29/01/2009 - 11:23

Imdex calls off acquisition deal

29/01/2009 - 11:23

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Mining services company Imdex is banking on the oil and gas sector to help it through the mining downturn as it calls off an acquisition deal for Australian Drilling Specialities.

Imdex calls off acquisition deal

Mining services company Imdex is banking on the oil and gas sector to help it through the mining downturn as it calls off an acquisition deal for Australian Drilling Specialities.

The company today released preliminary unaudited interim results for the six months to the end of December, with revenue increasing by 16 per cent to $80.3 million.

Earnings before interest, tax, depreciation and amortisation rose 1 per cent $20 million.

Imdex managing director Bernie Ridgeway told WA Business News that he is pleased with the results in light of the significant drop off experienced in December.

He said that drilling rig operators were slower to go back to work as compared to January last year.

"The drilling contractors, being our major customers, are certainly nowhere near as busy as they were say this time last year and that affects our core business in that middle exploration area," Mr Ridgeway said.

However, he expects to see some upside in the oil and gas space where Imdex is supplying more drilling fluids and releasing its line of downhole instrumentation for the sector.

"We've been working now for some time on having a range of instruments for the oil and gas business and by the time we get to the beginning of FY10, we'll be getting some serious traction for that suite of tools in that industry," he said.

The oil and gas sector had been less affected by the global financial crisis as compared to the mining sector, he added.

Meantime, Imdex has terminated a heads of agreement to acquire Australian Drilling Specialities after the deal became too expensive.

Mr Ridgeway said Imdex was using June 30 2008 figures for the deal when ADS was reporting peak earnings.

He said the company is not looking at other acquisitions at this time.

Additionally Imdex has made a number of moves to maintain the company's financial and operating strength.

The moves include extending bank facilities, deferring employee salary reviews from December 2008 to June 2009 and reviewing staffing levels.

Mr Ridgeway said the company will shed some 13 per cent of its 310-strong global workforce, with job losses in WA to be minimal.

Imdex will also centralise its UK-based manufacturing activities to Australia to reduce costs.

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