Earnings before interest expense and tax were a negative $74.7 million, compared with a positive $7.1 million the previous financial year.
The net trading profit after tax was $3.9 million compared to $10.7 million in FY13. Trading earnings before interest expense and tax were $14 million compared to $26 million in FY13.
Boom blamed the write-downs on tough coal market conditions and said they included the company’s goodwill ($70.8 million), as well as $8.3 million in restructuring costs, an impairment charge relating to assets held for sale of $4.5 million and an impairment charge for fixed assets in Western Australia of $4.8 million.
“The coal areas of both the Bowen Basin and the Hunter Valley remain under considerable pressure as mines continue to drive for reduced costs resulting in price reductions, volume reductions and general business volatility,” the company said.
Tough conditions were also experienced in Western Australia, where Boom in June last year lost a lucrative crane contract with the BHP Billiton Mitsubishi Alliance (BMA) in Port Hedland, WA.
Overall, this market turmoil has forced 103 redundancies in FY14 (Boom had already axed 130 jobs the year before) and a restructuring of Boom’s Queensland business, including physical relocation of assets and the closure of certain depots.
It has also seen Boom begin the One Boom project, which involves the merging of its Crane Logistics and Boom Sherrin businesses to lower operational costs and achieve revenue synergies.
“This integration is expected to be largely completed by the end of March 2015,” Boom said.
Following stabilisation of its Queensland business, Boom said it expected its financial performance to pick up as works on new contracts begin.
New contracts include a supplier agreement with Fortescue Metals Group for the provision of crane and labour services to WA locations including Cloudbreak mine, Christmas Creek mine, Solomon mine and Anderson Point in Port Hedland. The initial term of the contract is for 24 months with provision for two one-year extensions.
“This is an important step forward for Boom Logistics in the northwest of WA and presents an opportunity to further progress Boom’s relationship with a rapidly growing customer,” Boom said.
Boom has also recently signed supplier agreements with Aurizon and Vestas Wind Farm Maintenance Services and is seeking further work opportunities on the Chevron-operated Gorgon project in WA.
The company has also begun works on the construction of the Bald Hills Wind Farm in Victoria, which financial contributions are expected for the second quarter of FY15.
Looking ahead, Boom said it would continue to focus on using cash flow to reduce it net debt – which as at June 30 was at $89.5 million – and would continue to seek revenue growth opportunities in the resources sector, as well as the New South Wales infrastructure market.
“Boom will maintain a greater than 50% market share in the Hunter Valley and is focusing on new revenue and growth in other NSW markets,” Boom said.
“One such opportunity is the Sydney Entertainment Centre – this work will begin 2Q15 and will improve our exposure to the Sydney market as infrastructure projects come on line.
“Opportunities are being explored and tenders submitted on a number of maintenance contracts in Queensland to improve our Bowen Basin-based businesses.
“Boom does not expect a significant change in prevailing market conditions until planned infrastructure projects begin to appear in late FY15, followed by an expected increase in activity through FY16 and FY17.”
