EANS-News: C.A.T. oil accelerates growth and increases revenues by 24.4% yoy in H1
30.08.2011 – 08:32
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- quarterly report Subtitle: Revenues boosted to EUR 135.0 million in H1 Total job counts and revenues reached new quarterly high in Q2 Significant upswing in sidetracking activities in Q2 Healthy H1 EBITDA margin of 20.0% despite diversification Outlook for FY2011 confirmed Vienna, 30 August 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 first six months of 2011. Supported by favorable macroeconomic conditions and, therefore, higher customer activity levels, C.A.T. oil successfully accelerated its business expansion in the second quarter. The Company increased its total job count by 11.0% yoy to 878 jobs and its total revenues by 20.6% yoy to EUR 74.0 million in Q2 2011. C.A.T. oil´s job count and revenues hereby not only exceeded the pre-crisis levels, but also achieved new quarterly all time highs. Despite current uncertainties over the global economic developments in the second half of the year, C.A.T. oil is well on track to attain its expansionary plans and, therefore, confirms its positive outlook for the financial year 2011. Manfred Kastner, CEO of C.A.T. oil, commented: "During the second quarter we successfully advanced our operations and realized a strong top line growth. In addition, we continued setting up our conventional drilling business. We are well on track and pleased with the progress we have made to date. Backed by the strong company development in the first six months, we are confident for the second half: We will concentrate on the diversification into our third core business and will retain a focus on sustaining healthy levels of profitability and top line growth across the existing businesses." H1 revenues up 24.4% yoy due to higher activity levels in Q2 During the first half of 2011 C.A.T. oil increased revenues by 24.4% yoy to EUR 135.0 million (H1 2010: EUR 108.5 million); the Company particularly benefited from a strong growth in demand for the existing service offerings and the seasonal upturn in customers´ activities in the second quarter. During the reporting period the total job count increased by 17.0% yoy to 1,648 jobs (H1 2010: 1,409 jobs), driven by a 24.4% yoy gain in the fracturing job count and a 13.9% yoy rise in the sidetracking job count. In the sidetrack drilling business, the Company was able to compensate for the delays, which occurred during the first quarter, and rolled over unexecuted orders, thus boosting the job count by 44.1% yoy in Q2. During the first six months the auxiliary job count stayed effectively flat yoy upon the completion of the outsourcing of the low margin workover business in Q2. C.A.T. oil´s average per job revenue staged a 7.7% yoy increase to TEUR 81 (H1 2010: TEUR 76) in the wake of the improved fracturing prices and a marginally stronger Russian rouble relative to the euro. Cost base driven by higher operating activities and the front loaded costs for business expansion During the first six months of 2011 cost of sales went up 30.1% yoy to EUR 116.0 million (H1 2010: EUR 89.2 million) and were impacted by four effects: significantly higher operating activity levels in the fracturing and sidetracking businesses, the Q1 setbacks in sidetracking activities, the completion of the outsourcing processes in the workover business and the front-loaded costs for the expansion into high class conventional drilling. The set up of this business, which will become C.A.T. oil´s third core service line, is well on track. The first conventional drilling rig was delivered to Russia in Q2 and was put into operation in July. Eight more rigs will be delivered to Russia during the second half of 2011 and four of them are scheduled to become operational by the end of the year. General and administrative expenses increased 4.9% yoy to EUR 9.6 million (H1 2010: EUR 9.1 million), primarily due to the expansion-related costs such as additional wages and salaries, travelling and training expenses. The total weighted average headcount went down 3.8% yoy to 2,362 employees (H1 2010: 2,455 employees). This development reflected, on the one hand, the new hires for the set up of the new business and, on the other hand, the reduction in the headcount upon the complete outsourcing of the workover operations. Healthy level of profitability despite expansion into third core business C.A.T. oil´s half year earnings also reflect the diversification into conventional drilling: Although the Company realized a strong revenue growth, the investment-related expenses were not fully offset. Nonetheless, gross profit and EBITDA remained stable compared