Ausdrill warns of market weakness

Mining services group Ausdrill has warned shareholders it is battling weaker than expected market conditions, entering a trading halt as it prepares to release an update on its outlook for the 2014 financial year.

Ausdrill said it was reviewing its current operating performance and would resume trading no later than Thursday.

It comes in the wake of fellow contractor Forge Group yesterday halting its shares from trading as it too prepares to update the market on its financial outlook.

Ausdrill told shareholders earlier this year that it would review its cost structures in the wake of a 20 per cent fall in annual net profit, driven by slowing conditions in Australia and Africa.

It recorded a 6.6 per cent increase in sales revenue to more than $1.1 billion, driven largely by the first-time contribution of the Best Tractor Parts Group, which it bought in August last year for $165 million.

At the time the company said it expected the production phase of the mining cycle to provide a solid base for the business in 2013.

Ausdrill had warned earlier in the year that its net profit after tax would be lower in light of a slowdown in exploration and equipment hire.

Ausdrill shares last traded at $1.37.