Exploration Peak Leaves Hole in ALS's Fiscal 2014 Earnings

At the time of the first-half 2013 result, ALS ALQ management provided guidance for fiscal 2013 net profit after tax (NPAT) between AUD 235 million to AUD 255 million, implying second-half earnings flat to 17% lower than second-half 2012. Our fiscal 2013 forecast of AUD 248 million is in the middle of this range. However, falling precious metal prices have reduced exploration spend and threaten the feasibility of marginal expansion projects. Wet weather along the east coast of Australia has also pressured volumes during the March 2013 quarter. To account for these factors our fiscal 2013 forecast is trimmed 4% to AUD 238 million. Lower gold and copper prices have a larger impact on our fiscal 2014 forecast, down from AUD 235 million to AUD 217 million.