MARKETS SPECTATOR: Bowen Basin drain

Thomas and Coffey has joined the mining service firm carnage, saying big resource companies may not restart projects in Queensland's Bowen Basin.

Another day, another profit warning by a company providing mining services.

Today it is Thomas and Coffey. The specialised industrial services company said it now expects to report a loss in earnings before interest, tax, depreciation and amortisation of between $6 million and $7 million.

“The company’s engineering and project management services business is experiencing a significant decline in the number of committed projects due largely to the continued slowdown in capital investments for mining infrastructure projects in the Bowen Basin by the major miners,” Thomas and Coffey said in an ASX statement today.

“The company does not expect infrastructure spending to recover in the short to medium term as a number of proposed projects in the Bowen Basin have been either delayed or put on hold indefinitely,” it added.

Thomas and Coffey managing director Rex Comb was not available for comment, his office said. The stock was unchanged at 5.1 cents at 11:32am AEST. It has dropped 67 per cent in the last 12 months. The benchmark S&P/ASX200 Index was down 40.9458, or 0.8 per cent, to 5021.50.

Comb, in the ASX statement, said the company has cut $10 million of annual costs or 27 per cent of last year’s expenses and is trying to cut costs further.

Thomas and Coffey joins Transfield, WorleyParsons, Cardno, UGL and Fleetwood in warning the dramatic cuts in spending by large mining companies are having a negative impact on their earnings.