Shares in Ausdrill, the mining services, and drilling contractor slid more than 7% yesterday after the company surprised with an impairment warning in an afternoon announcement.
The company revealed that in the preparation of its 2018-19 annual report it had undertaken a review of its working capital and balance sheet and as a result, would make write-down of up to $95 million.
Ausdrill said the non-cash impairment for fiscal 2019 in the range of $75 million to $95 million or around 2.8% to 3.6% of its assets.
The shares ended down 7.1% at $1.30. That’s the lowest the shares have been since early February.
“The review is ongoing and will be completed prior to the finalisation of Ausdrill’s annual financial report for FY2019,” the company said in a statement to the ASX.
Excluding the impairment, the company is still forecasting an underlying net profit of $98 million for 2018-19.
The company has previously flagged a $198 million increase to the value of its African Underground Mining Services subsidiary and a $31 million tax benefit mostly stemming from last year’s acquisition of underground mining contractor Barminco. These changes were revealed in the half-year report issued in February.