In yet another sign of the difficult trading conditions in the mine services industry SubZero announced it is to restructure its operations following a loss last financial year of nearly $13million.
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The Muswellbrook based company employs hundreds of workers providing mechanical, engineering and production support for 90 clients in the region including Rio Tinto, BHP Billiton and Glencore.
The company’s announcement to the Australian Stock Exchange (ASX) yesterday said the restructure would involve significant reduction in costs to support expected lower revenue levels from the mining downturn.
In addition the company was obtaining the support of secured creditors and other stakeholders to support the operations in the short term.
The company’s preliminary final report for the 2013-14 financial year does not make for pretty reading with revenue down 24.9 per cent and profit down a staggering 111.4 per cent.
Blaming the downturn in the mining sector for the results the company says there were continuing delays across the sector in scheduled maintenance work which has led to the underutilisation of the SubZero Group people and plant.
This time last month ResCo Services another locally based mine services company was placed in voluntary liquidation.
UPDATE: Subzero managing director Scott Farrell said that none of the company’s workforce in the Hunter Valley would be offered redundancies.
While Mr Farrell admitted that current employment conditions would be affected, he said that the response from employees to initial discussions had been largely positive.
Subzero will on Thursday present results of a cost-saving review to Macquarie Bank and other financiers, with the company’s board to examine the proposal on Friday.