Bradken (BKN) plunged by a record 40.27% today after the company said earnings growth was below market expectation and it now anticipates profit growth for the remainder of the half to be flat.
This is the biggest fall since the mining and freight services company began trading in 2004 and has decreased Bradken's market value by $548 million.
The company forecasts earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to December 2007 to rise about 12% on the same period last year.
For the year, it expects EBITDA growth of around 20% and earnings per share (EPS) growth of about 15%.
"We flagged at the 2007 full year results announcement and the annual general meeting that mining volumes have not been growing significantly," the company said in a statement.
This lack of growth has been compounded by the delay of some mine expansion projects which has affected first-half earnings.
"A number of these projects are expected to be executed in the second half."
The company said its industrial division is expected to have a strong first half and second half.
The rail division was also likely to have a robust first half result, which would have been stronger except for delays in the start up of a major coal wagon project..
Bradken's Power and Cement division is also expected to improve in the second half.
Bradken was valued at 15.9 times estimated 2008 earnings, compared with 24.5 times at the close of trade yesterday, according to Bloomberg calculations. Rival Downer EDI Ltd. trades at 11.1 times estimated earnings, while Emeco Holdings Ltd. is at 8.7 times.
Bradken had earnings of $47 million and net income of $22.8 million in the previous corresponding period, it said in an announcement on February 6.
Bradken closed down at the intraday low of $8.84, a loss of $5.96.
