The company’s net profit after tax for the six months to December 2013 was $A38.1 million, a 18.5% drop from the $46.7 million posted for the six months to December 2012.

Sales revenue also dropped 17% to $563.6 million.

“In spite of the first six months of this financial year being particularly challenging for Bradken with sales remaining at low levels, we significantly exceeded our first half guidance of $85 million earnings before interest, tax, depreciation and amortisation,” Bradken managing director Brian Hodges said.

“Since June 2013, we have seen order intake levels strengthen for all consumable product ranges.

“Mine production levels are continuing to increase and we expect sales to improve through the second half.”

Sales revenue for the mining division was down 16.9% to $174 million but margins were up 2% to 36.1%.

The company said demand for ground engaging tools was flat across most regions, with a significant contraction in the Australian coal market.

Sales revenue from the mineral processing division, which gets most of its sales from copper and gold mines, was up 6% to $117 million on the back of higher demand from Australia and Indonesia.

Despite the rise, Bradken said mineral processing demand slowed abruptly in the first half, with companies destocking, delaying change-outs and cancelling or postponing new projects.

Looking to the future the company said mining growth was steady and it would continue to look for opportunities.

It said it was also waiting for due diligence to commence on a proposal to acquire Austin Engineering.

“Mine production volume growth continues to expand the consumable product market to which we are largely aligned although mining capital expenditure, especially on mobile plant, looks likely to remain at reduced levels through this period,” it said.

“Overall, we see high single-digit sales growth for most of the business with no need to increase overheads in the period leading to sound profit conversion.”

The company forecast EBITDA of around $180 million.

Bradken shares were down 8.7% to $4.75 this morning.