The company predicted net profits for the year of AUD36m–AUD37m, from AUD33m in full year 2006. This almost flat growth compares poorly to a profits leap of 110% in full year 2006. A large part of Boom’s business is focussed on maintenance contracts for mining and minerals companies. The company said that unusually severe weather had left customers prioritising catching up on their own lost production, rather than on planned maintenance programmes.
The July 17 announcement comes on the heels of a similarly bleak prediction on April 2, when the company said its operations in the Pilbara region had been closed down for two weeks by three successive cyclones, and that work in parts of Central Queensland had been stalled for up to 19 days by flooding.
In that announcement, the company predicted second half earnings “only marginally higher than the first half”. As the company reported net profits after tax of AUD19.6m in the first half, this would raise expectations of net profits of at least AUD39.2m for the full year. The new warning amounts to a downgrade of around AUD3m on that, already cautious, projection.
Additionally, the company said that its business had been hampered by worldwide supply shortages. CEO Mark Lawrence expressed disappointment at the impact of the weather on the company’s result, but said he was confident about the outlook for the business and the strength of demand from its customers.