Drilling fluids and equipment supplier Imdex has reported another fall in net profit, after a record half-year performance by its oil and gas division was offset by further contraction in its mining supplies business.
Imdex said its net profit for the six months to December 31 was $15.3 million, down from $16.6 million in the first half of the 2012-13 financial year.
Revenue was down 25 per cent, to $101.9 million, Imdex said.
The company’s oil and gas division generated record revenue of $38.2 million, a 14 per cent rise on the previous corresponding period.
In its minerals division, however, revenue fell 38 per cent, to $63.7 million.
Managing director Bernie Ridgeway said it was pleasing to see the oil and gas division grow, despite the challenging market conditions for Imdex’s minerals business.
“While we cannot change the market conditions, continuing investment in our strategies for future growth is strengthening our mining division’s competitive advantage and its ability to yield additional returns from current trading conditions and when any upturn occurs,” Mr Ridgeway said in a statement.
“The cyclical nature of the minerals industry is the key motivator behind the company’s aggressive product development and diversification strategy.”
Mr Ridgeway said he expected the tough conditions to continue in its minerals division for the remainder of FY2014, with rig utilisation expected to be between 20 and 30 per cent.
He said, however, that there were substantial growth opportunities for Imdex’s oil and gas division, with activity in the energy sector tipped to remain at high levels.
At 11:30AM, WST, Imdex shares were up 13.6 per cent, at 62.5 cents.