to H1 2010 and amounted to EUR 19.0 million (H1 2010: EUR 19.3 million) and EUR 27.0 million (H1 2010: EUR 26.8 million), respectively. Although the EBITDA margin declined compared to the prior year period, it remained at a healthy level of 20.0% (H1 2010: 24.7%). EBIT declined 19.4% yoy to EUR 10.0 million (H1 2010: EUR 12.4 million), primarily reflecting higher depreciation expenses related to investments in new operating capacity. C.A.T. oil´s net income amounted to EUR 6.9 million (H1 2010: EUR 8.5 million), owing to a lower financial result mainly driven by a decrease in the Company´s foreign currency exchange gain. Capital expenditure primarily funded through cash flow During the reporting period, funds from operations went down 9.2% yoy to EUR 23.7 million (H1 2010: EUR 26.1 million) largely due to a lower pre-tax profit. Cash flow from operating activities amounted to a net inflow of EUR 16.1 million (H1 2010: net inflow of EUR 33.5 million). Capital expenditure increased to EUR 44.4 million (from EUR 12.4 million in H1 2010) due to the payments for the new rigs. Cash flow from investing activities was a net outflow of EUR 43.4 million (H1 2010: net outflow of EUR 12.4 million) that included the proceeds from the sale of equipment of EUR 1.1 million (H1 2010: EUR 3.4 million). Cash flow from financing activities was a net inflow of EUR 17.5 million in H1 2011 (H1 2010: net outflow of EUR 3.8 million), primarily owing to the increase in long-term and short-term borrowings. As of 30 June 2011, cash and cash equivalents amounted to EUR 24.4 million (31 December 2010: EUR 34.1 million). C.A.T. oil´s balance sheet remained strong with a healthy equity ratio of 72.8% as of 30 June 2011 (31 December 2010: 83.2%). Outlook for the full year 2011 confirmed Stock markets have recently been highly volatile, reflecting the uncertainties about the global economic outlook for the remaining months of 2011. At this point in time, C.A.T. oil expects the macroeconomic environment in its core markets, Russia and Kazakhstan, to remain supportive and operating activities to stay on a high level. C.A.T. oil is confident that it is well positioned to win additional orders in the remaining months of 2011 and anticipates the total revenues for the current financial year to exceed the order book level of EUR 239 million (based on an exchange rate of 40 roubles per euro) as of August 2011. In addition, C.A.T. oil remains committed to sustaining profitable growth. Although inflationary pressures and effects of the business expansion will have an impact on profitability, the Company remains committed to achieving a 2011 EBITDA margin close to the 2010 level. C.A.T. oil will capitalize on its strong market position in Russia and Kazakhstan and continue delivering high quality services to realize further growth. www.catoilag.com Press contact: FD FD Carolin Amann Thomas Krammer Phone: +49 (0)69 92037-132 Phone: +49 (0)69 92037-183 Email: carolin.amann@fd.com Email: thomas.krammer@fd.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. As of 30 June 2011, the Company employed an average of 2,362 people, most of which are based in Russia and Ka-zakhstan. Key financial figures for H1 2011 [in million EUR] H1 2011 H1 2010 Change in % Revenues 135.0 108.5 24.4 Cost of sales 116.0 89.2 30.1 Gross profit 19.0 19.3 -1.5 EBITDA 27.0 26.8 0.7 EBITDA margin (in%) 20.0 24.7 EBIT 10.0 12.4 -19.4 EBIT margin (in%) 7.4 11.4 Net income 6.9 8.5 -19.3 Earnings per share (in EUR) 0.140 0.174 -19.3 Equity Ratio (in %)(1) 72.8 83.2 Cash flow from operating activities 16.1 33.5 -51.9 Cash flow from investing activities -44.4 -12.4 >100 Cash flow from financing activities 17.5 -3.8 >100 Cash and cash equivalents(1) 24.4 34.1 -28.5 Total job count 1,648 1,409 17.0 Per-job revenue (in thou. EUR) 81.0 76.0 7.7 Employees 2,362 2,455 -3.8 (1) As of 30 June 2011 and 31 December 2010 respectively Key financial figures for Q2 2011 [in million EUR] Q2 2011 Q2 2010 Change in % Revenues 74.0 61.3 20.6 Cost of sales 60.4 47.4 27.4 Gross profit 13.5 13.9 -2.5 EBITDA 18.4 17.8 3.3 EBITDA margin (in%) 24.8 29.0 EBIT 9.4 10.6 -11.0 EBIT margin (in%) 12.8 17.3 Net income 7.8 7.5 4.6 Earnings per share (in EUR) 0.160 0.153 4.6 Cash flow from operating activities 15.8 33.9 -53.2 Cash flow from investing activities -16.6 -9.6 78.5 Cash flow from financing activities 11.5 -5.5 >100 Total job count 878 791 11.0 Per-job revenue (in thou. EUR) 83.0 77.0 8.6 Further inquiry note: Thomas Krammer Tel: +49(0)69-92037-183 Email: thomas.krammer@fd.com end of announcement euro adhoc -------------------------------------------------------------------------------- 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