Dynamic hits new earnings peak on rising demand from busy miners

Dynamic Group’s revenue for FY2022 has rocketed up 218% to a record $74.1m thanks to highly favourable market conditions and its acquisition of Orlando Drilling.

The good news doesn’t end there, though, with earnings before interest, taxes, depreciation, and amortisation rising 240% to $17.1m, while normalised net profit after tax (excluding one-off costs relating to the acquisition of Orlando) jumped 381% over the previous financial year to $9.2m.

Dynamic Group Holdings (ASX:DDB) also closed out the financial year with $9.5m in cash, up from $8.75m at the end of FY2021.

Non-executive chairman Garret Dixon said the outstanding result marked the second straight year since it listed in 2020 that it has delivered year-on-year growth in revenue and earnings.

In FY2021, the company had reported a 47.9% increase in revenue to $22.5m and a 277.1% increase in net profit after tax to $1.64m.

Positioned for growth

“Our strategic acquisition of exploration drilling company Orlando Drilling has contributed to our growth and it is important to note we have not included any contribution from the acquisition of the water drilling business Welldrill, which closed after the end of the financial year,” Dixon added.

“On that basis the outlook for the business is very strong. We have a solid balance sheet with good levels of cash and a young fleet of equipment.

“The markets we are operating in have experienced strong growth, and we see ongoing solid demand for all commodities.

“We now have an integrated offering across water drilling, exploration drilling and production drilling so we are well placed to leverage the buoyant market conditions.”

Dynamic had noted last month that the acquisition of Welldrill, which has a tier 1 client base that includes BHP, the Department of Water and Environmental Regulation and OZ Mineral, could increase revenues by between $26m and $28m as well as EBITDA by $7m to $8m in FY2023.

This is thanks to having a fleet of 47 rigs with more than 300 personnel servicing 17 active projects across a range of commodities.

Operational performance

Over the past 12 months, the company’s Drill and Blast division completed key milestones on multiple projects, purchased four rigs to meet ongoing demand and invested in ancillary equipment to reduce rental requirements.

Multiple short-term projects were undertaken, while long term projects are continuing, servicing its core group of tier one clients operating in the gold and lithium sector.

Exploration Drilling (Orlando Drilling) also experienced strong demand across long and short-term projects, necessitating the purchase of an additional rig and equipment to service key focus areas across a diverse mix of commodities including gold, lithium, nickel and copper.

This article was developed in collaboration with Dynamic Group Holdings, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.