Boart backs itself

DRILLING services provider Boart Longyear has announced it expects to have the liquidity to meet obligations to creditors, while second-quarter revenue rose from first-quarter levels.

Sheryl Lafferty

In a preliminary filing before final results to be posted on August 26, the group reported revenue of $US224.1 million ($A238.5 million) in the three months to June 30, down from $348.7 million in the previous corresponding period but up from $197.4 million in the first quarter.

Adjusted earnings before interest, tax, depreciation and amortisation fell to $14.1 million in the June quarter, from $40.1 million in the prior corresponding period. The result was up from $3.8 million in the March quarter.

Boart expects it will remain compliant with all its bank financial covenants at least through to the end of 2014, which it says will allow enough time to implement a recapitalisation solution from its strategic review. However, the company warned that changes in market demand could risk its ability to comply with its covenants.

“We expect to have the liquidity and financial resources necessary to fund our operations for the foreseeable future, including supporting our customers’ needs and meeting our obligations to our suppliers and other creditors,” Boart Longyear CEO Richard O’Brien said.

The company also noted that analyst estimates for full-year 2014 revenue range from $766 million to $936 million, stating that estimates at the high end of the range may not fully reflect market demand and price pressures.

Shares in Boart have recently been volatile as investors digest the group’s ongoing review of recapitalisation options and a ratings downgrade from Standard and Poor’s.

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