Boom Logistics : Business and Industrial Relations Update – 02/11/18

2 November 2018

ASX code: BOL

BUSINESS AND INDUSTRIAL RELATIONS UPDATE

Boom Logistics Limited ("Boom" or the "Group") provides a business update to the market.

•  Industrial action in NSW and impact on Group earnings

•  New and renewed contracts secured

Industrial Action in Pt Kembla, Singleton, Newcastle

Following a breakdown in negotiations to renew enterprise agreements (EBA), our Boom EBA workforce commenced indefinite strike action at our Port Kembla, Singleton, and Newcastle depots on 15 October 2018.

The CFMMEU is seeking a single NSW state-wide agreement with increases in Port Kembla, Singleton and Newcastle of circa 20%, 30% and 50% immediately and thereafter 2.5% increases every six months. Boom has offered pay increases of between 5% and 9% immediately and thereafter increases of 4% to 5% each year for the following two years. This offer has been rejected by the CFMMEU and its members which represents many of our employees in NSW.

The strike action is having a significant negative impact on the results in the Hunter Valley region and is challenging the economic viability of the businesses operating out of Singleton and Newcastle. Whilst the materiality of the strike action is not fully evident at this point in time, we expect a minimum impact of circa $3m EBITDA on the Group results for FY19. Actions to mitigate the impact are being considered given that agreeing to the union increases would make the Singleton and Newcastle businesses uneconomic.

Discussions are continuing to support our customers and our employees who are not involved in the strike action. The CFMMEU has not indicated any willingness to compromise on the increases it is seeking.

Boom has other enterprise agreements with its employees across Australia. This action is restricted to NSW only.

Contract Wins

Boom has signed a contract to undertake the lifting, mechanical and electrical installation of 56 wind turbine generators in Queensland, with revenue of between $12m and $15m. The contract commenced in October 2018 and will make a significant contribution to revenue sourced from wind farm installations for FY19, which currently sits at $5m for FY19 year to date.

ABN 28 095 466 961

Boom Logistics Limited

Suite B Level 1,

55 Southbank Boulevard

Southbank VIC 3006

T [phone]

F [phone]

Boom is also tendering on a number of other opportunities to commence in H2, FY19 and remains confident of achieving approximately $30m of wind farm revenue in FY19, as previously announced on 15 August 2018.

Contract Renewals

Boom has extended existing contracts with several long-standing customers for the provision of crane and travel towers lifting services. These contract extensions help support Boom's core revenue stream for FY19. Key contracts and their terms are as follows:

BMA - framework agreement, term 3 years;

Alcoa - Kwinana and Pinjarra sites, framework agreement, 3 years; and

Telecommunications - Panel agreements in place with Nokia, Ericsson, Kordia and Visionstream.

The revenue pipeline remains strong across the business supported by mining maintenance activity as well as infrastructure and telecommunications opportunities.

Further information:

Tony Spassopoulos	Tim Rogers
Managing Director & Chief Executive Officer	Chief Financial Officer
[phone]	[phone]
Media
Georgie Morell
0438 008 383

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Boom and certain plans and objectives of the management of Boom. Forward-looking statements can generally be identified by the use of words such as 'project', 'believe', 'foresee', 'plan', 'expect', 'aim', 'potential', 'goal', 'target', 'intend', 'anticipate', 'believe', 'estimate', 'may', 'could', 'should', 'will' or similar expressions. All such forward looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the control of Boom, which may cause the actual results or performance of Boom to be materially different from any future results or performance expressed or implied by such forward looking statements. Such forward-looking statements speak only as of the date of this announcement. Factors that could cause actual results or performance to differ materially include without limitation the following: risks and uncertainties associated with the Australian and global economic environment and capital market conditions, fluctuations in foreign currency exchange and interest rates, competition, Boom's relationships with, and the financial condition of, its suppliers and customers, or legislative changes, or regulatory changes or other changes in the laws which affect Boom's business. The foregoing list of important factors is not exhaustive. There can be no assurance that actual outcomes will not differ materially from these statements. Readers should not place undue reliance on forward looking statements. Except as required by law and ASX Listing Rules, Boom undertakes no obligation to update publicly or otherwise revise any forward looking statement as a result of new information, future events or other factors.