The world's largest drilling company Boart Longyear is bracing for another tough year as mining companies continue to slash their exploration budgets.
The company made a loss of $US329 million ($A366.13 million) in the first half of 2013, driven largely by massive falls in earnings in its drilling services division.
Investors punished the company, sending its shares down by as much as 13.5 per cent on Monday.
Boart blamed a dramatic slowdown in demand from China for the loss, as key mining customers responded by cutting capital expenditure, including drilling services.
Around half the company's drilling rigs are now laying idle.
The company was also hit by restructuring and impairment costs as it slashed 2,800 staff over the past six months.
Boart's 2012 full year profit of $US68 million was down 57 per cent from the previous year.
Chief executive Richard O'Brien said the speed of the slowdown had caught many by surprise, and he flagged further job losses amid savage cost cutting in the resources sector.
"While we continue to be challenged in implementing cost reductions quickly enough to keep pace with the markets decline, we are taking aggressive steps to control costs," Mr O'Brien said.
But he maintained that Boart was positioned to withstand the weaker trading conditions, as management and the board work to ensure adequate flexibility in the company's capital structure to withstand further weakness in the market.
Morningstar mining services analyst Ross MacMillan said it was difficult to imagine any improvement for Boart over the next year.
"With China slowing, certainly the next 12 months will be more difficult," Mr MacMillan said.
Boart's drilling services business was under immense pressure and any rebound would be unlikely in the short term, he added.
After earlier hitting a low of 48 cents, Boart shares had recovered in afternoon trade to be down 5.25 cents, or 9.5 per cent, at 50.25 cents at 1522 AEST.
The share price plunge further reduces Boart's market value, which had already fallen by 76 per cent since February.
"It appears that a lot of people who wanted to get out of this company are already out and the large short position in this stock means it gets some support," CMC Markets chief strategist Michael McCarthy said.
