Mining contractor NRW Holdings announced a profit slump and said it has lost more than 2300 employees over the last year as a result of the mining slump and contract termination.
The company released its figures in an ASX announcement, saying its workforce had slumped from a peak of 4592 to just 2283 during the 2013 financial year.
NRW posted a net profit of $74.1 million, a 23.7 per cent drop for the year.
This was even after a one per cent rise in revenues to $1.37 billion.
Action mining services saw a 10 per cent drop in revenue for the 2013 financial year to $41.8 million, compared to $46.6 million in 2012.
The company is forecasting a drop in revenue this financial year to between $1 billion and $1.2 billion.
The company posted a profit downgrade in June by 25 per cent to between $73 million and $76 million.
Euroz analyst Gavin Allen said NRW’s performance over the next year would largely depend on how Hancock Prospecting’s impending Roy Hill iron ore mine goes.
According to The Australian, NRW felt the brunt of Fortescue Metals Group’s move to cancel its Solomon and Christmas Creek iron ore ventures and its work at Rio Tinto’s Simandou iron ore venture in Guinea.
It also is an indication of the consequence of job cuts and the pressure the mining contracting sector is facing amid the downturn.
NRW managing director Jules Pemberton said contract modifications and cessation had had an impact on the company.
“It’s difficult to lose people, and we had to make a number of redundancies,” Pemberton said.
“We hand on to people as long as we can to redeploy them, but when you get turned off suddenly you don’t have an awful lot of choice.”
Redundancy costs stood at $5.4 million and holding costs for personnel and plant was at $13 million.
The company said it is looking at expanding into the LNG and CSG market.
It will pay a final dividend of 5c a share, which brings full-year dividends to 13c a share.
Dividends stood at 18c a share in 2012.
NRW recently won a $31 million BHP Billiton Iron Ore’s Mooka Ore Car Repair Shop contract.
It also won a $180 million contract at Rio Tinto’s Nammuldi iron ore mine in the Pilbara, as well as a $140 million drilling services contract for Fortescue’s Cloudbreak mine this year.