Mining services company Boart Longyear says the fall in demand for its products may be over, but warns analysts are over-estimating what the company will earn in 2014.
The company's earnings continued to fall in the first half of 2014, due to weakening demand for drilling and mineral exploration services and products after the peak of the mining investment boom.
Boart Longyear has made major changes to its business in the past two years in response to falling demand, including the removal of more than 5500 staff.
Earnings of $18 million in the six months to June were down from $80 million in the same period a year earlier, the company said today.
Chief executive Richard O'Brien said utilisation of its equipment had fallen each year for three years, but that trend may now be at an end.
"We now feel we are at, or approaching, market bottom, unless commodity prices for mined products fall materially from existing levels or mining companies are not successful in pushing forward planned mine expansion or development activities," Mr O'Brien said.
The company expects utilisation of its equipment will remain flat for the rest of the year.
It has not issued financial forecasts for the year, but warned analyst estimates for full year earnings of between $26 million and $73 million may be too high.
"The company believes that analyst estimates at the high end of the range currently may not fully reflect market conditions for demand and, in particular, the price pressure currently facing the exploration drilling services industry," he said.
Boart Longyear's net debt has also grown, rising by $12 million to $556 million in the six months to June.
But it expects to remain compliant with all of its loan agreements until at least the end of 2014, which the company said will give it time to complete a review of measures it can take to improve its balance sheet.
That review, which began in February, is continuing with the assistance of Goldman Sachs and investment bank Greenhill, the company said.
Boart Longyear shares were up half a cent at 23 cents at 1305 AEST.