Bradken posts profit decline

Bradken has blamed ongoing volatility in a number of commodity and mineral markets for its 63 per cent profit decline.

In the six months to December 31, Bradken’s underlying profit fell to $13.8 million, a 63.7 per cent decline on the previous corresponding period’s $38.1 million.

The company reported sales revenue of $495.4 million, which is 12 per cent lower than the previous corresponding period.

A net loss of $92.6 million was booked after taking into account restructuring costs of $25.5 million and writedowns of plant and equipment to $31.5 million.

Last year Bradken announced it would slash its workforce and shut down high-cost manufacturing facilities in order to deal with the downturn in mining.

So far, 544 people have been let go as part of the company-wide restructure and capex is 32 per cent lower at $22.3 million.

Chief executive Brain Hodges said he expects a slight increase in overall sales revenue in the second half with an incremental improvement in margins.

Improving mine production volumes are expected to underpin consumable sales along with the impact of market share gains of the first half for ground engaging tools, crawler systems and mineral processing.

However capital product sales are expected to decrease due to a fall in new rail car order intake, requiring further restructuring of the company’s cost base.

Consequently, the directors have determined to not pay a half year dividend this period.

Mining services companies are bearing the brunt of a downturn in the commodity cycle, with job cuts and closures mounting.

Last week Sandvik announced it will close its Wollongong operations and reduce its Kalgoorlie site in the wake of continuing mining uncertainty.

More than 63 jobs will be affected as a result.

Meanwhile, Downer EDI blamed the downturn in mining for its four per cent profit slide in the first half, which is down to $94.7 million.

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