Henderson-based drill and blast company Brandrill Ltd anticipates a 10 per cent fall in its before tax end-of-year profit, after activity levels for the first four months of the calendar year fell below original expectations.
Henderson-based drill and blast company Brandrill Ltd anticipates a 10 per cent fall in its before tax end-of-year profit, after activity levels for the first four months of the calendar year fell below original expectations.
The company said in a statement that its activities were impacted by cyclonic activity in Western Australia and Queensland, as well as delays of new mine developments in WA and bottlenecks in coal transport infrastructure in Queensland and New South Wales.
The predicted 10 per cent fall would put the company's profits at or above $9 million, up $1 million from the previous financial year, and representing a recovery from its time in receivership in 2004-2005.
The full text of a company announcement is pasted below
Brandrill announces that although the financial results for April are not yet available, activity levels for the first four months have been below original expectations and it is now apparent this is unlikely to be recovered in the remaining two months of this half year.
Activities and rig utilisation were impacted by cyclonic activity in Western Australia in March and Queensland in February, by the delays of new mine developments in Western Australia and associated civil work, and by a general slow down in coal mining activities in Queensland and New South Wales from the well publicised coal transport infrastructure bottlenecks.
The combination means that revenues are likely to be some $5 million less than the $65 million for the half year ending December 2006 and for the year ending June 2007 profits before tax are likely to be about 10% below the previous advice of $10-11 million. We had been hopeful that the acceleration of activities in April, May and June would recover this position but delays and deferrals now make this unlikely.
The outlook is for continued high levels of rig utilisation in hard rock and civil sectors, but lower utilisation in coal for the next twelve months. Iron ore and coal prices are predicted to rise again this year providing further impetus for expansions and new mines. There is a list of major hard rock projects commencing in the second half of 2007 immediately leading to civil and hard rock mining work opportunities. It will be longer before the coal sector rebounds as increased coal mine production levels depend on completion of the infrastructure expansions underway.
The ability of Brandrill to optimise its fleet by balancing activities between sectors remains a major strength and the overall resource industry outlook should ensure that we continue the growth of previous years in 2007-08.