Schoeller-Bleckmann Oilfield Equipment AG
euro adhoc: Schoeller-Bleckmann Oilfield Equipment AG
Financial
Figures/Balance Sheet
Schoeller-Bleckmann Oilfield Equipment AG: New
production plant to be built at Ternitz - absolute record sales and profit
results in 2006 - Positive outlook for 200
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
15.03.2007
Schoeller-Bleckmann Oilfield Equipment AG: New production plant to be built at Ternitz - absolute record sales and profit results in 2006 - Positive outlook for 2007
Ternitz/Vienna, 15 March 2007. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the prime market of the Vienna Stock Exchange, confirms at its Annual Press Conference the preliminary figures announced in January for fiscal 2006. Accordingly, group sales amounted to MEUR 239.5, an increase of 39 % against MEUR 172.7 year-on-year. Profit before tax in 2006 almost doubled to MEUR 46.8 (following MEUR 24.3). Net income rose by 99 %, from MEUR 17.3 in 2005 to MEUR 34.4 in 2006. As a result of this absolute record result, SBO will suggest to the Annual Meeting to increase the dividend to 80 eurocents per share for fiscal 2006 (50 eurocents per share in 2005).
Moreover, Schoeller-Bleckmann announces that a new production plant will be built at the Ternitz site. SBO was able to conclude multi-year customer contracts for the plant and, with it, change customer-supplier relations from the former quarter-to-quarter ordering system to a long-term, easier-to-plan and secured base, which is an absolute novelty in the industry.
First-ever long-term supplier contracts for the oilfield service industry
"The booming demand in the oilfield service market has prompted us to develop a strategy tailored to the current conditions so as to even further expand our capacities. At the core of this strategy is the construction of an additional, completely new production plant at Ternitz", comments CEO Gerald Grohmann on this most recent strategic decision.
At the same time, SBO was able to negotiate agreements with key customers to ensure long-term capacity utilisation for this greenfield investment. "Such long-term customer contracts are an absolute novelty in our industry", says Mr. Grohmann. "With this, we would be perfectly prepared to respond to a potential slowdown, even though currently no downturn seems to be in the offing."
The construction of the new plant will bring total capex spending in Ternitz for 2006 and 2007 to around MEUR 60. By the end of 2007 until early 2008, the headcount at Ternitz will rise to some 380 people, which is almost double the figure of three years ago. Those figures reflect the most important milestone in the course of growth SBO has taken in recent years. This step offers a number of advantages over acquisitions: SBO can expand capacities at book value. "In view of the currently high evaluation of the entire oilfield service industry, this is a tremendous financial benefit", says Mr. Grohmann. The grass-roots plant will meet latest state-of-the-art requirements. Moreover, our customers will gain added value from these new capacities, which is not the case in acquisitions. Whats more, on-premises synergies in Ternitz can be used optimally without integration risks. Construction of the plant at Ternitz will create a large number of new high-qualification jobs. Construction works are scheduled to commence in 2007 and production should go on-stream in the spring of 2008.
"Despite of the now initiated large-scale capex spending programme, SBO, with a net debt of MEUR 15.7 and an equity ratio of 60%, still may chose to consider acquisitions if favourable opportunities arise and they fit strategically.
New rotary forging machine at Ternitz on-stream
In an effort to work off the continued high order backlog and secure its further course of growth, SBO as early as 2005 launched an extensive, group-wide strategic capex spending programme and pressed ahead with it in fiscal 2006. Under the programme, expenditures with an aggregate volume of MEUR 58 were approved in 2006.
At the Ternitz facility, test runs were started on the new rotary forging machine a few days ago. The new state-of-the-art forge will not only considerably increase the output of MWD/LWD high-precision products; also, it will markedly reduce noise emissions at the site. In addition, some of the machine tools for high-precision components (MWD/LWD) acquired under the capacity expansion programme were put on stream in 2006.
Apart from Ternitz, major capex programmes in the amount of around MEUR 30 were also approved and implemented at the US sites and in Mexico.
In line with company growth, the total group headcount was continuously upsized. By the end of 2006, the SBO group employed a workforce of 1,086 (following 913 as at the end of 2005, up 19 %).
Strong demand for oil used for dynamic growth
In 2006, SBO made full use of the continued strong demand for hydrocarbons for further company growth. According to preliminary estimates of IEA (International Energy Agency) the global oil consumption as at the end of 2006 rose to 84,5 million barrels a day (following 83.6 million bbl/d the year before). IEA says that, as in the year before, the most significant rise in demand was observed in China (up 5.6 %). This development was reflected also in the "rig count" (number of drilling rigs operating globally), the leading indicator of global drilling activities. It grew from 2,993 units at the end of 2005 to 3,125 units at the end of 2006. In the past 15 years, the global rig count rose by around 71 %. Growing depletion rates and lower discovery rates also had their impact on the higher rig count.
