EANS-News: C.A.T. oil maintains positive growth momentum in Q3 2011
29.11.2011 – 08:32
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- quarterly report Subtitle: All-time-high in operating activity levels in Q3 and 9M 2011 Revenue increase of 14.3% to EUR 74.7 million in Q3 EBITDA up 13.8% yoy to EUR 18.9 million in Q3; strong EBITDA margin of 25.3% Outlook for FY2011 specified Vienna, 29 November 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 third quarter and the first nine months of 2011. Backed by the continued positive growth momentum of the second quarter, C.A.T. oil continued the positive trend in Q3, achieved a new record in job count and increased the average per job revenue. Thus, the Company increased its Q3 revenues by 14.3% yoy to EUR 74.7 million (Q3 2010: EUR 65.4 million) and achieved a 20.6% yoy growth in revenues to EUR 209.7 million on a nine month basis (9M 2010: EUR 173.8 million). The Company increased its EBITDA by 13.8% yoy to EUR 18.9 million for Q3 (Q3 2010: EUR 16.6 million) and by 5.7% yoy to EUR 45.9 million for 9M (9M 2010: 43.5 million). Despite the front-loaded costs related to the business expansion, C.A.T. oil operated on a very profitable basis: The EBITDA margin amounted to 25.3% for Q3 (Q3 2010: 25.4%) and reached a respectable level of 21.9% for the first nine months (9M 2010: 25.0%). Based on the strong performance during the first three quarters, C.A.T. oil specifies its outlook and sees itself well on track to successfully reach its goals for the full year 2011. Manfred Kastner, CEO of C.A.T. oil, commented: "We have worked hard to grow our business and successfully utilize the positive momentum to push our activity levels to a new record high for both, Q3 as well as 9M 2011. We are now approaching the finishing line in successfully reaching our goals for the year." Manfred Kastner continues: "C.A.T. oil is well known for its efficiency and high operating standards. We therefore remain absolutely focused on our quality approach while diversifying into high class conventional drilling. We view conventional drilling as yet another important growth driver for our business from 2012 onwards and are currently completing the talks with our customers on the deployment of our new rigs." All-time-high in Q3 and 9M activity levels Thanks to a sustainable growth of demand for its core services, C.A.T. oil enjoyed an all-time-high in the operating activity levels in Q3 and 9M 2011. The Company´s Q3 total service job count rose 10.0% yoy to 930 jobs (Q3 2010: 846 jobs), driving the 9M total job count up 14.3% yoy to 2,578 jobs (9M 2010: 2,255 jobs). For 9M 2011, C.A.T. oil expanded its fracturing and sidetrack drilling operations by 17.9% yoy and 14.7% yoy, respectively. The high operating volumes compounded by improvements in the average per job revenues significantly contributed to boost revenues in Q3 and 9M. Cost base reflects higher operating activity levels and front-loaded costs for business expansion Cost of sales rose by 19.2% yoy to EUR 61.4 million in Q3 2011 (Q3 2010: EUR 51.5 million) and 26.1% yoy to EUR 177.4 million in 9M 2011 (9M 2010: EUR 140.7 million), reflecting higher operating activity levels, the effects of the accomplished outsourcing of the workover business, slower sidetrack drilling operations in Q1 as well as the front-loaded costs for the expansion into high class conventional drilling. The first conventional drilling rig has already been in operation since July 2011; seven more new rigs have to date been shipped to Russia and are currently being cleared at customs or adapted for operations. By the end of the year all the new rigs will have arrived in Russia and will be put into operation consecutively. General and administrative expenses went up 1.4% yoy to EUR 4.7 million in Q3 2011 (Q3 2010: EUR 4.6 million) and 3.7% yoy to EUR 14.3 million in 9M 2011 (9M 2010: EUR 13.8 million) primarily driven by the costs related to the expansion of the business. The total weighted average headcount decreased by 2.2% yoy to 2,373 employees in 9M 2011 (9M 2010: 2,427 employees) reflecting the headcount reduction due to the outsourced workover operations; at the same time C.A.T. oil made new hires for the set up of conventional drilling. Profitable growth despite substantial investments Despite the substantial investments in growth and diversification during the reporting period, C.A.T. oil succeeded to operate on a highly profitable basis. Earnings before interest, tax and depreciation (EBITDA) increased by 13.8% yoy to EUR 18.9 million in Q3 2011 (Q3 2010: EUR 16.6 million) and 5.7% yoy to EUR 45.9 million in 9M 2011 (9M 2010: EUR 43.5 million). The Company sustained a strong EBITDA margin