Drilling company Boart Longyear has made a half-year net loss of $329 million as it struggles with a slowdown in mining investment, similar it says, to the 2009 downturn.

Boart Longyear’s result for the first six months of 2013 is down from a $98 million profit for the same time last year.

Revenue was down 35 per cent to $718 million, from $1.098 billion.

Investors punished Boart during early trade on the stock exchange, falling by 4.5 cents, or 8.1 per cent to 51 cents at 1047 AEST even though the broader Australian share market is half a percentage point higher.

It fell as low as 48.5 cents at 1006 AEST.

The company said its key customers had responded to slowing demand from China by cutting capital expenditure, including drilling services.

It said its result was also impact by restructuring and impairment costs.

Boart said it had focused on reigning in costs, including cutting more than 2,800 staff since January 1 and restructuring its business.

Chief executive Richard O’Brien said the speed of the slowdown had caught many by surprise but the company was positioned to withstand the weaker trading conditions.

“Management and the board also have been focused on ensuring the company has adequate flexibility in its capital structure over the next several years, not only to withstand additional weakness in the market but also to fund new opportunities,” he said in a statement.

“We believe we have identified an executable path forward in current market conditions and implementing a more flexible capital structure remains one of our top priorities.”

Boart opted to not pay an interim dividend for the first half of 2013.

Its outlook suggested the tough times will continue.

“Operating conditions and key performance indicators have continued to deteriorate early in the second half of the year and are similar to levels experienced during the previous market downturn in 2009.

“As a consequence, the company expects its second-half 2013 result to be lower than the adjusted result for the first half despite the benefit of restructuring initiatives.

“The company believes market expectations may not adequately reflect the risk of price erosion in the second half and may assume larger benefits in 2013 from the company’s cost reduction efforts than are likely to be achieved.”

He said Boart’s operating performance and the restructuring and impairment charges it took during the first half reflected the “very challenging conditions in our markets since the beginning of 2013”.

“The magnitude and velocity of the market’s contraction during the year has surprised many people in the industry.

“While we continue to be challenged in implementing cost reductions quickly enough to keep pace with the market’s decline, we are taking aggressive steps to control costs.

“Our latest cost reduction initiatives should lead to approximately US$90 million of reductions, on a run-rate basis, by the end of 2014 in addition to the US$70 million of reductions announced in late-2012 and already being realized in 2013.”

– with AAP