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EANS-News: C.A.T. oil AG
C.A.T. oil significantly benefits from efficiency
optimizations in first nine months of 2010
- EBITDA-margin of 25.0% at an impressive level for 9M - EBITDA up 8.3% YoY to EUR 43.5 million and net profit up 36.2% to EUR 16.2 million for 9M - Q3 revenues up 10.2% to EUR 65.4 million; 9M revenues down 1.7% to EUR 173.8 million - Objectives for Full Year 2010 confirmed
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quarterly report/Q3 2010 results
Subtitle: - EBITDA-margin of 25.0% at an impressive level for 9M - EBITDA up 8.3% YoY to EUR 43.5 million and net profit up 36.2% to EUR 16.2 million for 9M - Q3 revenues up 10.2% to EUR 65.4 million; 9M revenues down 1.7% to EUR 173.8 million - Objectives for Full Year 2010 confirmed
Wien (euro adhoc) - 29 November 2010 - C.A.T. oil AG (O2C, ISIN: AT0000A00Y78), one of the leading providers of oil and gas field services in Russia and Kazakhstan, today announced its results for the first nine months of 2010. C.A.T. oil was able to benefit from the further improved macroeconomic conditions and the increasing demand for oil. In the third quarter the Company´s capacity utilization was at a high level and the job count reached a new third quarter high of 846 jobs. As a result of the ongoing efforts to streamline operations, C.A.T. oil further improved its profitability and earnings over the first nine months of 2010 with the EBITDA-margin increasing to 25.0% and EBITDA rising 8.3% YoY to EUR 43.5 million.
Manfred Kastner, CEO of C.A.T. oil, commented: "Our results for the first nine months demonstrate that our strategy to focus on higher margin services and to streamline our operations is effective: We have significantly improved our EBITDA-margin to a very profitable level of 25.0%. We are also very pleased to announce that these measures have had a significant impact on earnings with our net income up by more than one third at EUR 16.2 million."
He continued: "Our successful optimization efforts and the improved market conditions have put C.A.T oil in a strong position to take first steps towards targeting additional growth. Having successfully established sidetrack drilling as a second core business over the past years, we are excited about the opportunity to expand into the strongly growing conventional drilling. This step will tie in with the overall strategy of the business, as we leverage our profound experience to diversify into Greenfield Services. This will further strengthen our position, unlock additional cross-selling potential and set the basis for additional growth."
Strong revenue boost in third quarter with nine month revenues slightly below prior year period
During the third quarter revenues went up by 10.2% YoY to EUR 65.4 million (Q3 2009: EUR 59.3 million), primarily reflecting the growth in demand for oil and higher utilization levels in the Company´s hydraulic fracturing and sidetrack drilling services as well as local currency appreciation during the third quarter. This strong revenue performance was, however, not able to fully offset the weaker revenues in the first half of the year: On a nine month view, revenues slightly declined by 1.7% YoY to EUR 173.8 million (Q1-Q3 2009: EUR 176.9 million) reflecting the following key factors: the slower operations in Q1 due to the abnormal weather conditions, the outsourcing of auxiliary workover services, the reduction in seismic activities and the trend towards day rate contracts in sidetrack drilling.
The total job count for Q3 amounted to 846 jobs (Q3 2009: 827 jobs) which represents a new third quarter high. On a nine month basis the job count amounted to 2,255 (Q1-Q3 2009: 2,352 jobs). The average revenue per job improved from TEUR 72 in Q3 2009 to TEUR 77 in Q3 2010.
Lean cost base and optimized portfolio mix form solid basis for additional growth
The Company´s cost of goods sold slightly declined to EUR 140.7 million on a nine month view (Q1-Q3 2009: EUR 143.6 million) reflecting the continuous focus on cost management, ongoing process optimizations and a reduction in material costs. In the third quarter cost of sales increased by 21.2% to EUR 51.5 million (Q3 2009: EUR 42.5 million). This development was mainly impacted by three factors: higher depreciation, the Rouble appreciation against the Euro and the increasing service orders in more remote and isolated areas that resulted in higher subcontractor costs and, therefore, higher direct costs. In addition, the increase also reflected the reversal of a reclassification of EUR 6.8 million of seismic-related losses, which we reclassified into direct costs in Q3 2009. Net of this effect, the costs of goods sold merely increased by 4.4% YoY.
