It follows a write-down of $127 million in November last year and takes the total profit downgrade to $150-155 million.

While the initial write-down was attributed to the poor performance of both the Diamantina power station in Queensland and the West Angelas power station in Western Australia, Forge emphasised that the more recent downgrade was due to West Angelas difficulties alone.

The company said additional costs at the station were primarily due to identifying the previously unplanned scope of the project and would include engineering, construction and site establishment spending for a delivery schedule expected to be prolonged by three months.

“These causes have been discovered very recently and we went straight into halt to analyse them properly,” Forge chief executive and managing director David Simpson told reporters this morning.

“Those causes and the cost impact come as a result of our increased controls and project reviews.

“I’m quite pleased that the new team on the power station has uncovered these and we’re able to bring it to market.”

The West Angelas write-down will incur a $14 million to $19 million net cash outlay to complete the project.

First fire of the project’s gas turbines is expected to be completed in FY2014, with commissioning in early FY2015.

Simpson said the cash outlay for the works was covered by existing cash and facilities.

“We have full support from the ANZ Bank and our financiers and we’ve also been able to late last night secure full bonding for the Roy Hill project from our surety providers,” he said.

“The ongoing and expected support provided by our financiers and other key stakeholders gives Forge Group the confidence to continue to trade on a business-as-usual basis and deliver on our current work in hand.”

The company otherwise reported that its business was performing within expectations, citing ongoing works at Roy Hill and a nearly complete contract with Coalspur Mines tipped to deliver a balance in late FY2014 or early FY2015.

“Overall market conditions remain difficult with increased competition and a general tightening of the resources market,” Simpson said.

“Our strategy of diversification geographically and into asset management remains a key focus for the management team.”

Forge completed the restructure of its organisation into two geographic segments (Australia/Africa and North America) to ensure greater operational accountability, financial and customer focus.

The mining services company delivered $10 million in cost savings as part of a recent streamlining initiative, with a further $5 million to be implemented before the end of FY2014.

In addition, there are a further $5 million in one-off items expected to be achieved in FY2014.

Shares in Forge were last trading 12% lower at $1.10.