerals at Prominent Hill.

The exploration drilling business had an excellent year. Whilst there was a noticeable downturn in junior companies requesting quotes for drilling programs, our emphasis on blue chip clients meant that our fleet has been very busy. Significantly, revenue and margins have both improved.

The mining services division provides fully maintained earthmoving equipment to the mining industry. The recent purchase of 17 CAT 793 trucks has taken our fleet to 80 units. This division's business is focused on the Pilbara. We expect the mining services division to expand with the provision of mining service contracts.

Drilling Tools Australia has experienced continued growth. Sales to external parties were 49.4% of total revenue for the year. The division's external customer base includes Newmont, Newcrest, Mt Gibson Iron and Xstrata.

The expansion of the Remet Engineers' manufacturing facilities at Canning Vale is proceeding and, when completed, should place this division in a position to expand sales significantly.

AFRICA
African Mining Services has developed into a major player in the African contract mining scene.

A significant development has been the 5 year extension of our contract with Red Back Mining Inc at their Chirano Gold Mine, where we have operated since 2004. This year we announced a 5 year extension to this contract.

AMS has signed a MOU with Yatela to extend our mining contract to April 2013. The drill and blast contract with AngloGold at Geita is operating very successfully.

There are significant mining projects in the pipeline in Africa. These present great opportunities for AMS as a major mining contractor in the region.

OUTLOOK
At the moment, the company sees major opportunities for new work both here and in Africa.

Major mining projects are projected for a number of countries in Africa. Many Australian and international companies are now involved in exploration and mining in Africa and we expect the activity to increase exponentially, particularly in the gold sector.
Subject to no unexpected events, the Board believes that the Company will see a significantly improved result in the 2011 financial year. The proposed resources tax, if introduced, will undoubtedly have a negative effect on new projects in the resources industry in Australia.

Fortunately, with the growth of the mining industry in Africa, Ausdrill is well positioned to minimise the effect of any downturn in Australia.