at 25.3% in Q3 2011 (Q3 2010: 25.4%) and achieved a very respectable EBITDA margin level of 21.9% in 9M 2011 (9M 2010: 25.0%). The Company´s earnings before interest and tax (EBIT) contracted 6.7% yoy to EUR 8.7 million in Q3 2011 (Q3 2010: EUR 9.3 million) and 14.0% yoy to EUR 18.6 million in 9M 2011 (9M 2010: EUR 21.6 million) due to higher depreciation expenses arising from investments in the new operating capacities. Net income was down 25.0% yoy to EUR 5.8 million in Q3 2011 (Q3 2010: EUR 7.7 million) and 22.0% yoy to EUR 12.6 million in 9M 2011 (9M 2010: EUR 16.2 million) and primarily reflects an increase in depreciation and foreign currency translation losses on the inter-company euro-denominated loans which C.A.T. oil AG grants to its subsidiaries for investment purposes on a long-term basis. Cash flow reflects business expansion, equity ratio remains strong In 9M 2011, funds from operations went down 11.2% yoy to EUR 40.4 million (9M 2010: EUR 45.5 million) primarily due to a lower pre-tax profit. Cash flow from operating activities was a net inflow of EUR 30.1 million (9M 2010: net inflow of EUR 45.0 million) due to the higher net working capital which was driven by investments. Capital expenditure rose 186.3% yoy to EUR 83.0 million (9M 2010: EUR 29.0 million) primarily due to investments in the new rigs. Cash flow from investing activities was a net outflow of EUR 81.8 million (9M 2010: net outflow of EUR 24.8 million). Cash flow from financing activities was a net inflow of EUR 52.3 million in 9M 2011 (9M 2010: net outflow of EUR 12.9 million) mainly due to an increase in long-term borrowings for investment purposes. As of 30 September 2011, cash and cash equivalents amounted to EUR 32.8 million (31 December 2010: EUR 34.1 million). C.A.T. oil´s equity ratio remained at a comfortable level of 65.4% as of 30 September 2011 (31 December 2010: 83.2%) Outlook for the full year 2011 specified In Q3, C.A.T. oil obtained new orders and extensions to the existing contracts from its customers for 2011. Therefore, the Company anticipates that despite the routine seasonal slowdown in Q4 the operating activity levels will stay at least at par with Q4 2010 this year. In addition, based upon the positive developments during the first nine month, C.A.T. oil specifies its outlook for the full year 2011 and expects revenues between EUR 260 million and EUR 270 million (based on a euro/rouble exchange rate of 41). Despite cost pressures from foreign exchange rates and the expansion into conventional drilling, C.A.T. oil remains committed to profitable growth and aims at an EBITDA margin of between 21% and 22% for the full year 2011. The Company is currently actively engaged in the 2012 tendering campaign. Despite the current turbulences on the global capital markets and the economic uncertainties, the macroeconomic environment in Russia and Kazakhstan is stable and customers are planning with extended working programs. As a consequence, at this point in time C.A.T. oil views the incremental service orders for 2012 as positive. 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 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. From January to September 2011, the Company employed an average of 2,373 people, most of which are based in Russia and Kazakhstan. Key financial figures for 9M 2011 [million EUR] 9M 2011 9M 2010 Change in % Revenues 209.7 173.8 20.6 Cost of sales 177.4 140.7 26.1 Gross profit 32.3 33.1 -2.6 EBITDA 45.9 43.5 5.7 EBITDA margin (%) 21.9 25.0 EBIT 18.6 21.6 -14.0 EBIT margin (%) 8.9 12.5 Net income 12.6 16.2 -22.0 Earnings per share (EUR) 0.259 0.332 -22.0 Equity Ratio (%) (1) 65.4 83.2 Cash flow from operating activities 30.1 45.0 -33.0 Cash flow from investing activities -81.8 -24.8 >100 Cash flow from financing activities 52.3 -12.9 >100 Cash and cash equivalents (1) 32.8 34.1 -3.8 Total job count 2,578 2,255 14.3 Per-job revenue (thou. EUR) 81.0 76.0 6.3 Employees 2,373 2,427 -2.2 (1) As of 30 September 2011 and 31 December 2010 respectively Key financial figures for Q3 2011 [million EUR] Q3 2011 Q3 2010 Change in % Revenues 74.7 65.4 14.3 Cost of sales 61.4 51.5 19.2 Gross profit 13.3 13.9 -4.0 EBITDA 18.9 16.6 13.8 EBITDA margin (%) 25.3 25.4 EBIT 8.7 9.3 -6.7 EBIT margin (%) 11.6 14.2 Net income 5.8 7.7 -25.0 Earnings per share (EUR) 0.118 0.158 -25.0 Cash flow from operating activities 14.1 11.5 21.9 Cash flow from investing activities -38.4 -15.8 >100 Cash flow from financing activities 34.7 -9.0 >100 Total job count 930 846 10.0 Per-job revenue (thou. EUR) 80.0 77.0 4.0 Further inquiry note: Thomas Krammer Tel: +49(0)69-92037-183 Email: thomas.krammer@fticonsulting.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