March 3, 2009 / 10:23 PM / 9 years ago

UPDATE 1-Major Drilling posts Q3 loss on charges

* Q3 loss/shr C$0.21 vs EPS C$0.31 last year

* Q3 revenue falls 27.6 pct to C$87.4 mln * Co says to limit capex to C$25 mln to C$30 mln

March 3 (Reuters) - Mine drilling services provider Major Drilling Group International Inc (MDI.TO) posted a third-quarter loss, weighed down by charges, and said fourth-quarter revenue could more than halve, hurt by project cancellations and delays.

“In January, due to the uncertainty in the economy, many customers delayed or cancelled their exploration drilling plans, which impacted the quarter’s results compared to last year,” Chief Executive Francis McGuire said in a statement.

Delays and cancellations will continue to hurt the company through at least the first half of 2009, McGuire said, adding that sagging demand has significantly increased competitive pressures, which will impact pricing.

For the quarter ended Jan. 31, net loss was C$5.1 million compared with a profit of C$7.2 million a year earlier.

Excluding restructuring and impairment charges, earnings for the quarter was 2 Canadian cents per share, Major Drilling, one of the world’s largest mine drillers, said.

Analysts on average were expecting a loss of 2 Canadian cents a share, before items, on revenue of C$92.7 million, according to Reuters Estimates.

The current economic environment has hurt drilling in the short to medium term, particularly on base metal projects where Major Drilling expects to see a significant slowdown in activity, the company said.

Major Drilling said it expects to generate positive cash flow in 2010 and would limit capital spending to between C$25 million and C$30 million.

Shares of the company closed at C$11.40 Tuesday on the Toronto Stock Exchange.

For the alerts, please double click [ID:nWNAB9753] (Reporting by Arup Roychoudhury in Bangalore; Editing by Deepak Kannan)

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