IMDEX LIMITED - Interim / Quarterly Report 2011

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21 February 2011

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Company Announcements O f fice ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2001

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Dear Sir/Madam

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RESULTS ANNOUNCEMENT, APPENDIX 4D AND FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

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Please find attached a st a tement by the Chairman and Managing D irector of Imdex Limited regarding the Gro u p’s financial results and operating perform a nce for the half year ended 31 December 2 010.

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The Appendix 4D and H alf Yearly Financial Report for the half year ended 31 December 2010 follow this announcement.

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Yours faithfully Imdex Limited

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Paul Evans

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Company Secretary

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21 February 2011

RECORD HALF YEAR EARNINGS RESUMPTION OF DIVIDEND CONTINUING POSITIVE OUTLOOK

Imdex Limited (ASX: IMD) today announced a record result for the half year ended 31 December 2010 (1H11):

Key 1H11 financial highlights:

Revenue from continuing operations (excluding interest revenue) up 64% to $95.9 million (1H10: $58.4 million; 2H10: $75.9 million), a significant uplift on the previous record half of $80.3 million for 1H09;
• EBITA from continuing operations excluding non-operational items up 182% to $21.2 million (1H10: $7.5 million; 2H10: $13.2 million);
• Normalised net profit after tax from continuing operations (excluding non-operational items and impairment charges) up significantly to $12.1 million (1H10: $2.9 million; 2H10; $6.9 million);
• Declaration of a 1.75 cents per share fully franked interim dividend; • Net assets of $109.7 million (30 June 2010 – $94.5 million) which includes organic growth in the business and the acquisition of Fluidstar;
• Cash flow from operating activities up 202% to $13.9 million (1H10: $4.6 million; 2H10: $1.1 million); and
• Maintained conservative gearing (net debt / capital) at 18.4% (FY10 – 19.6%) even after the acquisition of Fluidstar.

Commenting on the 1H11 results, Imdex’s Managing Director Bernie Ridgeway said, “This record half yearly result shows that our strategy of continuing to invest through the Global Financial Crisis (GFC) has successfully positioned us to capitalise on the improved industry dynamics.”

“Consecutive increases in revenue and EBITA have been achieved for each of the past 3 half years since the low point of the GFC in 2H09.”

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“The record results in 1H11 reflect increased exploration spend globally as well as increased market share gained through the release of new market leading technologies, the simplification of our brand strategy, and the realignment of our business units by region,” he said.

“Imdex’s commitment to its core strategy of supplying quality drilling fluids and leading down hole instrumentation to two main end markets, being mining and oil & gas and expenditure on research and product development through the GFC has proven to be successful. We now look forward to expanding Imdex’s business through the proposed acquisition of MudData in Germany, the new oil & gas global services joint venture with DHSO in Dubai and organic growth strategies,” Mr. Ridgeway said.

MINERALS DIVISION

The Minerals Divisions comprises ‘AMC Minerals’ branded fluids and ‘Reflex’ branded down hole instrumentation, and is aimed primarily at the mining and mineral exploration markets and operates across Asia Pacific, Europe, Africa and the Americas.

Financial performance

In 1H11, Minerals Division revenue was up 75% to $81.5 million (1H10: $46.4 million; 2H10: $64.7 million). This represents 85% of the company’s total revenue for the first half.

Key operational highlights and achievements

Fluidstar was acquired effective 1 September 2010 for $12.4 million and has contributed strongly to the first half performance and cash flow. Integration has been seamless and we look forward to further growth as part of the AMC brand;
Record mining tool fleet numbers were achieved with rental levels surpassing the previous peak achieved in July 2008 by 33% at the end of January, 2011. The Group expects further increases through 2H11;
The Reflex brand of down hole instrumentation continues to be the market leader for the global mining and exploration industry;

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The solids control technology is commercial and at the early stages of market introduction. This is new technology for the global mining and exploration industry and won the WA Innovator of the Year in 2010;
Continued investment in engineering and product development to maintain Imdex’s position as a leader and innovator in quality drilling fluids and advanced down hole instrumentation technology; and
Cross selling benefits have been gained in the current half through the restructuring of the Imdex business along regional lines.

OIL & GAS DIVISION

The Oil & Gas Division comprises ‘AMC Oil & Gas’ branded drilling, completion and production fluids and ‘Flexit’ branded down hole instrumentation. This Division is aimed primarily at the oil & gas, geothermal and coal bed methane industries.

Financial performance

In 1H11, Oil & Gas Division revenues were up 21% to $14.4 million (1H10: $11.9 million; 2H10: $11.1 million) which represented 15% of the Group’s first half revenue.

As announced to the ASX on 21 January, 2011 Imdex has agreed to the formation of a 50:50 joint venture with DHS Oil Holdings Pty Ltd (DHSO), majority owned by Lime Rock, based in Dubai. DHSO already operates the Flexit technology and the global joint venture should allow Flexit to gain a better and more sustainable return. The joint venture with DHSO will be operative in 3Q11 and should contribute meaningfully to revenue and profits from FY12.

As announced to the ASX on 17 December 2010, Imdex entered into a heads of agreement to acquire 100% of the issued share capital of Mud-Data GmbH and Mud-Data-Rom S.R.L. (Mud-Data). Mud-Data is a drilling fluids and equipment supplier primarily based in Germany. Completion is expected in 3Q11 and Mud-Data should be a significant contributor to revenue and profits from FY12.

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Key operational highlights and achievements

Continued improvements in existing down hole instrumentation;
Product development testing of the Drop version of the Target INS tool with commercial units expected to be delivered in mid 2011;
The AMC Oil & Gas brand continues to grow in niche South East Asian markets and onshore Australia/PNG;
Mud-Data acquisition will strengthen our presence in Europe; and
Continued investment in engineering and product development to maintain an active technology pipeline.

