Ausdrill sinks to loss

PREVIOUSLY announced impairments have resulted in a $A177.4 million loss for Ausdrill, but the company expects to benefit from a higher level of activity in the gold sector this year.
Ausdrill sinks to loss Ausdrill sinks to loss Ausdrill sinks to loss Ausdrill sinks to loss Ausdrill sinks to loss


Kristie Batten

Impairment charges for the December half totalled $197.3 million.

However, revenue for the period was only down 2.3% to $413.6 million and the company posted an operating profit of $19.9 million, a 3.7% rise.

Cashflow from operations increased by 17% to $76.9 million.

Earnings before interest, tax, depreciation and amortisation dropped 37.2% to $59.1 million, while EBIT dropped 63.1% to $15 million.

The company said earnings were impacted by iron ore cost-cutting, delays in achieving continuity of work in the energy drilling sector, the deferral of mining at Resolute Mining’s Syama gold mine in Mali, and continued underperformance of divisions including exploration, mineral assaying and equipment hire.

Despite the loss, Ausdrill declared a fully franked interim dividend of 1c per share.

The company repaid $56.8 million of debt during the half.

Ausdrill said it expected the mining industry to continue to focus on cost-cutting.

“Ausdrill continues to experience challenging business conditions, largely as a result of the lower commodity prices and the completion of expansion activities in the Pilbara,” Ausdrill managing director Ron Sayers said.

“However, the lower Australian dollar means the domestic gold industry is poised for a recovery.

“Gold is our core business, and we therefore expect to benefit from a resumption of spending by the industry which is likely to occur later this year.”

Ausdrill expects revenue and EBITDA for the current half to be similar to the first half, excluding any significant items or impairments.