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EANS-News: C.A.T. oil AG
C.A.T. oil further improves profitability and
earnings under abnormally harsh weather conditions
- Revenue development impacted by rough weather conditions and changes in revenue mix - Ongoing cost control and portfolio optimisation contribute to increased EBITDA and EBIT margins
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quarterly report/Q1 2010 Results
Subtitle: - Revenue development impacted by rough weather conditions and changes in revenue mix - Ongoing cost control and portfolio optimisation contribute to increased EBITDA and EBIT margins
Vienna (euro adhoc) - 27 May 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 has published its results for the first quarter 2010. During the reporting period, C.A.T. oil, on the one hand, experienced positive effects from the global economic recovery; on the other hand, the Company faced adverse weather conditions in Western Siberia. As a consequence, the Company´s operational weather downtime days reached a historical high and had a negative impact on revenue development. Despite the climatic challenges, however, C.A.T. oil was able to further improve its profitability and increase its EBITDA and EBIT margins.
Manfred Kastner, CEO of C.A.T. oil, commented: "The first quarter is tradition-ally weaker due to the difficult winter weather in our core markets. With aver-age temperatures of minus 35 degrees Celsius in Western Siberia, representing the lowest levels since C.A.T. oil went public, the first quarter 2010 has been exceptional. Our weather downtime days were nearly two and a half times as high as usual. The right combination of our expertise, state-of-the-art technology and efficiency was decisive for the performance in the first quarter. The fact that we were able to further increase our profitability during this extraordinary winter demonstrates that our ongoing efforts to optimise op-erations have paid off. C.A.T. oil is operationally and financially very solid and well positioned to deliver additional growth in 2010."
Revenues impacted by lower job count and amended service mix
To meet customers´ demand more flexible and improve revenue mix, C.A.T. oil is constantly optimising its service portfolio and capacities. In the first quarter 2010, the Company reduced its own capacities for low-margin auxiliary workover services as in the future these will be performed by external partners, if and where needed. C.A.T. oil enjoyed solid demand for its core businesses in Q1 2010, with sidetrack drilling being growth driver number one, delivering a 100% YoY increase in job count.
In the reporting period, the total number of jobs declined by 7.3% YoY to 618 jobs (Q1 2009: 667 jobs), reflecting the reduced operational activities due to the weather and the streamlined service portfolio. At an average level of 41.4, the Rouble-to-Euro exchange rate was more favorable than in the previous year, but was not strong enough to offset the effects of the difficult weather conditions. In the reporting period, revenues declined by 12.4% YoY to EUR 47.1 million (Q1 2009: EUR 53.8 million) and average revenues per job decreased by 2.4% YoY to TEUR 74 (Q1 2009: TEUR 76), largely reflecting changes in hydraulic fracturing and sidetrack drilling revenue mix and lower seismic activities.
The cost of sales went down by 12.4% YoY to EUR 41.7 million (Q1 2009: EUR 47.6 million) - reflecting the reduced working day level as well as positive effects of the Company´s continued strict cost management. As part of C.A.T. oil´s continued cost optimisation programme, general and administrative expenses were reduced by 5.7% YoY to EUR 4.2 million (Q1 2009: EUR 4.4 million); personnel expenses decreased by 13.9%, primarily reflecting the outsourcing of auxiliary functions and the adjustment of the work force to 2,557 employees (Q1 2009: 3,228).
Strong increase in EBIT and EBITDA
The successfully implemented measures to increase profitability are clearly visible in the Company´s income statement: earnings before interest, corporate tax, depreciation and amortization (EBITDA) increased by 11.9% YoY to EUR 9.1 million (Q1 2009: EUR 8.1 million), resulting in an improved EBITDA margin of 19.2% (Q1 2009: 15.0%). C.A.T. oil´s earnings before interest and corporate tax (EBIT) rose by 40.6% YoY to EUR 1.8 million (Q1 2009: EUR 1.3 million) with an expansion in the EBIT margin to 3.7% from 2.3% in Q1 2009.
C.A.T. oil´s net financial result increased to EUR 1.2 million (Q1 2009: loss of EUR 3.5 million), mainly due to the unrealised foreign currency translation gain of EUR 1.0 million on the euro-denominated inter-company loans (Q1 2009: loss of EUR 2.8 million). As a consequence of the improved financial result, pre-tax profit was up to EUR 2.9 million, compared to a pre-tax loss of EUR 2.2 million in Q1 2009.
