The company, which specialises in contract drilling for the mining sector, cut 2000 jobs – around 20% of its workforce – despite hitting a record profit of $US157 million in 2008, 93% higher than in the previous year.

Revenues were up as well to $US1.84 billion in 2008, 17% higher than in 2007, while earnings before interest, tax, depreciation and amortisation were 20% higher at $356 million.

The company said despite these good headline figures it had set a cost-savings plan in motion late last year and this included job cuts, a wage freeze, and reductions in executive salaries and director fees.

More job cuts can be expected in the first half of this year.

Boart Longyear chief executive Craig Kipp said while its 2008 results were strong, the level of business activity in the company’s key markets declined sharply in late 2008.

As a result, Boart’s backlog of manufactured product dropped sharply and the utilisation level of its drilling rig fleet has declined.

So far, cost-cutting has shaved an estimated $US80 million from the supplier’s bottom line.

“The company’s priorities in 2009 will be managing its liquidity position, reducing operating and overhead costs, and improving cashflow generation,” Kipp said in a statement.

Capital expenditure will be reduced by $114 million to $40 million in 2009, and the company will not make any acquisitions during the year.

The company – based in Adelaide but providing contract drilling services to customers in more than 30 countries – has also cancelled its dividend payment.

Shares in Boart were up 12% today to 14.5c.