Swick net profit down 83%

Drilling services provider Swick Mining Services has released its earnings and dividend for the 12 months to June 30, with net profit after tax down 83 per cent year-on-year to $1.5 million.

Revenue was down 20 per cent to $117.6 million, with reduced demand for drilling services and suspension of the underground production drilling division weighing significantly.

EBITDA was down 46 per cent to $16.5 million.

The company said it was part of a global trend towards mining companies conserving cash and lowering costs.

Continued volatility in commodity markets mean the market should remain tough for mining services firms, the company said.

Fleet utilisation fell as low as 54 per cent in the second quarter of the financial year.

Swick said its world-leading underground diamond drilling technology would continue to present value for customers.

Managing director Kent Swick said it was a mixed financial year.

“The first half saw a consistent decrease in drilling spend by our existing clients who cut back where possible, any discretionary spend,’’ he said.

“The second half saw a recovery due to additional work won by the business and in the latter part of the year, many of our clients that had previously suspended rigs, recommenced drilling.

“The company’s challenge is now to effectively integrate and benefit from new technologies and operating systems developed in house to improve productivity.

“In a period of time where the output of companies in our sector can easily deteriorate, Swick has maintained its core focus of safety, productivity and quality.”

Swick was down 3.5 per cent to 27.5 cents at the time of writing.