Dividends

The Directors are pleased to announce a 1.75 cents per share fully franked interim dividend for the current half. The entitlement date is set at 11 March 2011 with payment to be made on 25 March 2011. This decision reinforces the Board’s commitment to the payment of a growing dividend stream while balancing the capital needs of the business as it continues to grow.

Exciting outlook for 2H11

Commenting on the outlook for the second half of the year, Mr. Ridgeway said “Our record first half trading conditions have continued early in the second half. Growth opportunities provided by the proposed acquisition of Mud-Data, the formation of the oil & gas down hole instrumentation services joint venture with DHSO, the introduction of commercialised solids control technology and other organic growth opportunities, means the outlook for Imdex in 2H11 and beyond is exciting.”

A leading research house is predicting global mineral exploration spend levels for 2011 to be 20% above 2010 with similar trends anticipated in oil & gas exploration spending. This is supported by major, intermediate and small drilling companies who are reporting increased drilling rig utilisation levels.

“Increased exploration spending driven by the underlying demand for commodities is supporting the continued growth of Imdex,” Mr. Ridgeway said.

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Focus areas for 2H11

In 2H11 the Imdex Group plans to focus on:

Completion of the Mud-Data acquisition in Germany and expanding the capability of the business;
Participating in the new DHSO oil & gas down hole instrumentation services Joint Venture based in Dubai;
Manufacture and rental of the solids control technology, initially for the Asia/Pacific market before moving to the other major mining markets of Africa, Canada and Latin America;
Continuing to expand the global operations servicing the mining and exploration industries;
Expanding the drilling fluids, production and completion chemicals in niche oil & gas markets;
Continuing research and product development; and
Further bolt on acquisitions.

Ross Kelly AM Imdex Limited, Chairman

For further information , please contact:

Bernie Ridgeway, Managing Director Ross Kelly AM, Chairman

Paul Evans, Chief Financial Officer and Company Secretary Ph: +61 8 9445 4010 Email: [email protected] www.imdexlimited.com

About Imdex

Imdex is a Perth based, ASX listed company providing drilling fluids and leading down hole instrumentation to drilling, exploration and production companies within the resources and energy industries worldwide. The company has streamlined its business into two clearly defined and distinct operational divisions; the Minerals Division and the Oil and Gas Division. The group has a presence in all significant mining and exploration regions and has the global resources to position itself for long-term growth.

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Imdex Limited Summary Financial Highlights for the Half Year Ended 31 December 2010

(Results Reviewed by Auditors)

	Consolidated	Consolidated	Consolidated
	1H10 $’000	2H10 $’000	1H11 $’000

Revenue(incl interest income)	58,704 76,921 95,989
Operating Profit before Interest, Tax, Depreciation and Amortisation Depreciation	9,443 15,450 23,792 (1,935) (2,247) (2,637)
Earnings before Interest, Tax & Amortisation(EBITA)	7,508 13,203 21,155
EBITA margin Amortisation Net interest (expense) / benefit Income tax expense	13% 17% 22% (3,089) (3,274) (3,430) (820) 49 (1,296) (746) (3,035) (4,349)
Operating Profit after Tax before non-operational items	2,853 6,943 12,080
Non-operational items SGE impairment Goodwill and intangible impairment Foreign exchange (loss) / gain on the revaluation of SGE loan Tax effect of non-operational items	(4,902) (5,538) - (23,531) - - (721) 44 - 1,687 1,617 -
Net(loss) /profit after tax for the Half Year	(24,614) 3,066 12,080
Basic(loss) / earnings per share(cents)	(12.63 ¢) 1.58 ¢ 6.17 ¢
Net Cashprovided by Operating Activities	4,587 1,113 13,857
Gearing (Net Debt / Net Debt + Equity)	20.5% 19.6% 18.4%
Net Assets	90,534 94,495 109,661
Net Tangible Assetsper Share(cents)	19.15 ¢ 22.83 ¢ 27.75 ¢

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AI assistant

IMDEX LIMITED Interim / Quarterly Report 2011

65119_rns_2011-02-20_adfcdc47-66b8-43a4-9691-a81de4ab505a.pdf

RESULTS ANNOUNCEMENT, APPENDIX 4D AND FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

21 February 2011

RECORD HALF YEAR EARNINGS RESUMPTION OF DIVIDEND CONTINUING POSITIVE OUTLOOK

Key 1H11 financial highlights:

MINERALS DIVISION

Financial performance

Key operational highlights and achievements

OIL & GAS DIVISION

Financial performance

Key operational highlights and achievements

Dividends

Exciting outlook for 2H11

Focus areas for 2H11

For further information , please contact:

About Imdex

Imdex Limited Summary Financial Highlights for the Half Year Ended 31 December 2010

(Results Reviewed by Auditors)

AI assistant

IMDEX LIMITED — Interim / Quarterly Report 2011

65119_rns_2011-02-20_adfcdc47-66b8-43a4-9691-a81de4ab505a.pdf

RESULTS ANNOUNCEMENT, APPENDIX 4D AND FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

21 February 2011

RECORD HALF YEAR EARNINGS RESUMPTION OF DIVIDEND CONTINUING POSITIVE OUTLOOK

Key 1H11 financial highlights:

MINERALS DIVISION

Financial performance

Key operational highlights and achievements

OIL & GAS DIVISION

Financial performance

Key operational highlights and achievements

Dividends

Exciting outlook for 2H11

Focus areas for 2H11

For further information , please contact:

About Imdex

Imdex Limited Summary Financial Highlights for the Half Year Ended 31 December 2010

(Results Reviewed by Auditors)

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IMDEX LIMITED Interim / Quarterly Report 2011