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IMDEX reports revenue & earnings record as industry seeks productivity gains

19/02/2024

Leading global mining-tech company IMDEX has reported record revenue and earnings for the first half of 2024, as the mining and exploration sectors search for technologies that deliver productivity gains in order to meet the emerging challenges of the industry.

A robust contribution from Devico – acquired by IMDEX last year – helped to deliver record revenue of $235.3m, up 18.4 per cent on the same time last year, enabling IMDEX to maintain a strong performance in challenging industry conditions.

The group also welcomed the continued growth of drilling analytics software company Krux Analytics and geoscience image analysis experts Datarock in which IMDEX has strategic investments.

IMDEX is seeing increased demand for its innovative solutions, integrated products, and ore body knowledge and directional drilling expertise, all aimed at optimising efficiency and productivity.

Excluding the Devico contribution, IMDEX revenue was in line with the same time last year.

Normalised EBITDA of $71m was up 13 per cent on the same time last year and Normalised Net Profit After Tax and before acquired intangible Amortisation was $32.8m, a 7.6% increase on the same time last year.

Net debt is at $45.7m, an improvement of $19.2m from $64.9m at 30 June 2023 following accelerated debt repayment.

IMDEX Chief Executive Officer Paul House said the overall results were more significant against a backdrop of a global downturn in exploration activity.

It was further validation of the company’s business model, core strength and disciplined approach.

“Against a challenging backdrop, our revenue growth of 18%, bolstered by a $36.1 million contribution from Devico for the half, is an excellent result,” Mr House said.

“Our normalised EBITDA margin of 30% was up half-on-half and highlights the strength of our core business, our resilient earnings profile and our ability to perform in all market conditions.

“We are particularly well-placed to respond to the mining industry’s need for improved productivity and efficiency – which is magnified in a high-cost environment.

“The industry faces twin challenges – a rising cost environment and greater geological complexity, both of which present hurdles to the looming supply demand gap for the majority of minerals.

“New technologies that simultaneously deliver greater orebody intelligence in real time, and lift overall industry productivity, are increasingly sought to bridge that gap.

“These challenges have been well signalled, and IMDEX has been methodically developing the capability, partnerships and the products to meet these challenges head on.

“Despite the near-term noise within the industry and the broader economic macros, the positive medium to longer term fundamentals are unchanged, and at IMDEX we are excited about what lies ahead.

“Growth opportunities are starting to appear as majors take advantage of lower activities by juniors and conversations increasingly turn from focusing on cost-out towards focusing on productivity improvements.

“With the integration of Devico and investments in Datarock and Krux, IMDEX is in its strongest position to leverage the robust long-term industry fundamentals through its unique competitive position created from its global presence and product portfolio.

“Datarock reported significant revenue growth and doubled their meters processed in the first half and conducted 23 trials compared to just five in the same period in 2023.

“Krux experienced a twofold revenue increase in 1H24 and successfully secured several global contracts with major resource companies, and drillers, leveraging IMDEX's network.

“IMDEX has a clear objective to outperform industry growth through technology leadership, solution selling and field services while pursuing growth through its IMDEX Mining Technologies and digital unit.”

There was a 17 per cent increase in Devico directional drilling revenue in the first half, with new projects and trials in the United States, Africa, and Australia - the first directional drilling contract within the Australian market.

Devico continued to perform above expectations, despite softer Canadian and Australian markets.

In other regions, there was robust revenue growth in the Americas (up 31% increase), which now accounts for 50% of total revenue, up from 45% on the same time last year; the Asia Pacific was in line with 1H23 but growth was limited because of a contraction in the Australian market; and revenue in Africa and Europe increased 19%.

Net Profit After Tax was $16.8 million, a 26% reduction on the same time last year.

BLASTDOG™ commercial prototype trials are ongoing, with multiple sites converting to purchase orders in the first half and early second half of 2024.

The company declared an interim fully franked dividend of 1.5cps representing a 26% NPAT payout ratio on normalised earnings.

Mr House said the underlying long-term drivers for the industry remain strong, with a fundamental need for resource companies to replace diminishing reserves; new discoveries likely to be under cover, at depth and more complex in structure, resulting in larger drilling campaigns and more complex processing; and the global commitment towards net zero emissions and the resultant demand for critical metals or the continued extraction of reserves outstripping their replacement.

Other strategic highlights

  • Completed Devico operational integration
  • DeviGyro sensor rentals within IMDEX network up 45% since completion
  • Average sensor revenue per unit up 5% excluding Devico
  • Top 250 customers with >3 products 41%, up from 37%
  • Number of IMDEX HUB-IQ™ connected customers up 8%