Ausdrill expects its full-year net profit after tax excluding significant items to be $A25-30 million, down from prior guidance of $35 million.

The company said it remained comfortably within its debt covenants.

Following a review, the company said it had become apparent that the contribution to FY14 results would be lower due to higher costs, mainly due to an ageing fleet, the adverse foreign exchange impact on receivables and a reduced scope of work at the Kinross project in Ghana and Perkoa project in Burkina Faso.

Barminco owns the other half of AUMS.

Ausdrill said AUMS remained a good business and it saw further potential in west Africa.

The partners have appointed a new chief operating officer and bolstered AUMS’ management support structure to address the deterioration of the business.

Overall, Ausdrill is expecting an improved group result in the 2015 financial year with improvements in the Energy Drilling Australia and African Mining Services businesses based on existing contracts.

“Ausdrill is of the view that provided there is not a significant fall in commodity prices from current levels, the mining downturn may have bottomed out or be close to the bottom,” the company said.

“However, it anticipates that any recovery will be slow with challenging market and mining industry conditions continuing in FY15, with subdued activity particularly in the Australian market.”

The company said it would focus on cost reductions and it expected the deferral of capital works, exploration programs and non-critical maintenance by the mining industry to taper during FY15.

Ausdrill shares lost more than 10% to 87.5c.