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Australia’s Boom Logistics’ CEO Resigns Amid Lower Profits

Australian crane and aerial specialist Boom Logistics last week said it expects its full-year profit to drop by as much as 20 percent, the company said, as recent severe flooding in Queensland is affecting its second-half performance.

Boom Logistics announced a preliminary underlying net operating profit for the first half of fiscal 2008 to drop 22 percent year over year to AU $15.3 million (about U.S. $13.7 million).

In November, the company said it expected a result of $17 million to $18 million, but lower-than-expected customer demand during the pre-Christmas period led to a lower result.

Boom Logistics also announced the resignation of director and CEO Mark Lawrence. The company didn’t state if the resignation was caused by the lower-than-expected results.

The result is subject to a final audit review to be completed over the next week. The company added that the Queensland flooding will impact second-half performance as well. “This area of our business accounts for approximately 9 percent of group income, and we are expecting that disruptions to activity will apply for the entire first quarter of calendar 2008,” the company said. Boom said that once operating access is regained, there will be heightened activity to restore mining operations, requiring increased demand for Boom Logistics equipment.

Boom Logistics said demand for cranes strengthened during the first half, but at lower margins, a drop caused by higher costs for labor, fuel and consumables. Revenue for the first half rose 19 percent to AU $202.4 million and EBITDA rose 6 percent to $51 million.

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