Most people know by now that the mining services sector is struggling.
Both big and small miners are taking their operations in house, renegotiating existing contracts at lower rates, or cancelling contracts altogether. As a result, the music has stopped and mining services are rushing to find a seat to sit on. Many appear to be sharing seats.
If you wanted to know how bad it really is, here's proof from the companies' most recent results.
A J Lucas (ASX: AJL) – revenues down 32%, records a net loss of $78.7m.
Ausenco (ASX: AAX) – full year revenues down 27%, net loss of $35.6m.
Austin Engineering (ASX: ANG) – revenues down 32%, net profits falls a whopping 95% to just $0.9m.
Boart Longyear (ASX: BLY) – full year revenues down 39%, net loss of US$620m, including US$461m of restructuring charges and impairments.
Bradken (ASX: BKN) – revenues down 17%, net profit falls 18% to $38.1m.
Emeco Holdings (ASX: EHL) – revenues down 48.8%, records net loss of $179.8m, including impairments of $165.4m.
Global Construction Services (ASX: GCS) – revenues down 3%, net profit down 30% to $6.5m.
Imdex (ASX: IMD) – revenues down 28%, net profit falls 7% to $15.3m.
Logicamms (ASX: LCM) – revenues up 3.2%, net profit falls 63% to $2.1m.
NRW Holdings (ASX: NWH) – revenues down 35%, net profit fell 54% to $22.4m.
Sedgman (ASX: SDM) – revenues down 46%, net loss of $6.7m
Swick Mining Services (ASX: SWK) – revenues down 25%, net loss of $0.4m
Seven Group Holdings (ASX: SWM) – Westrac Australia division revenues fall 47%, EBIT falls 65% to $97m.
But that's not the worst of it.
Looking at their outlook statements suggest we haven't hit the bottom yet, and things will likely get worse before they get better. We may yet see some of the above go to the wall if business conditions don't improve.
Foolish takeaway
It's not all bad news though. Some companies with exposure to energy, infrastructure construction and other sectors saw profit growth and forecast a rosy period ahead. I'll run through that list in another article.
