World's largest drilling company posts huge loss

Profitability would be influenced by price, productivity and management's ability to further control costs. Photo / Thinkstock

Boart Longyear has posted a steep loss and says it will review its operations after having slashed almost 3500 jobs in the past year.

The world's largest drilling company predicts key commodity prices will remain weak this year.

Yesterday, it posted a full year net loss of US$620 million in 2013, down from a US$68 million profit in 2012, hit by US$461 million of restructuring costs and impairments after cutting 3481 jobs during the year.

Chief executive Richard O'Brien has left the door open for more job losses and says the US-based company will leave all options on the table as it focuses on debt reduction and improving its capital structure.

"To that end, we have initiated a strategic review to ensure all options are considered carefully and completely, not only to meet today's needs but to position the business to capitalise on future opportunities," O'Brien said.

Profitability would be influenced by price, productivity and management's ability to further control costs, he said.

Boart Longyear said 2013 had been a challenging year, with falling commodities prices and increased political and economic risk for mining activity.

The company has not issued guidance for fiscal 2014 revenue, but says it expects primary factors driving its revenue, such as rig utilisation rates and product sales volumes, to remain consistent with fourth quarter levels.

The average rig utilisation rate for operating and assigned rigs fell to around 40 per cent in the 2013 fourth quarter, down from 60 per cent in the first quarter.

Revenue was US$1.22 billion, down 39 per cent, from US$2.01 billion.

"Mining companies continue to reduce spend and focus on cost reduction," the company said.

Boart management would also continue to pursue efficiencies such as wage freezes and changes to its bonus plan. The company did not declare a full year dividend.

- AAP