29/10/2013 - 11:16

Swick cuts staff, flags lower earnings

29/10/2013 - 11:16


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Swick cuts staff, flags lower earnings
Swick managing director Kent Swick.

Swick Mining Services has forecast lower annual earnings and cut more than 100 staff in the space of 12 months amid challenging conditions in the mineral drilling sector.

Swick today provided revenue guidance of between $125 million and $135 million for the 2014 financial year, down from a record $146.5 million in FY13.

The company has put its projected earnings before interest, taxes, depreciation and amortisation margin at between 18 and 20 per cent, which translates to between $22 million and $27 million.

This compares to the $30.8 million EBITDA Swick recorded in FY13.

"The global mineral drilling market has continued to soften during the first quarter of FY14," Swick managing director Kent Swick said.

"Swick, although less exposed to the volatility in the market than most due to its brownfield, producing mine focus will unfortunately see lower revenue and a tighter operating margin this year than last."

Swick also disclosed that it had cut 107 employees, or 17 per cent of its workforce, in the 12 months to September 30 2013.

The company recorded a total of 508 employees for the September quarter, down from 615 in the prior corresponding period last year.

Swick's revenue generated from the gold sector fell to 40 per cent for the September quarter, down from 49 per cent in FY13 and 60 per cent in FY12.

Its revenue generated from the copper sector jumped to 33 per cent for the quarter, up from 19 per cent in FY13 and 22 per cent in FY12.

Mr Swick said the company would remain focused on ensuring that its operating rigs were as efficient as possible.

He said the company's order book remained solid and the tender pipeline continued to offer opportunities for growth.

Swick shares were 5.8 per cent lower at 32.5 cents at 11:15AM WST.


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