Net profit after tax for the half came in at a loss of $US142.8 million ($A153.2 million) compared to a loss of $329.4 million for the same period last year.
Revenue for the six months was down 41.4% year on year to $421.5 million.
Earnings before interest, tax, depreciation and amortisation also came in at a loss of $33 million, although this reflected an 89.9% improvement over the $235 million loss in the year-ago period.
The US-based drilling services company said the results were tied to decreased exploration budgets in the mining sector, in turn due to weak metal pricing and project development risk factors.
It forecast future performance to continue facing these headwinds and outlined an agenda focused on reducing operating costs as well as sales, general and administrative costs.
The total cost of goods sold was reduced for the half by 37.4% year on year to $365.6 million while capital expenditures were down 73.4% to $32.7 million.
The company highlighted a stabilisation in its rig utilisation rates at about 40%, saying there were signs that the sector was approaching the bottom of the market.
Speaking this morning in a presentation of the financial results, Boart president and chief executive Richard O’Brien clarified that while the company was optimistic, it was not necessarily predicting a turnaround.
“We’re smart enough not to call it,” he said.
“We’re obviously not going to guarantee it but we have come down so far that I don’t really see how we come down further, unless we see significant cuts in mining spend, which I believe would result from lower commodity prices or the inability to move project development and exploration forward.
“I think the trend has to change over the next several years to putting more money into the ground for exploration and development, or reserve lives will get shorter and valuations will come down.”
O’Brien said Boart believed that at some point in the near future, mining companies – particularly gold and copper players – would have to start spending more on exploration and project development to add to or sustain their reserve base.
“Those companies, in particular gold companies, have shorter reserve lives than a lot of the other mining companies,” he said.
“So not replacing reserves will impact their valuations at some point.”
Staff headcount was down 19.2% compared to the previous corresponding period and net debt was 1.4% lower at $555.8 million.
Net debt was projected to be about $531 million at year-end and full-year 2014 revenue was estimated to be in the range of $766-878 million.
“We’re hopeful that we’ll see some recovery in 2015 but we’re not planning on it,” O’Brien said.
“We continue to work through our strategic review, making sure we have liquidity available to meet our needs, to make sure customers get what they need and we pay all of our suppliers on time.”
