Reuters: Hot Stocks: Australia's Ausdrill warns on profit fall as mining slows

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Australia's Ausdrill warns on profit fall as mining slows Apr 17th 2013, 00:28 MELBOURNE, April 17 | Tue Apr 16, 2013 8:28pm EDT MELBOURNE, April 17 (Reuters) - Australian mining services firm Ausdrill warned on Wednesday its full-year profit would fall around 17 percent, hit by a worse-than-expected slowdown in mining activity, sending its shares down by as much as a fifth. The company, which provides equipment to miners in Australia and Africa, said it expected a net profit after tax of between A$90 million and A$96 million ($93-99 million) for the year to June 2013, down from A$112 million a year ago. Ausdrill and analysts had been expecting a flat net profit this year, according to Thomson Reuters I/B/E/S. The firm said it had cut 13 percent of its staff over the first eight months of the financial year to help reduce costs. "However, the group's profits are expected to be impacted by the general slowdown in activity in the Australian mining sector that has occurred from September 2012 onwards, and which has not recovered as previously expected," the company said. The company has been hit by miners cutting exploration drilling and pulling back on hiring equipment as they deferred projects and slowed production, delaying some coal seam gas drilling. "We expect these trading conditions to persist in the near term," Ausdrill said, referring to a surplus in the equipment rental market. Ausdrill's shares slid to a 20-month low of A$1.69 and last traded down 12 percent at A$1.86 after coming off a trading halt. The broader market was up 0.7 percent. ($1 = 0.9661 Australian dollars) (Reporting by Sonali Paul; Editing by Ed Davies) Link this Share this Digg this Email Reprints

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