Another profit downgrade from one of Australia’s biggest contractors is proof the resources boom is peaking amid softening demand for mining services.
Shares in Transfield Services have shed more than 20 per cent after it become the latest mining services provider to cut its profit forecast and axe 113 jobs today.
The construction and engineering company’s annual net profit is expected to slide to $62-$65 million, down from February’s guidance of up to $90 million.
Fellow listed contractors UGL, WorleyParsons and Coffey International cut their profit expectations last week, citing weaker demand for resources and infrastructure investment.
Sydney-based Transfield has joined the chorus and blamed deteriorating market conditions for the downgrade.
“Ongoing uncertainty in commodity markets is resulting in the delay to, and deferment of, a range of resources and infrastructure projects,” Transfield said.
“More immediately, scope reductions and cancellations of works across the operations and maintenance sector are impacting earnings in the short term.”
Transfield has cut $29 million in the current financial year and says it will find an extra $26.1 million in savings this year to offset softening demand for its services.
Bucking the trend Transfield said activity levels in its coal seam gas, upstream oil and gas, defence and broadband divisions remained strong.
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