C.A.T. oil´s net income amounted to EUR 1.0 million, compared to a net loss of EUR 0.9 million a year ago. Earnings per share amounted to EUR 0.021 in Q1 2010 (Q1 2009: loss per share of EUR 0.019).
Healthy financial situation: strong equity ratio and net cash
Despite C.A.T. oil´s cash earnings before changes in working capital improved by 61.6% YoY to EUR 10.0 million (Q1 2009: EUR 6.2 million), cash flow from operating activities was a net outflow of EUR 0.4 million (Q1 2009: net inflow of EUR 13.9 million). This development primarily reflected the postponed invoicing due to delays related to third-party administrative processes. Cash flow from investing activities represented a net outflow of TEUR 40 (Q1 2009: net outflow of EUR 3.2 million), reflecting the combination of maintenance capex and proceeds from sale of equipment. The Company´s cash flow from fi-nancing activities amounted to a net inflow of EUR 1.7 million in Q1 2010, compared to a net outflow of EUR 9.1 million in Q1 2009. This is primarily indicating the increase in Rouble-denominated short-term interest-bearing liabilities of the Company subsidiaries.
Cash and cash equivalents increased by 11.5% to EUR 32.4 million as of 31 March 2010, compared to EUR 29.1 million as of 31 December 2009. Net cash rose by 6.3% to EUR 30.8 million as of 31 March 2010 (31 December 2009: EUR 29.0 million). Thanks to a conservative financial strategy, the Company sustained a strong balance sheet with an equity ratio of 84.4% as of 31 March 2010 (31 December 2009: 84.6%).
Cautious optimism for 2010 reiterated
During the reporting period, C.A.T. oil demonstrated yet again its capability to navigate efficiently through a challenging operating environment. The Compa-ny´s lean structure and strong operational expertise fuel the management´s confidence that C.A.T. oil will be able to capitalise on the existing and future growth opportunities. C.A.T. oil´s current order book amounts to EUR 206 million and the Company views prospects for additional service orders in the second half of 2010 as positive. Although C.A.T. oil´s work flow was disrupted by abnormally harsh weather conditions, the management anticipates that the Company´s customers will rollover unexecuted service orders into the current and the following quarters of 2010.
With respect to capital expenditures, C.A.T. oil maintains its conservative approach and continues to focus on near-term growth through the optimised deployment of its existing capacities and further gains in its operational efficiency. The Company´s capital expenditure programme, is contingent upon the sustainable improvement in demand for oil and gas field services. C.A.T. oil will revise capex levels in the second half of the year and decide on adjustments depending on the sustainability of market conditions.
Press contact: FD
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 optimise 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 hy-draulic 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 pro-vider since its market entrance in the early nineties.
The Company has its headquarters in Vienna and employed an average of 2,557 people on 31 March 2010, most of whom are based in Russia and Kazakhstan. The Company´s current order book for 2010 amounts to approximately EUR 206 million.
Key financial figures for Q1 2010
[million EUR] Q1 2010 Q1 2009 Change %
Revenues 47.1 53.8 -12.4
Cost of sales 41.7 47.6 -12.4
Gross profit 5.4 6.1 -12.1
EBITDA 9.1 8.1 11.9
EBITDA margin (%) 19.2 15.0
EBIT 1.8 1.3 40.6
EBIT margin (%) 3.7 2.3
Net income 1.0 -0.9 > 100
Earnings per share (EUR) 0.021 -0.019 > 100
Equity Ratio (%) 1 84.4 84.6
Cash flow from operating activities -0.4 13.9 > -100
Cash flow from investing activities -0.04 -3.2 -98.8
Cash flow from financing activities 1.7 -9.1 > 100
Cash and cash equivalents 1 32.4 29.1 11.5
Total job count 618 667 -7.3
Per-job revenue (in thou. EUR) 74 76 -2.4
Employees 2,557 3,228 -20.8
1 As of 31 March 2010 and 31 December 2009 respectively
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ots Originaltext: C.A.T. oil AG
Im Internet recherchierbar: http://www.presseportal.ch
Further inquiry note:
Tel.: +49 (69) 920 37-183
Branche: Oil & Gas - Upstream activities
Index: SDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard