C.A.T. oil AG

EANS-News: C.A.T. oil successfully drives growth and profitability in H1 2012

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quarterly report

Subtitle: •	Revenue growth of 16.9% to EUR 157.8 million
•	EBITDA up 25.1% to EUR 33.8 million 
•	Improved EBITDA margin of 21.4%
•	Business expansion well on track: eight out of nine new high class
conventional drilling rigs in operation
•	Additional orders raise order book for full year 2012 to EUR 307 million –
updated guidance


Vienna, 30 August 2012 (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 first half of 2012. C.A.T. oil
realized strong revenue and EBITDA growth which was primarily stimulated by
strong demand for its services, the increased per job revenue and operational
efficiency. In addition, the Group has almost completed the set up of its third
core service line of high class conventional drilling and to date has eight out
of nine drilling rigs in operation. Based on the successful performance in the
first six months of the year, C.A.T. oil remains optimistic. Consequent to the
latest additions, the order book for full year 2012 totaled EUR 307 million as
of 30 August 2012, and C.A.T. oil expects to exceed prior-year's performance.

Manfred Kastner, CEO of C.A.T. oil, commented: "We have successfully capitalized
on the positive economic environment and our strong market position to further
drive growth. Due to strong demand and a high share of large and complex jobs we
were able to push our revenues by about 17% and to increase EBITDA by one fourth
compared to the first six months of 2011. At the same time we remained fully
dedicated to further set up high class conventional drilling. All of our rigs
have successfully been marketed and during the second quarter we took four more
rigs into operations. Going forward, C.A.T. oil will operate with a very well
diversified portfolio and provide even more services out of one hand. This makes
us an even more valuable and reliable partner for our customers. Although the
economic and financial crisis in the euro zone continues and impacts confidence
in certain regions, dynamics in our markets are intact. We won additional
tenders and are confident that we will be granted additional orders during the
third and fourth quarter. We are therefore confident to outperform both,
revenues and EBITDA of the prior year."

Revenue increase of 16.9% 

C.A.T. oil grew its revenues by 16.9% yoy to EUR 157.8 million (H1 2011: EUR
135.0 million), stimulated by an increase in job counts of 1.8% yoy to 1,677
jobs (H1 2011: 1,648 jobs) and a 13.7% yoy rise in the average per job revenue
to TEUR 93 (H1 2011: TEUR 81). The number of fracturing jobs rose by 4.1% yoy
and the number of sidetrack drilling jobs decreased by 12.7% yoy due to the
greater share of lengthy horizontal sidetracks. Growth of average revenues per
job was driven by the greater size and complexity of jobs, as well as a higher
share of turnkey jobs and further contribution by the new high class
conventional drilling service. 

Cost base developed at a lower rate than revenues

Despite the increased operating activity levels and inflationary pressures, cost
of sales rose only by 14.5% yoy to EUR 132.8 million (H1 2011: EUR 116.0
million). Key drivers for the development mainly were the greater operating
leverage and efficiency gains. The Company's total weighted average head-count
went up by 2.8% to 2,428 employees (H1 2011: 2,362 employees) primarily driven
by the latest hires for the new high class conventional drilling business.

EBITDA margin up to 21.4%

EBITDA increased by 25.1% yoy to EUR 33.8 million (H1 2011: EUR 27.0 million)
primarily driven by the strong revenue growth and the disproportionally lower
development of cost of sales. The EBITDA margin expanded to 21.4% yoy in H1 2012
(H1 2011: 20.0%).
The Company's earnings before interest and tax (EBIT) went up 30.4% yoy to EUR
13.0 million (H1 2011: EUR 10.0 million) resulting in the EBIT margin of 8.2%
(H1 2011: 7.4%).

Net result impacted by extraordinary effects and higher tax rate

The solid operational performance is not fully reflected in net income, which
decreased by 3.0% yoy to EUR 6.7 million during the reporting period (H1 2011:
EUR 6.9 million). The decline was mainly due to the following three reasons: the
negative financial result, provisions for the seismic operations in India and a
higher corporate tax rate.
The Company's net financial result amounted to EUR -2.6 million (H1 2011: EUR
0.2 million) and was primarily impacted by increased interest expenses,
unrealized and realized foreign currency translation losses related to
inter-company loans, as well as credit facilities in US-dollars for the payments
of the new high class conventional drilling rigs.
Although the Indian operations only account for a very small portion of the
Group's business and consist of seismic services only, C.A.T. oil took steps to
prepare for the currently difficult situation in the Assam region. During the
second quarter Assam faced the increased political instability and violent
excesses which also impacted C.A.T. oil's operations. As it is currently unclear
how this volatile situation will develop C.A.T. oil has preventively formed
reserves and provisions in the total amount of EUR 2.1 million.

