Analytical testing company ALS stands down more than 2300 workers

Testing company extends its bank debt facilities to navigate the COVID-19 pandemic.

The company issued a statement to the ASX on Wednesday stating it had extended its bank debt facilities to navigate the COVID-19 pandemic. Picture: AP

Analytical testing company ALS is standing down more than 2300 workers as it moves to sandbag its balance sheet from the coronavirus and while it recovers from a coal-tainting scandal.

The company issued a statement to the ASX on Wednesday stating it had extended its bank debt facilities to navigate the COVID-19 pandemic. It now has liquidity of more than $650m, which it described as a “prudent buffer”.

“The balance sheet remains strong with the FY20 year-end leverage ratio expected to be broadly in line with previous reporting periods and well within existing debt covenants,” chief executive Raj Naran said.

ALS specialises in sampling, preparation and analysis of coal and coal-products such as anthracite and coke. Last month it was embroiled in a scandal involving staff issuing fake coal analysis certificates.

While the coronavirus has hit about 10 per cent of its global laboratory network, Mr Naran said its commodities division had slowed primarily from economic shutdowns in Latin America, Canada and South Africa.

He said in addition to borrowing more money, the company had stood down 15 per cent of its 15,500 employees, instigated a hiring freeze and scrapped all non-essential capital expenditure.

“Although this is a dynamic situation, our management team have managed the business through challenging cycles before and we have acted quickly to align our cost base to client demand.”

Early last month ALS fired its coal services general manager and three other staff after it found 45-50 per cent of its coal analysis certificates were altered in the company’s laboratories in Newcastle, Mackay, Gladstone and Emerald.

“This is a very serious breach of the ethical standards we expect from everyone who works for ALS, and we have taken strong action to put an end to the behaviour,” Mr Naran said.

“Now that we have established the extent of the issues within the coal superintending unit,

our focus is on upgrading systems and processes to ensure the integrity of coal certifications and reassure our clients.

“While the findings of the investigation are very disappointing, we are pleased that the review found no evidence of any similar practices elsewhere in the group.”

ALS has since referred the matter to NSW Police in accordance with its legal obligations.