More losses for struggling drilling services firm Boart Longyear as it struggles to meet the pressures from the extended downturn in mining and exploration.
Like its 2015 result, the company said yesterday it had narrowed its first quarter loss to $US61 million ($A83.67 million) from $US71 million a year ago.
The now usual combination of the mining sector downturn, lower prices and unfavourable currency movements again wreaked havoc on the company’s finances.
Revenue for the three months ended March 31 fell 24% to $142 million.
"The first quarter of 2016 was another challenging quarter for the resources sector. Though we have seen recent improvements in commodity prices, gold in particular, exploration levels remain low,” the newish CEO Jeff Olsen said in yesterday’s statement.
In 2015, Boart Longyear saw its net loss narrow slightly to $US326.28 million ($457 million) from the year-earlier $US332.72 million as revenue fell 15% to $US735 million.
“We continue to make progress in our productivity and cost cutting initiatives, and this is apparent when comparing our first quarter 2016 margins to first quarter 2015.
"While revenues were down $45 million from first quarter 2015 to first quarter 2016, adjusted EBITDA was up $4 million and net cash flows used in operating activities improved by $25 million (improvement was $6 million net of fees associated with the Company’s recapitalisation in the first quarter of 2015),” Mr Olsen said.
"When comparing the first quarters of 2015 and 2016, it is helpful to recognize that the first quarter in 2015 was the strongest quarter of the year, which is contrary to what occurs in a typical year.
"Key drivers to our margin and cash improvements were careful cost control and a significant improvement in drilling performance as a result of our productivity initiative started in August 2015.
"We expect to see continued improvement in profitability as our productivity initiative is rolled out to all drill sites.” Mr. Olsen continued, “Looking forward, our goal is to be the industry leader in safety, productivity, and innovation. As we continue to drive improvement in these areas, we aim to operate the Company on a cash-neutral basis beginning in 2017 and prepare to address our 2018 debt repayment schedule.”
Net debt rose to $US639 million from $US538 million, which towers over the company’s sharemarket worth of just $94 million. The shares fell another 4% to 9.6 cents.
