Boom Logistics hit by downturn

Crane hire company Boom Logistics is relying on staff cuts and surplus asset sales to pay down debt amidst challenging market conditions, the company said today.

Declining commodity prices have led mining and resources customers to apply price pressure, and demand is volatile, the company said.

Glencore, which has closed more than a dozen mines for three weeks during the Christmas break, was one of many that indicated lower activity in coming months, the company said.

Boom predicted trading profitability for the first half of this financial year to be similar to the six months to June 30, which was well down.

The company said it had sold 51 surplus cranes in the most recent financial year, and so far this year, had reduced staff numbers by around 120.

It also said it was on target to achieve $15 million of surplus asset sales.

Net debt was down to around $80 million, reduced by nearly $9.5 million since June 30.

In July, the company announced it had taken a $70.8 million goodwill impairment, with an impairment of fixed assets in WA of around $5 million.

At the time, the company said there had been a scarcity of cranes at the time of purchase prior to the global financial crisis, and that their arrival at a time when the dollar was falling compounded an over-valuation.

Boom was unchanged at 14 cents per share at the time of writing.