Ausdrill reports $43.9m loss

Mining services company Ausdrill has suffered a 148.5 per cent fall in full-year profit to make a loss of $43.9 million, on the back of $77.9 million in write-downs and impairment charges as a result of the diminished outlook for mining services.

Ausdrill’s revenue fell 26.8 per cent to $826.3 million for the year, and it declared a fully franked final dividend of 2 cents per share, bringing the total dividend for the financial year to 4.5 cents per share.

Last year, the company declared and paid total dividends of 12 cents per share.

“There is no hiding from the fact that this has been a tough year for the company, and indeed for the entire industry,” Ausdrill managing director Ron Sayers said.

“The slowdown in mining industry activity in both Australia and Africa that we have witnessed for the past two years has continued.”

Despite the slowdown, he said there were positive signs that the company was in a good stance to overcome the market pressures.

“We believe the investment we have made in developing our people, acquiring equipment and growing the business places us in the best possible position to benefit from the turnaround when it arrives,” Mr Sayers said.

Ausdrill said mining companies cutting back on non-essential spending, including capital works and exploration programs, was a major cause of a reduction in activities across all segments of its business.

However, it said its long-term contracts in place with major clients have assisted in minimising the impact of the mining sector slowdown.

Ausdrill had a gearing ratio of 34.8 per cent and $62.7 million in cash.

The company said its Energy Drilling Australia and African Mining Services businesses were expected to assist in lifting its guidance for the next financial year.

“The anticipated improvements in these businesses are based on contracts which are now in place and an expected increase in demand for these services,” Ausdrill said in a statement.

In February, Ausdrill was awarded $US300 million worth of new contracts through its Aftican mining subsidiaries, including a $US147 million five-year extension to its open pit mining contract at Endeavour Mining’s Nzema gold mine in Ghana.

It was also awarded a $US135 million, three-year deal to provide mining services to AngloGold Ashanti at its Siguiri gold mine in Guinea, and a 12-month, $US18 million contract at AngloGold’s Iduapriem mine in Ghana.

Ausdrill’s share price rose by 14.4 per cent to $1.31 per share at 10:30am.