Margin development reflects efficiency improvements over the first 9 months of 2010
C.A.T. oil´s optimization efforts are also reflected in the Company´s earnings development: Despite a slight decline in EBITDA (earnings before interest corporate tax depreciation and amortization) for the third quarter to EUR 16.6 million (Q3 2009: EUR 17.7 million), EBITDA for the first nine months of 2010 increased by 8.3% YoY to EUR 43.5 million (Q1-Q3 2009: EUR 40.1 million). The EBITDA margin grew to 25.0% (Q1-Q3 2009: 22.7%), whilst the Q3 2010 EBITDA margin came in at 25.4% (Q3 2009: 29.8%). C.A.T. oil´s earnings before interest and corporate tax (EBIT) rose 6.4% YoY to EUR 21.6 million during the first nine months of the year (Q1-Q3 2009: EUR 20.3 million) with the EBIT margin rising to 12.5% (Q1-Q3 2009: 11.5%). For Q3 2010, EBIT was at EUR 9.3 million (Q3 2009: EUR 11.4 million) with the EBIT margin of 14.2% (Q3 2009: 19.3%).
Pre-tax profit was up 37.9% YoY to EUR 22.7 million (Q1-Q3 2009: EUR 16.5 million) and net financial result rose to EUR 1.1 million from a negative EUR 3.9 million in Q1-Q3 2009. C.A.T. oil´s net income increased 36.2% YoY to EUR 16.2 million (Q1-Q3 2009: EUR 11.9 million). This translates into earnings per share of EUR 0.332 compared to EUR 0.244 per share for the prior year period. On a Q3 basis, pre-tax profit was EUR 9.0 million (Q3 2009: EUR 11.0 million), net financial result improved 44.8% to EUR 0.3 million (Q3 2009: EUR 0.5 million). The Group´s net income was at EUR 7.7 million (Q3 2009: EUR 9.2 million) and earnings per share amounted to EUR 0.158 (Q3 2009: EUR 0.187).
Maintained conservative financial strategy with increase in operating cash flow
C.A.T. oil´s working capital as of 30 September 2010 amounted to EUR 42.1 million (31 December 2009: EUR 45.2 million) and provided sufficient liquidity to the Company´s operations. Cash flow from operating activities increased 17.1% YoY to EUR 45.0 million for the first nine months of 2010 (Q1-Q3 2009: EUR 38.4 million). For the third quarter, cash flow from operating activities amounted to EUR 11.5 million (Q3 2009: EUR 16.1 million) due to an increase in working capital of EUR 7.8 million. The Company´s proceeds from the sale of equipment amounted to EUR 4.1 million during the first nine months of 2010, primarily reflecting the proceeds from the disposal of workover capacity. As a result, cash flow from investing activities amounted to a net outflow of EUR 24.8 million (Q1-Q3 2009: net outflow of EUR 5.8 million) and EUR 15.8 million for Q3 2010 (Q3 2009: inflow of EUR 0.4 million). Cash flow from financing activities was a net outflow of EUR 12.9 million (Q1-Q3 2009: net outflow of EUR 28.2 million) and a EUR 9.1 million outflow for Q3 2010 (Q3 2009: net outflow of 12.3 million).
Cash and cash equivalents amounted to EUR 36.4 million as of 30 September 2010 increasing 25.2% over EUR 29.1 million on 31. December 2009. In line with its conservative financial strategy, C.A.T. oil sustained a strong balance sheet with an equity ratio of 81.7% as of 30 September 2010 (30 September 2009: 84.6%).
Expansion into high margin Conventional Drilling further diversifies service portfolio
Backed by the ongoing economic recovery, the stronger demand for oil and quality drilling and fracturing services, C.A.T. oil took the decision in Q3 to expand its 2010 capital expenditures program from EUR 15 million to EUR 35 million.
In addition, in November the supervisory board approved the Company´s 2011 / 2012 investment program of EUR 150 million, which is mainly targeted at establishing the high margin conventional drilling service as a third core business of the Company. With annual growth rates of about 10%, the Russian conventional drilling market represents very attractive opportunities for C.A.T. oil. The Company will hereby capitalize on its profound experience to date and its strong market position when diversifying into Greenfield services. The Company has ordered and partly pre-paid nine state-of-the-art North American drilling rigs, which will be delivered from H2 2011 and successively put in operation at the beginning of 2012. A large proportion of the investment program will be funded from the Company´s operating cash flow whilst the rest will be financed through long-term debt. After an initial installation period and related upfront costs, the investments are expected to make a material contribution to the Company´s earnings from 2012 onwards.
