The Perth-based group announced a 69.9% fall in first-half earnings to $14.5 million amid what managing director Ron Sayers called "the toughest business conditions for some years".

The interim dividend was cut significantly to 2.5c a share, down from 6.5c a year ago.

Ausdrill said it expected to post a net profit before any significant items of $35 million for the full year to June 2014.

The company confirmed that it does not expect trading conditions to improve in the second half of this financial year. However, it stated financial year 2015 would see an improvement, due to recent contract wins on existing mining contracts.

Sayers said the fall in interim earnings reflected the "sharp curtailment" of spending by mining companies and the deferral of new mining projects.

"However, with the forecast increase in iron ore production from the Pilbara as well as the expected recovery in the gold price, Ausdrill expects to benefit from a resumption of spending by the industry, albeit confined initially to production-related activities," he said.

"Other areas, such as exploration and equipment hire, are likely to remain subdued for at least the remainder of this year."

The interim result included $5.8 million in write-downs related to the company’s mineral assaying and equipment hire assets.