Shares in engineering and environmental consulting group Coffey plunged today after the company revised down its full year earnings in response to delays and cancellations of mining and infrastructure projects.
Coffey said its underlying earnings (EBITDA) in the current financial year would fall to $27-28 million.
The company said 54 contracted geosciences projects have been delayed or cancelled in the past 6 weeks, and blamed falling commodity prices and a stubbornly high Australian dollar for this outcome.
Its Australian geosciences and project management divisions were most impacted while operations in parts of Canada and New Zealand remained buoyant.
Coffey announced it will incur $7 million in restructuring costs in its Australian geosciences and projects business, which will result in 150 redundancies.
In its April market update Coffey said its Australian businesses were experiencing weakened market conditions, and added to that today by saying it had become “even clearer the Australian economy is contracting”.
The company has cancelled its final dividend for the current financial year.
The stock market reacted harshly to the news, cutting the company's share price by 11 cents to close at 12 cents.
This adds to a calamitous fall for Coffey shares, which were trading at 42 cents last month.