The fact that drilling activities were stepped up is also mirrored in the continued high order backlog auf SBO. As at 31 December 2006, the order backlog reached its all-time high of MEUR 241, increasing 80 % against MEUR 134 the year before. Bookings went up 30 % from MEUR 269 in 2005 to a new record MEUR 349 in fiscal 2006, with order visibility reaching well into 2008.
All SBO branches of business benefited from this highly satisfying demand for high-tech high-precision components. Due to a number of new and innovative products, the drilling motor business also developed extremely well.
According to the now final figures, consolidated sales were MEUR 239.5, 39 % up against MEUR 172.7 generated the year before. Profit before tax in 2006 almost doubled to MEUR 46.8 (following MEUR 24.3). Net income increased by 99 %, from MEUR 17.3 in 2005 to MEUR 34.4 in 2006.
In light of the above, the Executive Board will propose to the Annual Meeting to pay a dividend of 50 eurocents plus a bonus of 30 eurocents per share, in total 80 eurocents (following 50 eurocents for 2005). For the shareholders of SBO, this is a record aggregate payout of MEUR 12.8 (following MEUR 8 for fiscal 2005).
Excellent performance of the SBO share
As in the years before, the share of Schoeller-Bleckmann Oilfield Equipment AG (SBO) again demonstrated an excellent performance in the year 2006. The annual high of the Schoeller-Bleckmann share was reached in December 2006, standing at EUR 35.2. The intraday all time high of the share was slightly higher, EUR 35.5. The closing price of the SBO share for the 2006 trading year was EUR 34.76, bringing the annual performance to approx. 41 % (closing rate in 2005: EUR 24.7). As a result, the price increase since SBOs listing in Vienna (first listed price on 27 March 2003: EUR 9.08) added up to 283 %.
Outlook into the first quarter and fiscal 2007
If the global economic development remains stable, no end of the upward cycle in the oilfield service industry appears to be in sight. Market observers and industry analysts alike forecast sustained demand for oil and gas on a high level and, consequently, no changes in the strong industry cycle. This assessment is in accord with the longer-term perspective of the order placement policy pursued by SBOs customers. In any event, the record order backlog of MEUR 241 as at the end of 2006 (following MEUR 134) is the foundation for sustained positive business development in fiscal 2007.
"The challenges in the months ahead will be both the speedy implementation of the capacity expansion programme, further upgrading and optimising production capacities and raw material planning and procurement, and the commencement of the greenfield investment at Ternitz", says Gerald Grohmann. In addition, new personnel will be recruited to work off the high order backlog as planned. The capital invested in fiscal 2006 will further increase production capacities in 2007.
Although there is some uncertainty as to how the euro/dollar exchange rate will develop, SBO is confident that both the excellent track record of the company and the consistent course of growth will be continued.
Key financial figures:
2006 2005 Sales 239.5 172.7 EBIT 48.2 25.5 EBIT margin (%) 20.1 14.7 Profit before tax 46.8 24.3 Net income 34.4 17.3 Cash-flow from operating activities 24.8 10.6 Capital expenditure 28.8 22.9 Earnings per share 2.15 1.13 Dividend per share 0.80* 0.50 Headcount 1,086 913
Schoeller-Bleckmann Oilfield Equipment AG is the global market leader in high-precision components for the oilfield service industry. The business focus is on non-magnetic drillstring components for directional drilling. SBO employs a workforce of 1.086 worldwide (31 December 2005: 913), 297 at Ternitz/Austria and 558 in North America (including Mexico).
Financial calendar 2007
19 April 2007 Annual General Meeting 3 May 2007 Ex-dividend date and dividend payment date 23 May 2007 Result 1st quarter 2007 23 August 2007 Result 2nd quarter 2007 21 November 2007 Result 3rd quarter 2007
end of announcement euro adhoc 15.03.2007 07:50:00
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: ext 101,
E-mail: sboe@sbo.co.at
Mick Stempel, Hochegger|Financials,
Tel: +43 1/504 69 87 ext 85,
E-mail: m.stempel@hochegger.com
Branche: Oil & Gas - Upstream activities
ISIN: AT0000946652
WKN: 907391
Index: WBI, ATX Prime
Börsen: Wiener Börse AG / official dealing