About 54 local jobs will be axed when RCR Tomlinson shuts down 14 operations across the country, with the company seeking to significantly reduce its exposure to the depressed coal market.
RCR announced 270 jobs will be lost over the coming months when it discontinues 12 of its unprofitable businesses in the coal mining services sector, along with some of its general fabrication facilities.
It is not yet known which operations in Western Australia will be affected, while two of the 14 discontinuing operations are located overseas.
In a statement, RCR said the continued pressure on service providers to reduce pricing was unsustainable.
“Provision of (coal mining) services is unlikely to return to a profitable business in the foreseeable future,” the company said.
But it reaffirmed its commitment to operations in iron ore, gold, base metals and mineral sands.
The company said it had been hit by diminishing support for its fabrication services, with customers in Australia sourcing the work overseas.
“RCR intends to discontinue a number of general fabrication facilities,” it said.
“RCR will continue to manufacture its proprietary equipment and deliver our off-site repair capability in our remaining more specialised facilities for our key customers.”
The company also plans to shift its resources towards its transport and renewable energy portfolios, where it believes there is a strong future market for the business.
RCR estimated the budgeted revenue of the discontinued operations to be about $100 million.
“Therefore the closures come with a reduction in revenue, mainly mining services and associated losses,” it said.
The company expects the cost of redundancies, discontinuing operations and other one-off items to add up to about $44 million.
“Further measures may be implemented following the re-organisation to ensure the company going forward has a lower cost base and is geared toward growth in FY17,” RCR said.
The company expects underlying net profit for continuing operations to remain consistent with previous forecasts of between $18.2 million and $26.5 million for FY16.
RCR shares were 4.3 per cent lower to $1.32 each at 10:10am.
