Drilling services contractor Boart Longyear has delivered a rise in profit and scrapped its final dividend after cutting 2000 jobs worldwide since October during a downturn in the mining sector.
The number of people on the payrolls in the Asia-Pacific region is currently about 2600, down from 3200 in September, regional vice-president Kent Hoots said.
The company's Asia-Pacific region comprises South-East Asia, Indonesia as well as China where Boart Longyear has a factory. In Australia, Boart is mainly active in Western Australia and Queensland.
"The cyclical nature of our business is that as drill rigs stop working we put people off. There's no major reduction,'' said Mr Hoots. "It's based on job cycle.
"The counter to that is as we get work, we pull people back in.''
Boart shares were up 0.5 cents, or 3.9%, to 13.5 cents by the close of trading.
Chief executive Craig Kipp said business activity in the company's markets had declined sharply as the global financial crisis limits access to funding and commodity prices fall.
"Due to the ongoing volatility in the global economic environment, forecasting the level of business activity over the coming months remains challenging," Mr Kipp said in a statement.
Boart is one of the world's largest drilling contractors and manufacturers, operating in about 40 countries.
Boart said the reduced payroll expenses would realise annual savings of about $US80 million ($123 million) with further job cuts in the global workforce expected in the first half of 2009.
However, profit during the 12 months to December 31 still showed the effects of the five year mining boom, jumping 93.2% on the previous corresponding period to $156.7 million on higher pricing for certain drilling services and acquisitions.
The drilling company did not declare a final dividend for fiscal 2008, after 1.5 US cents the previous year.
The company has also initiated a wage freeze and reductions in executive salaries and director fees.
Boart said capital spending would be slashed to $US40 million in 2009, down from $US154 million in 2008, with no acquisitions anticipated.
"These actions, together with a very focused program to reduce our working capital, will enable us to generate significant amounts of free cash flow, even in a very challenging business environment," Mr Kipp said.
Revenue during the calendar year increased 16.7% on the previous corresponding period to $1.83 billion driven by strong growth in the company's drilling services division.
Boart said it had initiated preliminary discussions with its banks about extending existing maturities or refinancing of its debt facilities.
The company said it expected an improvement in business activity from current levels in coming months, but the exact timing and magnitude of the improvement remains "uncertain".
BusinessDay's Chris Zappone, with AAP
