Reporting Season

Business fundamentals are "excellent": Imdex marks record 1H profit

Mon 07 Feb 22, 11:58am (AEST)
mining technology

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Key Points

  • Imdex delivers a record half-year results amid strong demand for mining technology
  • Inflation, marketing spend and R&D could drive higher costs in the second-half
  • Imdex views strong commodity demand and prices as a long-term driver for growth

Imdex (ASX: IMD) CEO Paul House said the fundamentals underpinning mining and exploration sectors were "excellent" after recording a record first-half FY22 performance. The company's stock rallied 6.4% as the market opened.

The mining-technology company reported a 34.9% increase in revenue to $167.8m and an 80.8% jump in net profit to $24.4m.

The figures came ahead of Bell Potter and Citi net profit forecasts of $24m and well above consensus estimates of $22.6m.

Imdex said that the business experienced strong demand for drilling optimisation fluids, rock knowledge sensors and software, with the Americas and Australian regions operating at or near fully capacity.

Imdex declared a fully franked interim dividend of 1.5 cents per share, up 50% compared to last year. The payout represents a payout of 24% of first-half profits.

The dividend record and payments dates are 10 and 24 March respectively.

Supply chain and inflation snags

Index said that the pace of its growth was tempered by labour restrictions and longer delivery times for rigs and parts.

The company anticipates these challenges to remain in some form for the next 1-2 years.

Looking over at the second-half, Imdex said it expects higher expenses due to the "inflation environment". As well as increased travel and marketing costs as covid restrictions ease.

Morning gains fail to stick

Profit takers have come into play after Imdex shares are down -1.7% at 11:30 am AEDT.

This might reflect a broader risk-off attitude in wake of looming interest rate hikes.

Investors might want to take note if this theme continues as February reporting season ramps up.

2022-02-07 IMDEX Ltd (ASX IMD) Share Price - Market Index

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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