Imdex upbeat on second half after profit drop

Drilling fluids and services firm Imdex has reported a 27 per cent drop in half year net profit, a result it says reflects challenging market conditions in the minerals sector.

Imdex today announced a first half net profit of $16.6 million, down from $22.7 million the previous corresponding half year.

Statutory revenue was down 8 per cent to $127.6 million, the company said.

Managing director Bernie Ridgeway said the decline in EBITDA could be attributed a cyclical slowdown in the higher-margin minerals sector.

“We are pleased to note, however, gross margins were maintained throughout the first half and there are early signs that activity levels may be starting to increase again,” Mr Ridgeway said in a statement.

Imdex will pay a fully franked interim dividend of 2.5 cents per share.

Mr Ridgeway said despite the fall in profit, the company was well positioned to benefit from an improvement in market conditions.

“We have developed a strong technology based company with a superior product range to support global customers at every stage of their cycle,” Mr Ridgeway said.

“Our strategy of diversifying the business by industry, product, geography and customer is progressing well and the benefits of this are evidenced in this result.”

At close of trade, Imdex shares were down 6.6 per cent, trading at $1.69.