Boart Longyear is expected to retrench more employees after the company confirmed revenue growth had fallen from a predicted 22% to 18% throughout 2008.
In a statement made to the Australian Securities Exchange, the company said in light of the recent decline in the Australian dollar as well as lower revenues from the company’s products division, a re-alignment of business support and administrative functions was imminent.
The company’s president and chief operating officer Craig Kipp said approximately 15% of the company’s rigs were now idle.
“Our products business has experienced a decline in orders for manufactured products, particularly in our capital equipment product line,” Kipp said.
“This decline is starting to flow through into lower revenues. Given the ongoing macroeconomic conditions, the company expects that 2009 will present a challenging operating environment.”
As a result, the company is taking action to implement announced cost reduction activities and other plans to reduce costs and working capital.
“As a result of lower capital spending, reduced acquisition activity and our ability to make a substantial reduction in net working capital, the company expects to reduce its outstanding net debt by up to $150 million in 2009, depending on market conditions,” Kipp said.
The company has already eliminated over 500 positions.