The company had previously forecast the ramp-up of operational drill rigs to 85 by the end of June, but said record rainfall across Australia since late 2021 had materially impacted its target.

"The company has incurred material costs in preparation for the commencement of these new projects and will not be able to mobilise and generate gross margin from operations of these projects until it is dry enough to do so," Mitchell said.

"COVID-19 related absenteeism due to illness or close contact isolation is currently higher than it ever has been since the start of the global pandemic with the company's productivity and project margins reduced as a result.

"Whilst the Company remains positive that absenteeism levels will decrease in the near future particularly given the recent relaxation of the close contact isolation requirements, the impact of absenteeism on revenue and operating costs remains ongoing."

As a result, Mitchell has lowered FY22 EBITDA guidance from A$40-44 million to $31-35 million.

The company said the delays had been partially offset by new contract wins and extensions and reaffirmed FY22 revenue guidance of $200-220 million.

It expects capital expenditure on new rigs would be largely complete by June 30, allowing it to focus on generating strong cashflow.

"The company anticipates that the temporary disruptions to operations experienced during FY22 will lessen in frequency and severity during FY23 allowing its expected operating rig count to drive increased revenue and earnings for the year," Mitchell said.

Last month, Mitchell reported March quarter revenue of $54.5 million, including a record $20.2 million for the month of March.

March quarter EBITDA was $8.6 million, while operating cashflow was $6.1 million.

Mitchell shares closed at 34.5c yesterday, valuing the company at $77.6 million.