Ausdrill off 9pct on AUD 90 million impairment - August 9>
Business Spectator reported that shares in Ausdrill have fallen after it flagged an impairment of up to AUD 90 million before tax, saying recovery in the mining services sector will be slower than earlier expected as the weak iron ore price weighs.
The group said that it had reviewed the carrying value of assets and expects to report a non cash impairment expense of between AUD 60 million and AUD 90 million in its full year results.
The company said that a review of the company’s longer term forecast on the back of the recent fall in the iron ore price and continued challenging market conditions have resulted in a view being taken that the recovery of the Australian mining services sector will be slower than Ausdrill had previously anticipated.
Ausdrill said that it is focused on improving performance and reducing debt, reaffirming plans to deleverage the business over the next 12 months. The group also flagged a corporate income tax expense in Mali of approximately AUD 2.7 million in the full year, after being notified its tax exemption has been withdrawn.
The iron ore price was trading at USD 95.50 per tonne overnight and has recently lifted off its lows after falling to USD 89 per tonne in June. So far this year it has lost more than 30%.
(Source - www.steelguru.com)