Australian crane and access rental company Boom Logistics expects trading conditions to remain challenging for at least another year after announcing a statutory loss of A$37 million (€24.5 million) after tax for the 12 months to 30 June.
The net loss in the 2014 financial year was A$79.5 million (€53 million).
Boom said the first half of its financial year was affected by lower contract maintenance volumes in Western Australia, Central Queensland and New South Wales; downward price pressure in highly competitive markets; and project delays in the telecoms and energy sectors.
The third quarter also brought a further fall in commodity prices, particularly iron ore. Despite some improvement in business activity in the final three months, demand continues to be volatile.
Overall, operational revenue fell from A$115.6 million (€76.8 million) in the first half of the financial year to A$91 million (€60.5 million) in the second.
“As noted in several market communications over the past two years, Boom’s industry environment has continued to change substantially,” the results announcement said.
“These changes and the impacts on the resources and mining services sector are well publicised. The specific implications for Boom have been a marked increase in earnings volatility against a backdrop of declining revenue and profitability.
“Boom expects trading conditions to continue to be challenging over the next 12 to 18 months. The impact of recent sharp declines in commodity prices, the cancellation or completion of construction projects in the resources sector and subdued project activity in the infrastructure sector will continue to place downward pressures on volumes and prices.”
Boom has idenitified a number of profit recovery initiatives for 2016, including improved labour cost management processes and a step change reduction in fixed costs.
CEO Brenden Mitchell said: “Our key initiatives for profit recovery in the 2016 financial year reflect the strategies we have developed and executed over the past two years. Whilst we expect market conditions to continue to be challenging, we will remain focused on the profit recovery programme.”