Schoeller-Bleckmann Oilfield Equipment AG

euro adhoc: Schoeller-Bleckmann Oilfield Equipment AG
Earnings / Suggested dividend increase of 33 %, continued high level of bookings, profit slightly above preliminary figures.

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16.02.2005

Ternitz/Vienna, February 16, 2005. Schoeller-Bleckmann Oilfield Equipment AG (SBO) listed on the prime market of the Vienna Stock Exchange confirms the preliminary figures for 2004 announced in January. According to the now final figures, group sales were EUR 152.2 mill., 13.4 % above last year’s EUR 134.2 mill. Profit before tax improved to EUR 15.5 mill. (following EUR 9.4 mill.), which is an increase of 65 %. The Executive Board will suggest to the General Meeting to distribute a dividend of 30 cents plus 10 cents per share, in total 40 cents (following 30 cents). Based on the 2004 closing price of 15.81 Euro, this corresponds to a dividend yield of 2.5 %.

"The overall situation for the oilfield service industry took a positive turn last year. SBO used the past low-cycle years to get perfectly prepared for a recovery of the industry. The result generated in 2004 is proof of the fact that SBO made full use of the economic upswing in 2004.", says Gerald Grohmann, SBO’s CEO. Additionally, the satisfying result was achieved although the dollar declined by around 10 %. Adjusted for currency fluctuations, SBO would have generated sales worth EUR 164 mill. (22 % increase) and profit before tax of EUR 19.8 mill. (110 % increase).

Positive overall environment in 2004 The market environment for the oilfield service industry in 2004 was characterized by a strong demand for oil and gas. According to preliminary assessments, global oil consumption rose from 79.7 million barrels per day in 2003 to 82.4 million barrels per day in 2004. The decisive factor was the strong economic growth in the Asian emerging markets, in particular China and India, as well as North America. Fears that the surging oil price could have a dampening effect on the economic development did not materialize.  

The global rig count (an indicator of drilling activities) rose from 2,334 at the end of 2003 to 2,555 at the end of 2004. The market for high-tech directional drilling, SBO’s core business, recovered significantly.

Against the backdrop of this positive market development, SBO recorded improved bookings over 2003 from the first months of 2004 on. The positive development of the industry consolidated in the second quarter and was sustained in the second half of the year. For the full year 2004, bookings were 30 % higher than in 2003. The growth in business was observed in all segments and regions alike.

The high level of bookings was worked off according to plan by additional shifts and extra personnel in compliance with the flexible capacity concept of SBO.

After preparations in 2003 and due to the high demand, SBO founded a fully-owned subsidiary in Monterrey, Mexico in 2004. Schoeller-Bleckmann de Mexico started production in the fourth quarter. The Mexican plant currently supplies the US-subsidiaries of SBO, Knust SBO Ltd and Godwin-SBO L.P. in Houston, Texas. Furthermore, establishment of a service facility was begun in the Rocky Mountains.

As a result of the concentration on the core business, US-subsidiary BAFCO Inc., Pennsylvania, was sold to the management of the company, which lately had generated sales of USD 3.6 million. Closing for the divestment will be completed within short.  

Satisfying development of the SBO share SBO’s share finished the trading year at a closing price of Euro 15.81, reflecting a price increase of some 75% over the full year. The liquidity of the share also grew, as the average daily trading volume of 24,211 shares (double counting) was significantly above the average of 11,638 shares traded in 2003.

Outlook into the first quarter and the business year 2005 Early in the decade, the international oil companies had considerably downsized their drilling activities in view of the weak global economic development. The most recent upswing has triggered an accumulated demand for exploring new oil reservoirs. Industry analysts expect this situation to last over the next years.

Uncertainties arise to SBO from the further development of the euro-dollar exchange rate. A weak dollar is a burden on SBO’s business figures as the company invoices 80 % of its sales in US-dollars; however, 60 % of the costs are incurred in dollars. In the past year, SBO could ease the effects of the weak dollar by cost management and productivity increases.

In their most recent forecasts, international energy agencies (EIA, DOE) assume that in 2005 global oil demand will rise by around 2 million barrels to some 84.4 million barrels per day. Consequently, SBO expects business to develop satisfactorily in 2005 as well.

~
                                                                2004          2003
Sales                                                      152.2         134.2
EBIT                                                         17.6          13.1
EBIT margin (%)                                        11.5            9.8
Profit before tax                                    15.5            9.4
Net income                                                10.8            6.1
Cash-flow from operating activities        28.5          22.2
Investments /tangible assets                  10.0          13.7
Earnings per share                                    0.83          0.47
Dividend per share                                    0.40**        0.30
Headcount*                                                837              800
~
* Reporting date December 31
** suggested

Schoeller-Bleckmann Oilfield Equipment AG is the global market leader in high-precision components for the oilfield service industry. The business focus is on non-magnetic drillstring components for directional drilling. Worldwide, SBO employs a workforce of 837 (December 31, 2003: 800), currently 211 in the company headquarters at Ternitz, Lower Austria, and 435 in North America (including Mexico). The majority shareholder is Berndorf AG.

Financial calendar 2005

March 8, 2005: Annual General Meeting March 14, 2005: Ex-dividend day May 20, 2005: Q1/05 result August 19, 2005:  Q2/05 result November 18, 2005: Q3/05 result

end of announcement                                euro adhoc 16.02.2005 08:10:00
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Further inquiry note: Gerald Grohmann, Chief Executive Officer Schoeller-Bleckmann Oilfield Equipment AG A-2630 Ternitz, Hauptstraße 2 Tel: +43 2630/315 ext. 110, fax: ext. 101 E-Mail: sboe@sbo.co.at

Mick Stempel, Hochegger|Financials Tel.:+43 1/504 69 87 ext. 85 E-Mail: m.stempel@hochegger.com

Branche: Oil & Gas - Upstream activities
ISIN:      AT0000946652
WKN:        94665
Index:    WBI, ATX Prime
Börsen:  Wiener Börse AG / official dealing



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