C.A.T. oil AG

EANS-News: C.A.T. oil maintains positive growth momentum in Q3 2011

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quarterly report

Subtitle: •	All-time-high in operating activity levels in Q3 and 9M 2011
•	Revenue increase of 14.3% to EUR 74.7 million in Q3
•	EBITDA up 13.8% yoy to EUR 18.9 million in Q3; strong EBITDA margin of 25.3% 
•	Outlook for FY2011 specified


Vienna, 29 November 2011 (euro adhoc) - 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 third quarter and the first nine
months of 2011. Backed by the continued positive growth momentum of the second
quarter, C.A.T. oil continued the positive trend in Q3, achieved a new record in
job count and increased the average per job revenue. Thus, the Company increased
its Q3 revenues by 14.3% yoy to EUR 74.7 million (Q3 2010: EUR 65.4 million) and
achieved a 20.6% yoy growth in revenues to EUR 209.7 million on a nine month
basis (9M 2010: EUR 173.8 million). The Company increased its EBITDA by 13.8%
yoy to EUR 18.9 million for Q3 (Q3 2010: EUR 16.6 million) and by 5.7% yoy to
EUR 45.9 million for 9M (9M 2010: 43.5 million). Despite the front-loaded costs
related to the business expansion, C.A.T. oil operated on a very profitable
basis: The EBITDA margin amounted to 25.3% for Q3 (Q3 2010: 25.4%) and reached a
respectable level of 21.9% for the first nine months (9M 2010: 25.0%). Based on
the strong performance during the first three quarters, C.A.T. oil specifies its
outlook and sees itself well on track to successfully reach its goals for the
full year 2011.

Manfred Kastner, CEO of C.A.T. oil, commented: "We have worked hard to grow our
business and successfully utilize the positive momentum to push our activity
levels to a new record high for both, Q3 as well as 9M 2011. We are now
approaching the finishing line in successfully reaching our goals for the year."

Manfred Kastner continues: "C.A.T. oil is well known for its efficiency and high
operating standards. We therefore remain absolutely focused on our quality
approach while diversifying into high class conventional drilling. We view
conventional drilling as yet another important growth driver for our business
from 2012 onwards and are currently completing the talks with our customers on
the deployment of our new rigs."

All-time-high in Q3 and 9M activity levels

Thanks to a sustainable growth of demand for its core services, C.A.T. oil
enjoyed an all-time-high in the operating activity levels in Q3 and 9M 2011. The
Company´s Q3 total service job count rose 10.0% yoy to 930 jobs (Q3 2010: 846
jobs), driving the 9M total job count up 14.3% yoy to 2,578 jobs (9M 2010: 2,255
jobs). For 9M 2011, C.A.T. oil expanded its fracturing and sidetrack drilling
operations by 17.9% yoy and 14.7% yoy, respectively. The high operating volumes
compounded by improvements in the average per job revenues significantly
contributed to boost revenues in Q3 and 9M. 

Cost base reflects higher operating activity levels and front-loaded costs for
business expansion 

Cost of sales rose by 19.2% yoy to EUR 61.4 million in Q3 2011 (Q3 2010: EUR
51.5 million) and 26.1% yoy to EUR 177.4 million in 9M 2011 (9M 2010: EUR 140.7
million), reflecting higher operating activity levels, the effects of the
accomplished outsourcing of the workover business, slower sidetrack drilling
operations in Q1 as well as the front-loaded costs for the expansion into high
class conventional drilling. The first conventional drilling rig has already
been in operation since July 2011; seven more new rigs have to date been shipped
to Russia and are currently being cleared at customs or adapted for operations.
By the end of the year all the new rigs will have arrived in Russia and will be
put into operation consecutively.

General and administrative expenses went up 1.4% yoy to EUR 4.7 million in Q3
2011 (Q3 2010: EUR 4.6 million) and 3.7% yoy to EUR 14.3 million in 9M 2011 (9M
2010: EUR 13.8 million) primarily driven by the costs related to the expansion
of the business. The total weighted average headcount decreased by 2.2% yoy to
2,373 employees in 9M 2011 (9M 2010: 2,427 employees) reflecting the headcount
reduction due to the outsourced workover operations; at the same time C.A.T. oil
made new hires for the set up of conventional drilling.

Profitable growth despite substantial investments

Despite the substantial investments in growth and diversification during the
reporting period, C.A.T. oil succeeded to operate on a highly profitable basis.
Earnings before interest, tax and depreciation (EBITDA) increased by 13.8% yoy
to EUR 18.9 million in Q3 2011 (Q3 2010: EUR 16.6 million) and 5.7% yoy to EUR
45.9 million in 9M 2011 (9M 2010: EUR 43.5 million). The Company sustained a
strong EBITDA margin at 25.3% in Q3 2011 (Q3 2010: 25.4%) and achieved a very
respectable EBITDA margin level of 21.9% in 9M 2011 (9M 2010: 25.0%). The
Company´s earnings before interest and tax (EBIT) contracted 6.7% yoy to EUR 8.7
million in Q3 2011 (Q3 2010: EUR 9.3 million) and 14.0% yoy to EUR 18.6 million
in 9M 2011 (9M 2010: EUR 21.6 million) due to higher depreciation expenses
arising from investments in the new operating capacities. Net income was down
25.0% yoy to EUR 5.8 million in Q3 2011 (Q3 2010: EUR 7.7 million) and 22.0% yoy
to EUR 12.6 million in 9M 2011 (9M 2010: EUR 16.2 million) and primarily
reflects an increase in depreciation and foreign currency translation losses on
the inter-company euro-denominated loans which C.A.T. oil AG grants to its
subsidiaries for investment purposes on a long-term basis.