Ongoing strong cash generation 

Funds from operations increased by 21.0% yoy to EUR 28.7 million (H1 2011: EUR
23.7 million) primarily reflecting the combined effect of the higher pre-tax
profit and depreciation as well as the lower cash taxes. Cash flow from
operating activities was a net inflow of EUR 22.5 million (H1 2011: net inflow
of EUR 16.1 million) due to the higher funds from operations and the lower
investments in net working capital. Capital expenditure went down 70.8% yoy to
EUR 12.9 million (H1 2011: EUR 44.4 million) reflecting the lower investment
plans for 2012. In total C.A.T. oil has budgeted EUR 30 million for 2012 to
finalize the set up of the new high class conventional drilling business and to
maintain capacities in good working order. Cash flow from investing activities
was a net outflow of EUR 11.7 million (H1 2011: net outflow of EUR 43.4
million). Cash flow from financing activities was a net outflow of EUR 12.5
million in H1 2012 (H1 2011: net inflow of EUR 17.5 million) mainly due to an
early redemption of long-term borrowings and an increase in cash dividend paid.
As of 30 June 2012, cash and cash equivalents stood at EUR 28.3 million (31
December 2011: EUR 30.4 million). C.A.T. oil maintained a healthy balance sheet
with an equity ratio of 61.3% as of 30 June 2012 (31 December 2011: 62.3%). 

Confident outlook for FY 2012 

Based on the strong performance during the first six months and additional
orders bringing up the order book to EUR 307 million (based on a rouble-to-euro
exchange rate of 40) for full year 2012, C.A.T. oil remains optimistic with
respect to the second half of 2012. Although the unsolved sovereign debt crisis
has called for further cautiousness in certain regions of Europe, C.A.T. oil
currently sees ongoing solid demand for its services in its markets. In
addition, the oil price is at a high level and supports upstream activities as
well as investments of customers. C.A.T. oil therefore is confident to exceed
the prior year revenue and earnings growth. Assuming stable energy prices and
costs as well as no material deterioration of the economic situation in its core
markets, the Company expects revenues in the range of EUR 300 to 320 million and
EBITDA in the range of EUR 67 to 73 million (based on a rouble-to-euro exchange
rate of 40) for full year 2012.


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 has
established conventional drilling as third core service which allows to access
completely unexploited oil and gas reserves. 
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 2011, the Company initiated a comprehensive investment
program with a volume of EUR 150 million, focusing on the set up of high class
conventional drilling as third core service offering. The new service line will
be fully installed in 2012.
C.A.T. oil's portfolio also includes cementing and seismic services. With its
state-of-the art technology the Company clearly differentiates itself in its
core markets as the equipment allows for very 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. In H1 2012, the Company employed an
average of 2,428 people, most of which are based in Russia and Kazakhstan. 
 

Key financial figures for H1 2012


[million EUR]   
                                H1 2012    H1 2011    Change in %
Revenues                         157.8      135.0        16.9
Cost of sales                    132.8      116.0        14.5
Gross profit                      25.0       19.0        31.7
EBITDA                            33.8       27.0        25.1
EBITDA margin (%)                 21.4       20.0       
EBIT                              13.0       10.0        30.4
EBIT margin (%)                    8.2        7.4     
Net income                         6.7        6.9        -3.0
Earnings per share (EUR)         0.136      0.140        -3.0
Equity Ratio (%) (1)              61.3       62.3    
                        
Cash flow from
operating activities              22.5       16.1        39.8
Cash flow from investing
activities                       -11.7      -43.4       -72.9
Cash flow from
financing activities             -12.3       17.5       >-100
Cash and cash equivalents (1)     28.3       30.4        -6.9
                        
Total job count                  1,677      1,648         1.8
Per-job revenue (thou. EUR)         93         81        13.7
Employees                        2,428      2,362         2.8

(1) As of 30 June 2012 and 31 December 2011 respectively 


Key financial figures for Q2 2012

[in million EUR]       
                                Q2 2012    Q2 2011    Change in %
Revenues                          82.5       74.0        11.5
Cost of sales                     66.9       60.4        10.7
Gross profit                      15.5       13.5        14.9
EBITDA                            19.8       18.4         8.0
EBITDA margin (in%)               24.1       24.8    
EBIT                               9.0        9.4        -4.6
EBIT margin (in%)                 10.9       12.8    
Net income                         4.2        7.8       -46.9
Earnings per share (in EUR)      0.085      0.160       -46.9
                        
Cash flow from
operating activities              13.4       15.8       -15.0
Cash flow from
investing activities              -6.1      -16.0       -61.9
Cash flow from
financing activities              -3.1       11.5       >-100
                        
Total job count                    877        878        -0.1
Per-job revenue (in thou. EUR)      93         83        11.8


Further inquiry note:
Thomas M. 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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