Boart swings to deep FY loss

Group hit by weakness in core markets; $US421m impairment charges, restructuring costs weigh; shares slide 12%.

Boart Longyear (BLY) has swung to a deep full-year loss and declined to offer any guidance for the year ahead as market uncertainty continues to weigh on the mineral exploration company.

Investors punished Boart Longyear in early trade. At the 1015 AEDT official market open, Boart shares were 12.94% lower at 37 cents, against a benchmark index increase of 0.06%. In earlier trade Boart shares touched as low as 35 cents.

In the year to December 31, Boart posted a net loss of $US620 million, a significant decline on the $US68 million profit recorded in 2012.

The result was weighed down by $US491 million in restructuring charges and asset impairments, of which $US421 were non-cash, taken as a result of continuing weakness in core markets.

In the same period, revenue was $US1.223 million, a 39% slide on the $US2.012 million recorded in the previous year.

Net debt increased over the year, lifting from $US512 million to $US526 million.

The group declined to pay a final dividend.

Market uncertainty to remain: CEO

Boart Longyear chief executive officer Richard O'Brien said the year had obviously been challenging for the group, but noted it had taken "decisive and aggressive action" to confront and manage the challenges created by its markets and leverage.

"We will continue to focus on our current priorities of debt reduction, safety and compliance and serving our customers’ needs," he said.

"We also will continue to pursue improvements to our capital structure as necessary to maximise value for all stakeholders."

Mr O'Brien said the group had initiated a strategic review to ensure all options were considered carefully and completely, to position the business to capitalise on future opportunities.

"Our markets will improve and, when they do, we are much better positioned to deliver improved profit margins and cash generation through our cost efficiency measures, revised capital deployment strategies, increased speed to market, more customer-driven design and our combined platforms for supply chain, inventory management and maintenance services," he said.

“While we cannot predict when our markets will recover, we have the experience of 120-plus years to know that mineral exploration spending will increase, as mining company reserves must be replenished to satisfy ongoing, worldwide commodity demand."