Cash flow reflects business expansion, equity ratio remains strong

In 9M 2011, funds from operations went down 11.2% yoy to EUR 40.4 million (9M
2010: EUR 45.5 million) primarily due to a lower pre-tax profit. Cash flow from
operating activities was a net inflow of EUR 30.1 million (9M 2010: net inflow
of EUR 45.0 million) due to the higher net working capital which was driven by
investments. Capital expenditure rose 186.3% yoy to EUR 83.0 million (9M 2010:
EUR 29.0 million) primarily due to investments in the new rigs. Cash flow from
investing activities was a net outflow of EUR 81.8 million (9M 2010: net outflow
of EUR 24.8 million). Cash flow from financing activities was a net inflow of
EUR 52.3 million in 9M 2011 (9M 2010: net outflow of EUR 12.9 million) mainly
due to an increase in long-term borrowings for investment purposes. 

As of 30 September 2011, cash and cash equivalents amounted to EUR 32.8 million
(31 December 2010: EUR 34.1 million). C.A.T. oil´s equity ratio remained at a
comfortable level of 65.4% as of 30 September 2011 (31 December 2010: 83.2%) 

Outlook for the full year 2011 specified

In Q3, C.A.T. oil obtained new orders and extensions to the existing contracts
from its customers for 2011. Therefore, the Company anticipates that despite the
routine seasonal slowdown in Q4 the operating activity levels will stay at least
at par with Q4 2010 this year. In addition, based upon the positive developments
during the first nine month, C.A.T. oil specifies its outlook for the full year
2011 and expects revenues between EUR 260 million and EUR 270 million (based on
a euro/rouble exchange rate of 41). Despite cost pressures from foreign exchange
rates and the expansion into conventional drilling, C.A.T. oil remains committed
to profitable growth and aims at an EBITDA margin of between 21% and 22% for the
full year 2011.

The Company is currently actively engaged in the 2012 tendering campaign.
Despite the current turbulences on the global capital markets and the economic
uncertainties, the macroeconomic environment in Russia and Kazakhstan is stable
and customers are planning with extended working programs. As a consequence, at
this point in time C.A.T. oil views the incremental service orders for 2012 as
positive. 


www.catoilag.com

Press contact:
FTI Consulting 
Carolin Amann
Phone: +49 (0)69 92037-132
Email: carolin.amann@fticonsulting.com

Thomas M. Krammer
Phone: +49 (0)69 92037-183
Email: thomas.krammer@fticonsulting.com


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 unexploited oil fields accessible. The Company´s growth is
driven by the following 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 will
establish conventional drilling as third core service which allows to activate
completely unexploited 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 250 million in
additional services and capacities: sidetrack drilling has become the Company´s
second core business. In November 2010, the Company introduced a comprehensive
investment program with a volume of EUR 150 million which will mainly be used to
set up conventional drilling as part of the Company´s service portfolio.
Furthermore, C.A.T. oil offers coiled tubing, well work-over, cementing and
seismic services. Due to the recent 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. From January to September 2011, the
Company employed an average of 2,373 people, most of which are based in Russia
and Kazakhstan. 
 

Key financial figures for 9M 2011
[million EUR]

                             9M 2011    9M 2010    Change in %
Revenues                      209.7      173.8       20.6
Cost of sales                 177.4      140.7       26.1
Gross profit                   32.3       33.1       -2.6
EBITDA                         45.9       43.5        5.7
EBITDA margin (%)              21.9       25.0    
EBIT                           18.6       21.6      -14.0
EBIT margin (%)                 8.9       12.5    
Net income                     12.6       16.2      -22.0
Earnings per share (EUR)      0.259      0.332      -22.0
Equity Ratio (%) (1)           65.4       83.2    
                        
Cash flow from
operating activities           30.1       45.0      -33.0
Cash flow from
investing activities          -81.8      -24.8       >100
Cash flow from
financing activities           52.3      -12.9       >100
Cash and cash equivalents (1)  32.8       34.1       -3.8
                        
Total job count               2,578      2,255       14.3
Per-job revenue (thou. EUR)    81.0       76.0        6.3
Employees                     2,373      2,427       -2.2


(1) As of 30 September 2011 and 31 December 2010 respectively 


Key financial figures for Q3 2011
[million EUR]

                             Q3 2011    Q3 2010    Change in %
Revenues                       74.7       65.4       14.3
Cost of sales                  61.4       51.5       19.2
Gross profit                   13.3       13.9       -4.0
EBITDA                         18.9       16.6       13.8
EBITDA margin (%)              25.3       25.4    
EBIT                            8.7        9.3       -6.7
EBIT margin (%)                11.6       14.2    
Net income                      5.8        7.7      -25.0
Earnings per share (EUR)      0.118      0.158      -25.0
                        
Cash flow from
operating activities           14.1       11.5       21.9
Cash flow from
investing activities          -38.4      -15.8       >100
Cash flow from
financing activities           34.7       -9.0       >100
                        
Total job count                 930        846       10.0

Per-job revenue (thou. EUR)    80.0       77.0        4.0


Further inquiry note:
Thomas Krammer
Tel: +49(0)69-92037-183
Email: thomas.krammer@fticonsulting.com

end of announcement                               euro adhoc 
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company:     C.A.T. oil AG
             Kärtner Ring 11-13
             A-A-1010 Wien
phone:       +43(0) 1 535 23 20 - 0
FAX:         +43(0) 1 535 23 20 - 20
mail:     ir@catoilag.com
WWW:      http://www.catoilag.com
sector:      Oil & Gas - Upstream activities
ISIN:        AT0000A00Y78
indexes:     SDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt 
language:   English
 



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