how low can it go????, page-19

horrible chart just free falling,must be major holder slowly liquidating position

from open briefing 2/5:

1-.EBIT:- If fourth quarter EBIT underperforms by the same $7 million margin as the third quarter, this
would imply full year EBIT of $25 million, down 30 percent, with second half EBIT of $7
million, down from $17.8 million in the first half and $22.7 million in the second half of the
previous year.
Could current half performance be this weak?

MD & CEO Brenden Mitchell
Typically our fourth quarter is a lot stronger than our third quarter, but there’s volatility in the
marketplace that makes it very hard to forecast. Higher cost coal miners have significantly cut back their maintenance requirements and we don’t have a clear line of sight on
infrastructure work that gives us cause for optimism in the next few months. However, our
businesses in Western Australia and South Australia are still performing solidly and Boom
Sherrin is expected to perform better in the fourth quarter than it did in the third quarter, with
the introduction of some new capital and with some telecommunication projects having
commenced.

2-.COST CUTTING:- What level of annual savings are
expected from the restructuring initiatives in the current year and when will they be realised?

MD & CEO Brenden Mitchell
This year, we’ve had to
implement 101 redundancies year to date to try to match our resource to the demand.
These redundancies have been focused around New South Wales and Queensland where
coal and related activity has declined, and will bring total cost savings of around $12 million
to address the reductions in revenue.

3-.OPERATIONS:- What are the broader aims of this restructuring, and will the restructured business be able to
respond adequately when conditions improve?

MD & CEO Brenden Mitchell
The restructuring earlier in the year reflected our withdrawal from the Brisbane market and
the scale-down of our Port Kembla operations. It was about getting the cost profile right for
the activity we see in our east coast markets.
It’s clear that coal miners and the allied services that support that industry in the Hunter
Valley and the Bowen Basin are facing challenging conditions given the strength of the
Australian dollar, lower coal prices and the high cost of labour that’s been built in over a
period of time. All of us working in the sector have to try to strike a balance to ensure we
can all capitalise on what is a very good resource.
Of course we recognise the need to maintain our skill set, for example for our larger cranes
for infrastructure work and in areas we’re seeing our pipeline increasing. But where activity
is significantly reduced, as it is in some of our markets in New South Wales or Queensland,
we’ve had to adjust our people accordingly and we’ll continue to do so when required.

4-.CAPEX:- You had previously flagged capex of $60 million for the current year. Can you comment on
current capacity utilisation levels and your investment intentions in the weaker operating
environment?

MD & CEO Brenden Mitchell
Capex this financial year will be in around $53 million, lower than we previously anticipated.
Also, we haven’t got any significant plans for major capex in the next financial year, as we
have assets we believe we can redeploy as demand increases. There are also assets that
will become available for sale as part of the restructuring activity. We would therefore expect
a significant reduction in our capital spend next financial year, but we’ll work on those
numbers in the coming months and give a full update in our full year results announcement.