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COVID-19 hits drilling contractor's bottom line

The ongoing COVID-19 pandemic has impacted Boart Longyear’s third quarter results.
COVID-19 hits drilling contractor's bottom line COVID-19 hits drilling contractor's bottom line COVID-19 hits drilling contractor's bottom line COVID-19 hits drilling contractor's bottom line COVID-19 hits drilling contractor's bottom line

Boart Longyear's Adelaide headquarters in South Australia

Staff reporter

Revenue fell 10% year-on-year to US$172 million for the quarter, which the company said was favourable compared to the 30% slump in the June quarter.

Revenue was down 17% for the nine months to September 30, or 15% when accounting for foreign exchange impacts.

Both the global drilling services and global products divisions were impacted.

Quarterly adjusted EBITDA dropped 25% to $21 million, while the company posted a net loss for the quarter of $13 million.

For the first nine months of the year, adjusted EBITDA was down 48% to $45 million.

The net loss after tax for the period was $74 million.

A positive was the 25% increase in net cash from operations to $39 million.

Boart CEO Jeff Olsen said the company was seeing a return to normal operational levels across its business.

"Many parts of the world classified mining activities as essential services which has allowed the business to continue to support our customer base; however, there are some parts of our business still dealing with the direct impacts of the pandemic and this has seen lower company revenue to date," he said.

"We are excited to see recent reinvestment into our sector with major mining houses flagging increased exploration spend and junior miners now accessing capital through equity raisings allowing them to get out and explore for tomorrow's resources.

"We anticipate activity levels will continue longer into the year and will start earlier in 2021 as mining houses look to recover lost ground in 2020."

Liquidity at September 30 was $53 million, comprising $30 million in cash and $23 million in available loan facilities.

Net debt was up 8% to $823 million.

Boart shares were unchanged today at A38.5c, valuing the company at just under $34 million. The stock is down more than 75% since the start of the year.