Ausdrill Ltd., an Australian mining services provider, slumped to the lowest in more than 2 1/2 years after cutting full-year profit guidance by as much as 20 percent because of a slowdown in the mining sector.
Ausdrill, which counts BHP Billiton Ltd. and Rio Tinto Group as its major customers, fell 9 percent to A$1.93 at the close of trading in Sydney, the lowest since Sept. 3, 2010. The company’s shares earlier dropped as much as 20 percent.
Profit will probably be A$90 million ($93 million) to A$96 million for the 12 months ending June 30, Ausdrill said today in a statement. The Perth-based company forecast profit of about $112 million in February when it gave six-month results.
“The group’s profits are expected to be impacted by the general slowdown in activity in the Australian mining sector that has occurred from September 2012 onwards, and which has not recovered as previously expected,” Ausdrill said.
Mining companies are cutting expenditure and deferring new projects as commodity prices decline. Equity and commodity markets tumbled after China, the biggest metals user, this week reported that economic growth unexpectedly lost momentum last quarter, further pressuring profit expectations for miners.
Separately, Emeco Holdings Ltd., which rents earthmoving equipment to the mining industry, said earnings in the six months to June 30 will be below the first half, reflecting challenging market conditions in Australia and Indonesia.