MELBOURNE Nov 19 Australian drilling services
firm Boart Longyear slashed its 2012 earnings forecast
on Monday for the second time in three months, expecting
earnings to fall 10-13 percent as savings from job cuts have yet
to flow through.
Hit by a slowdown in the mining industry worldwide, it also
warned it expects to take a $50 million charge on inventory and
The Denver-based, Australian-listed company said it now
expects calendar 2012 earnings before interest, tax,
depreciation and amortisation (EBITDA) to fall to between $310
million and $320 million, from $356 million last year.
It flagged in August it expected earnings to be flat to 10
percent higher. It still expects revenue to hold around $2
"Revenues are broadly consistent with expectations, but
margins in Drilling Services have been impacted due to timing of
cost take-outs associated with headcount reductions," Chairman
and acting chief executive David McLemore said in a statement.
McLemore aims to cut more than 20 percent of the company's
overhead costs, or about $70 million.
Boart expects to book a charge of about $50 million on
inventory and asset values in light of weaker demand globally
for drilling, but said the market appears to have hit bottom.
"Early indications from 2013 contract negotiations currently
underway are that market demand has stabilised and revenue
run-rate in 2013 should approximate second-half 2012 levels," it
Shares in Boart slumped to a three-year low in September and
are down 53 percent so far this year.
(Reporting by Sonali Paul; Editing by Richard Pullin)