There was little positive news today when Boart Longyear Ltd. (ASX: BLY) reported its results for the half-year to 30 June 2015 alongside the resignation of the company's Chief Executive Officer Richard O'Brien.
Overall activity within the mining industry continues to decline and contracting companies are being squeezed for every last penny and most are currently operating at a loss.
Boart Longyear reported a 9% decline in revenue to US$387 million during the half-year whilst the company posted a total loss of US$152 million, compared to a loss of US$143 million in the prior corresponding period.
A US$31 million impairment charge was booked against its property, plant and equipment during the period along with restructuring costs of US$10 million.
Boart Longyear currently has US$677 million of debt which resulted in a US$36 million interest bill for the half-year. With only US$120 million of cash in the bank and the business losing more than US$100 million every six months, the outlook for the company is pretty grim.
The media release stated that: "The Company is not providing an outlook for 2015 revenue or EBITDA… the Company's financial results, especially margins, will continue to be challenged by extremely competitive industry pricing for drilling services".
With an uncertain outlook and a high chance of additional losses ahead of it, investors would be wise to avoid Boart Longyear and the mining services sector altogether.
