The market was also unsettled by news that Ausdrill’s African contracts were being hindered by adverse weather.

In a market update late yesterday after the ASX closed, Ausdrill said Fortescue Metals Group’s decision to slow down its expansion plans had resulted in a decrease of services provided to FMG.

In light of this, Ausdrill said revenue for the full year might decline by about $A50 million, or 4% of its revenue forecast, if it was unable to redeploy its equipment.

In addition, its operations in Burkina Faso were weighing on the company after an unprecedented period of wet weather brought operations to a halt.

The company is also bracing for a number of one-off costs in the 2013 financial year, forecast to amount to about $15 million before tax, that will be reported in the first half of the 2013 financial year.

These include a $4.6 million write-off owed by Central Norseman Gold Corporation, which has gone into administration, acquisition costs in relation to its purchase of BTP and costs relating to the negative swing in its foreign exchange position year-on-year.

The company did lift its FY2013 guidance from earlier in the year when it flagged a 15% increase in revenue for 2013.

The company generated a net profit after tax of $112.2 million in the 2011-12 financial year, up 53%, while sales revenue was up 27% to $1.06 billion.

Ausdrill expects revenue for FY2013 to increase 20%, which would be generated from its acquisition of Best Tractor Parts earlier in the year.

The acquisition of BTP, which will be included into Ausdrill’s financials from November 1, 2012, will account for 10% of consolidated revenues.

However, the revenue forecast was also dependant on its ability to redeploy equipment in the Pilbara and continue work at Resolute Mining’s Syama project in Mali.

“Ausdrill now expects to report increased revenues for the full year of at least 20% with the outcome dependant on a progressive redeployment of equipment in the iron ore industry as well as the continued ramp-up of the company’s new Syama project,” the company said.

Ausdrill was awarded the $US540 million ($A525.1 million) Syama contract in July, with the five-year deal touted as the single largest in its 25-year history.

But in its statement, Ausdrill advised poor weather conditions were slowing the start-up of operations at Syama.

Ausdrill expects to see the market begin to recover from February next year, which will positively impact on its earnings in the second of the financial year.

Patersons Securities analyst David Gibson said the nature of Ausdrill’s setbacks would likely be one-off impacts with FMG now more secure in its financial position, while weather issues were unlikely to persist.

On this basis, Patersons expects to lower its price target for Ausdrill but has retained a buy recommendation.