Boart Longyear is deep in the red, launches strategic review
With all the miners cutting their explorations budgets, drilling supplier Boart Longyear (ASX:BLY) got hit and posted a 39% drop in revenue and a deep loss in its full-year financial results released today.
The company reported revenue of US$1.223 million compared to US$2.012 million in 2012, and its EBITDA was a US$337 million loss compared to earnings of US$254 million the year before.
The company's drilling services division recorded revenue of US$917 million for 2013, a reduction of 39% from 2012. Lower rig utilisation and price reductions due to weak market demand contributed to a 51% decline in the division's EBITDA to US$142 million. The average rig count in Q4 2013 was down 1,030.
Revenue for Boart Longyear’s Products division was US$306 million for the year, a 38% decline from 2012
The company did not provide a market outlook other than saying that ". . . market conditions may not significantly recover over the next twelve months."
The markets slashed the mining supplier 15.69% to 36 cents.
The company appointed Goldman Sachs as an advisor to launch a strategic review to ". . . preserve the franchise value of both the Drilling Services and Products divisions, provide continuity of services and products to the Company’s global customer base, ensure capital adequacy to continue as a going concern and position the business to capture future growth when the market recovers."
Despite the company's dire straits, it still developed six new products in 2013.