Boart Longyear cuts guidance, relocates
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Drilling company Boart Longyear will move its Perth operations overseas to cut costs, and has again reduced its earnings forecast.
The company carries out exploratory drilling for resource companies and also makes drilling equipment.
Boart Longyear on Monday said it would cut annual costs by about $US70 million ($A68.08 million), or 20 per cent of its total overheads, as it deals with lower demand.
The savings would be achieved by relocating its manufacturing operations from Perth to an existing facility in Poland and other locations, Boart Longyear said.
The savings initiatives were expected to cost $US15 million to $US20 million ($A14.59 million to $A19.45 million), the company said, but offered no further information on the number of job loses.
However, chief executive David McLemore said the company's earnings forecast had been reduced because margins were not being achieved due to delays in staff reductions.
Boart Longyear now expects earnings before interest, depreciation and amortisation (EBITDA) in the 2012/13 financial year in the range of $US310 million to $US320 million ($A301.51 million to $A311.24 million).
That is down from its previous forecast of $US360 million to $US390 million ($A350.14 million to $A379.32 million), most recently confirmed in October.
"Revenues are broadly consistent with expectations, but margins in drilling services have been impacted due to timing of cost take-outs associated with headcount reductions," Mr McLemore said in a statement.