Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Imdex Ltd (ASX:IMD, Financial) reported a record group revenue of $445 million for FY24, an 8% increase despite a 24% decline in exploration drilling activity.
- The integration of Devico was completed ahead of schedule, contributing $70 million in revenue and achieving greater synergies than initially anticipated.
- Normalized EBITDA stood at $131 million, maintaining a stable margin of 29.4%, reflecting disciplined cost management and improved gross margins in sensors and fluids.
- The company declared a final fully franked dividend of $0.013 per share, consistent with its capital management policy targeting a 30% normalized NPAT payout ratio.
- Significant progress was made in sustainability, including a dedicated Sustainability Board Committee and improvements in recyclable and reusable packaging, with over 95% of product packaging now meeting these criteria.
Negative Points
- Exploration activity declined by 24%, impacting overall market conditions and posing challenges for future growth.
- The company recognized a $7.4 million impairment for MAGHAMMER due to global macroeconomic uncertainty and a slowdown in M&A activity within the mining-tech sector.
- Net debt stood at $35 million, although the company is on track for an accelerated paydown of its $120 million debt facility.
- Revenue from Australia and Canada declined by about 15% and 12% respectively, due to market slowdown, partially offset by strong performance in the US and South America.
- The full-time employee count decreased from 851 to 816, reflecting the outcomes of the organizational redesign and cost management efforts.
Q & A Highlights
Q: Can I get a sense as to a split between IMDEX and Devico at the EBITDA level?
A: As we've accelerated the integration effort, we are no longer reliably able to separate Devico. The best indication would be to use the first half EBITDA outcome as a benchmark for guidance. (Paul Evans, CFO)
Q: Can I confirm the ARPU growth of 7%? Does that relate to both IMDEX and Devico?
A: It relates to both. All the sensitive references here include Devico, given that they are now on IMDEX ARPU. (Paul Evans, CFO)
Q: Can you give some color around when the $10 million payment from resolving the global dispute with Boart Longyear would be paid?
A: It has been paid. (Paul Evans, CFO)
Q: What are the outlook expectations into next year regarding cost base and revenue expectations?
A: We do not see any further decline as we go into 1H '25. The business has been through a significant reorganization last year, and we expect that to remain steady. (Paul House, CEO; Paul Evans, CFO)
Q: Can you provide an update on the new coal tool and its reception by customers?
A: The responses are very pleasing. The technology works well, and its commercial value is being recognized by our clients. (Paul House, CEO)
Q: Can you give any additional quantification on the July 1 starting point being below last year?
A: The sensor numbers show a slight decline year on year. We expect the seasonal trending profile of our business to continue into FY25. (Paul Evans, CFO)
Q: Should we expect the 2H GP margin to be a new baseline for the business going forward?
A: On an apples-to-apples basis, the gross margins in our sensors and fluids portfolios have improved and will stay at that improved level. (Paul Evans, CFO; Paul House, CEO)
Q: Could you provide a breakdown of Devico revenue growth driven by tech stack upgrades versus market share gains?
A: More than half of the growth is due to market share gains, with the rest from technology stack upgrades. (Paul House, CEO)
Q: Can you provide some color on conversations with major gold miners given the recent rise in gold prices?
A: We are seeing the end of the cost-out focus and more conversations around productivity, which is positive for us. (Paul House, CEO)
Q: Are there any updates on the current commercial trials for BLAST DOG?
A: The product has moved into commercial activities, with purchase orders being renewed or expanded. We continue to see a positive pipeline of trials. (Paul House, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
