Shares in Newsat Limited (ASX:NWT) have plunged about 25 per cent this morning after forecasting a full year net loss and forming a spending review committee to tackle costs.
Australia's largest pure-play satellite communications company made the announcement just before the market closed on Friday ahead of a long weekend.
Traders are today responding to news the company expects to report a net loss of between $5 million to $6 million in fiscal 2014, down from a profit of $10.5 million in fiscal 2013.
At the time of releasing first half results Newsat attributed its result to a loss of contracts from a key partner to the US government as a result of the withdrawal of troops from Afghanistan.
The company has also been impacted by declines in economic activity across military, mining, oil and gas sectors and says market conditions have not improved as expected.
In the face of these challenges Newsat executives have now agreed to take a pay cut of between 10 - 25 per cent and to forgo near-term cash bonuses. The company has also affirmed the initiatives will not impact the delivery of its Jabiru-1 satellite project.
Shares in Newsat were trading 24.67 per cent lower this morning at 28.25 cents.
NewSat reported a net loss of $1.6 million in the first half of the 2014 financial year.
