Swick downgrades guidance again

An unscheduled shutdown by one of its key mining clients has forced Swick Mining Services to again lower its revenue guidance, despite a rebound in fleet utilisation.

Swick today reported unaudited third-quarter revenue of $28.3 million, down 19 per cent on the $35.5 million recorded over the same period last year.

The company lifted its number of rigs in work and fleet utilisation percentage in the three months to March 31 after four consecutive quarters of falls in both measures.

However Swick said it expects its full-year revenue to take a hit from the suspension of mining at Aditya Birla Minerals' Nifty copper mine last month due to suspected ground subsidence.

Aditya is yet to put a date on when it expects to resume production at the Nifty project, prompting Swick to lower its revenue and earnings forecasts for a second time.

Swick now expects its full-year revenue to come in between $113 million and $117 million, having originally forecast revenue of between $125 million and $135 million.

It has forecast earnings before interest, tax, depreciation and amortisation of $14 million to $16 million.

The company had previously forecast an EBITDA margin of 18 to 20 per cent, which translated at the time to an EBITDA range of $22 million to $27 million.

Despite this, Swick managing director Kent Swick said there were encouraging signs for the company.

"It is pleasing that Swick experienced a rebound in rig utilisation over the last quarter as a number of underground diamond drill rigs were deployed to new contracts as well as seeing some rigs returned to work that were previously suspended," he said.

"The tender pipeline remains strong and a number of underground diamond drill rigs are being overhauled and upgraded for potential upcoming work over the next quarter and beyond."

Swick last year revealed it had cut about 100 staff amid challenging conditions in the mineral drilling sector.