Schoeller-Bleckmann Oilfield Equipment AG
euro adhoc: Schoeller-Bleckmann Oilfield Equipment AG
Annual
Reports
Schoeller-Bleckmann Oilfield Equipment AG:
Confirmation of preliminary figures for 2003
Proposed dividend 30 cents/share, positive development of bookings,
uncertainties due to do
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
Ternitz/Vienna, March 31, 2004. Schoeller-Bleckmann Oilfield Equipment AG (SBO) listed on the prime market of the Vienna Stock Exchange confirms the preliminary figures for 2003 announced in February. According to the now final figures group sales were EUR 134.2 mill. (following EUR 178.6 mill. in 2002). The EBIT was EUR 13.1 mill. (following EUR 26.1 mill. in the year before). However, with an EBIT margin of 9.8 %SBO was able to manage well the business year of 2003 that was rather challenging due to the difficult overall economic situation. Adjusted for currency fluctuations and based on the dollar - euro exchange rate in 2002 SBO would have generated an EBIT of EUR 20.4 mill. and an EBIT margin of 13.2 %.
Gerald Grohmann, SBOs CEO: "The result shows that SBO due to its value strategy is able to generate satisfying results and a good return on capital even against an economically most adverse background. This strategy secures our challenging economic objectives mainly in the long run."
The Executive Board will suggest to the General Meeting to distribute a dividend of 30 cents per share (following a dividend of 30 cents plus a premium of 20 cents in 2002). Based on the closing price of EUR 8.9 this corresponds to a dividend yield of 3.4 %.
Dissatisfying market development in 2003 The global demand for high-tech drilling equipment for the oilfield service industry was dissatisfying in 2003. This development was due to the fact that crude oil consumption was covered with existing production capacities. Additionally, oilfield service companies could cover most of their demand for drilling equipment from their inventories.
The rise of the rig count, the most important indicator of drilling activities, from 1,957 at the end of 2002 to 2,334 at the end of 2003 was almost exclusively due to onshore gas drillings conducted mainly in North America. These gas drillings were vertical drillings requiring only standard equipment. However, the market for sophisticated directional drilling and complex offshore activities stagnated.
Dollar exchange rate a major burden In the course of 2003, the USD lost around 20 % against the Euro. SBO generated approx. 80 % of its sales revenues in USD, while some 60 % of expenditure were due in USD. Apart from the weak market development the heavy devaluation of the dollar was an additional strain on the sales and results of the SBO group. These exchange rate fluctuations could only partly be levelled out by currency hedging measures.
Challenges successfully managed SBO counteracted this scenario by launching a variety of individual steps such as flexible use of production capacities, productivity increase programmes, continuous improvement of the product portfolio and cost structure. A manufacturing co-operation scheme was concluded in North America to subcontract standard production steps to Mexico. In-house manufacture of standard oil tools was discontinued at Darron/UK as the market for such products had declined.
The weakness of the dollar was used for strategic future-oriented investments in the dollar region. In mid-2003 and retroactively from January 1, 2003 SBO increased ownership of the most profitable US-subsidiary Knust-SBO Ltd./Houston from 75 % to now 100 %. Moving the location of the subsidiary Godwin-SBO L.P. in Houston in the third quarter was the prerequisite of creating optimised production flows which will allow to implement cost saving potentials in the future as well. Moreover, additional space for expansion projects will be available at the new location.
In 2003 gunhole drilling operations started in Houston. They will help to step up capacities for high-precision specialty drillings in order to meet growing demand for this technology.
In the wake of restructuring measures the headcount of the SBO group was reduced from 852 as of December 31, 2002 to 800 as of December 31, 2003 while at the same time productivity was increased.
Successful relisting to Vienna SBO has been listed on the prime market of the Vienna Stock Exchange since March 27, 2003 and on July 1, 2003 shares were delisted from Nasdaq Europe. SBO has taken re-listing as an occasion to re-position the SBO share with institutional and private investors, improve liquidity and, therefore, obtain a fair valuation of the share. Following re-listing to Vienna, trading volumes and share prices developed rather positively. Since the introduction of the share on the Vienna Stock Exchange, the average daily transaction volume has been around EUR 106,754 (March 27 through December 31, 2003). The price of the SBO share rose by around 14 %; considering the dividend of 50 cents distributed for 2002 the value increase for shareholders amounts to some 21 % in 2003.
Outlook into the first quarter and the business year of 2004 The lately rather positive business data from Asia and the US should lead to rising demand for crude oil, which, in turn, will trigger higher demand for drilling equipment. Additionally, decreasing equipment inventories at SBOs customers over the year should be mirrored in growing numbers of bookings. Compared with bookings in 2003, bookings received in the first quarter of 2004 already improved markedly.
However, the dollar exchange rate is a major parameter for results to be expected for the entire year of 2004. As a consequence of the lately rather heavy currency fluctuations any outlook is difficult to make because of the uncertainties involved.
SBO will adhere to its proven value strategy in 2004 as well. Selective investments will help both to further strengthen the market position and improve the cost structure of the group. Additionally, SBO will continue its activities to expand its long-standing technological edge. The introduction of new products, such as recently a new downhole motor, will give the company additional sales opportunities.
Comparison of key figures in MEUR
~
2003 2002
Sales 134.2 178.6
EBIT 13.1 26.1
EBIT margin (%) 9.8 14.6
Profit before tax 9.4 19.8
Consolidated group result 6.1 11.1
EPS* 0.47 0.85
Headcount ** 800 852
~* based on average shares outstanding **Reporting date December 31
Schoeller-Bleckmann Oilfield Equipment AG is the global market leader for high-precision components for the oilfield service industry. The business focus is on non-magnetic drillstring components for directional drilling. Worldwide, SBO employs a workforce of 800 (end of 2002: 852), currently 207 in the company headquarters at Ternitz, Lower Austria and 393 in North America. The majority shareholder of the company (approx. 64 %) is Berndorf AG.
end of announcement euro adhoc 31.03.2004
Further inquiry note:
Gerald Grohmann, Chief Executive Officer
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz, Hauptstraße 2
Tel: +43 2630/315 DW 110, fax: DW 101
E-Mail: sboe@sbo.co.at
Mick Stempel
Tel.: 01/5046987-85
mailto:m.stempel@hochegger.com
Branche: Oil & Gas - Upstream activities
ISIN: AT0000946652
WKN: 94665
Index: ATX Prime, WBI
Börsen: Wiener Börse AG / official dealing