Contract mining and drilling major Perenti says its A$410 million acquisition of DDH1 is set to add 10-13% to its FY24 revenues and boost underlying earnings for the full year.
The circa-A$1 billion Australian Securities Exchange-listed company announced its tilt at DDH1 in the middle of this year and now has former DDH1 boss Sy Van Dyk heading its expanded drilling services arm. The division includes Perenti’s legacy Ausdrill brand, DDH1, Ranger Drilling, Strike Drilling and the Swick underground-drilling-focused business DDH1 bought for A$115 million in 2021.
Perenti has set FY24 revenue at A$3.3-3.4 billion versus $3 billion previously; underlying EBIT at $310-325 million, compared with $260-275 million before; and net capital expenditure at $365m ($330m).
Perenti says the combined group expects to deliver “strong operational performance and earnings which will continue to strengthen our balance sheet and generate cash” over the balance of the year to June 30, 2024, with leverage at the end of the period forecast to come down to 0.7-0.8x versus previous guidance of 0.8-0.9x.
“Perenti’s leverage at 31 December 2023 will be above the full year guidance range due to the timing of the DDH1 transaction and the associated payment of $50 million of cash consideration, together with the timing of capital expenditure,” Perenti said.
It maintained its track record on debt maintenance during a period of strong inorganic and organic growth since 2018 had been sound.
“Since FY18, the financial year prior to [Ausdrill’s] acquisition of Barminco, the business has delivered EBIT(A) growth at a CAGR of 21%1, whist reducing leverage by 50%,” the company said.
CEO Mark Norwell said mineral drill rig utilisation rates were “comfortably above long-term averages”.