A smaller portion of the 2011 / 2012 investment program will be used to overhaul and reinforce the Company´s existing sidetracking businesses by installing two new sidetrack drilling rigs in Q1 2011.
Outlook for Financial Year 2010 confirmed
Based on the nine month results, C.A.T. oil confirms its objectives for the Full Year 2010: The Company expects revenues of between EUR 215 million to EUR 225 million. Due to the significant Rouble appreciation against the Euro in the third quarter, C.A.T. oil has adjusted the calculation basis for its revenue target increasing the Rouble/Euro exchange rate from 39 to 41. As a result, the management expects revenues to come in at the lower end of this spectrum. Furthermore, the Company confirms that its earnings for the Full Year 2010 will exceed the level of 2009 and margins will remain on a high level.
Press contact: Financial Dynamics GmbH
About C.A.T. oil AG:
C.A.T. oil AG is one of the leading providers of oil and gas field services in Russia and Kazakhstan and is listed on the Frankfurt Stock Exchange (SDAX). C.A.T. oil offers a wide spectrum of services to increase the lifecycle of an oil field or to make abandoned oil fields accessible. The Company´s growth is driven by three significant factors: Existing oil fields need to be stimulated due to shrinking oil and gas resources in order to optimize capacities. Simultaneously, idle wells are reactivated or made accessible through new methods in order to deploy wells to their maximum. Additionally C.A.T. oil offers seismic services which help to identify new oil and gas sources.
Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built up a leading hydraulic fracturing services business in Russia and Kazakhstan. Following its IPO in 2006 the Company has invested more than EUR 200 million in additional services and capacities: sidetrack drilling has become the Company´s second core business. Apart from the services mentioned above, C.A.T. oil´s diversified service portfolio includes coiled tubing, formation evaluation services, well work-over, cementing and seismic services. Due to the recent expansion investments C.A.T. oil´s fleets and rigs are state-of-the-art and therefore allow for time-efficient and effective deployment. C.A.T. oil´s customer base includes the leading Russian and Kazakh oil and gas producers amongst them Gazprom, KazMunaiGaz, LUKOIL, Rosneft and TNK-BP. C.A.T. oil has a long-standing relationship with these customers and has been a reliable service provider since its market entrance in the early nineties.
The Company has its headquarters in Vienna and employed an average of 2,427 people on 30 September 2010, most of whom are based in Russia and Kazakhstan.
Key financial figures for the first nine months of 2010
@@start.t2@@[in million EUR] 9M 2010 9M 2009 Change in %
Revenues 173.8 176.9 -1.7
Cost of sales 140.7 143.6 -2.0
Gross profit 33.1 33.3 -0.4
EBITDA 43.5 40.1 8.3
EBITDA margin (in%) 25.0 22.7
EBIT 21.6 20.3 6.4
EBIT margin (in%) 12.5 11.5
Net result for period 16.2 11.9 36.2
Earnings per share (in EUR) 0.332 0.244 36.1
Equity Ratio (in %) 81.7 84.6
Cash flow from operating activities 45.0 38.4 17.1
Cash flow from investing activities -24.8 -5.8 > 100
Cash flow from financing activities -12.9 -28.2 -54.2
Cash and cash equivalents1 36.4 29.1 25.2
Total job count 2,255 2,352 -4.1
Per-job revenue (in thou. EUR) 77 75 2.5
Employees 2,427 3,024 -19.7
1) As of 30 September 20101 and 31 December 2009 respectively@@end@@
Key financial figures for the third quarter 2010
@@start.t3@@[in million EUR] Q3 2010 Q3 2009 Change in %
Revenues 65.4 59.3 10.2
Cost of sales 51.5 42.5 21.3
Gross profit 13.9 16.9 -17.8
EBITDA 16.6 17.7 -6.1
EBITDA margin (in%) 25.4 29.8
EBIT 9.3 11.4 -19.0
EBIT margin (in%) 14.2 19.3
Net result for period 7.7 9.2 -15.7
Earnings per share (in EUR) 0.158 0.187 -15.5
Cash flow from operating activities 11.5 16.1 -28.5
Cash flow from investing activities -15.8 0.4 > 100
Cash flow from financing activities -9.1 -12.4 -26.6
Total job count 846 827 2.3
Per-job revenue (in thou. EUR) 77 72 7.7@@end@@
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Further inquiry note: Lucie Maucher Tel.: +49 (69) 920 37-183 E-Mail: firstname.lastname@example.org
Branche: Oil & Gas - Upstream activities
Index: SDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard