EANS-News: C.A.T. oil achieved all-time high in job count, profitability and
earnings in Q3 2014
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Subtitle: Despite the rouble devaluation, revenues improved 7.0% yoy to EUR
120.7 million in Q3 2014
The Q3 2014 EBITDA went up 16.6% yoy to EUR 38.8 million with the EBITDA
margin expanding to 32.2%
Net income surged 40.9% yoy to EUR 23.9 million in Q3 2014
CEO Manfred Kastner: Due to our stellar performance during the third quarter
and the first nine months as well as a good start into Q4 we reiterate our 2014
guidance despite the challenging environment.
quarterly report
Vienna, 27 November 2014 - C.A.T. oil AG (O2C, ISIN: AT0000A00Y78), one of the
leading providers of oil and gas field services in Russia and Kazakhstan,
successfully continued on its profitable growth track in the third quarter. The
Company successfully boosted revenues and achieved a significant earnings growth
despite persisting geopolitical instabilities. C.A.T. oil benefited from
positive demand dynamics among its customers and high operating activities.
Moreover, the Group further improved efficiency and maintained tight cost
management.
Manfred Kastner, CEO of C.A.T. oil, commented: "Although we faced more headwinds
due to geopolitics, negative currency effects and lower oil prices, we were able
to further accelerate our operating performance and earnings growth. Driven by
ongoing strong demand for our services we reached an all-time high in Q3
activity levels. With our strong earnings growth and profitability we delivered
best-in-class levels in the Russian OFS sector. Thus, due to our stellar
performance during the third quarter and the first nine months as well as a good
start into Q4 we reiterate our 2014 guidance despite the challenging
environment."
Improved Q3 2014 revenues despite negative currency effects
The Russian rouble, which the prevailing majority of C.A.T. oil's service
contracts are denominated in, devaluated against the Euro by more than 15% yoy
during the first nine months of the year. Therefore, the Company's top-line
growth lagged behind the increase in operating activity levels. Nonetheless, the
Company was able to boost its revenues by 7.0% yoy to EUR 120.7 million (Q3
2013: EUR 112.8 million). The total service job count increased by 17.3% yoy to
1,258 jobs in Q3 (Q3 2013: 1,072 jobs) but the average per job revenue declined
8.8% yoy to TEUR 96 (Q3 2013: TEUR 105) due to the lower value of the rouble. On
a nine month basis revenues stayed effectively flat yoy at EUR 323.9 million
(Q1-3 2013: EUR 322.9 million). The Company's total service job count rose by
12.8% yoy to 3,315 jobs (Q1-3 2013: 2,938 jobs).
Growth in the Q3 2014 operating activities across all operating and reporting
segments
Well Services' revenues increased by 9.5% yoy to EUR 65.6 million in Q3 2014 (Q3
2013: EUR 59.9 million). Driven by a strong expansion in fracturing operations,
the segment's job count rose by 17.7% yoy to 1,186 jobs (Q3 2013: 1,008 jobs).
The average per job revenue decreased 7.0% yoy to TEUR 55 (Q3 2013: TEUR 59),
reflecting the rouble devaluation. The share of multi-stage fracturing jobs in
the total fracturing job count surged to 27.6% in Q3 2014 (Q3 2013: 6.7%).
Drilling, Sidetracking and IPM was also able to offset partly negative currency
effects by further maximising operating activity levels and enhance revenues by
3.8% yoy to EUR 55.7 million in Q3 2014 (Q3 2013: EUR 53.6 million). The
segment's job count staged a 12.1% yoy rise in the job count to 72 wells and
sidetracks (Q3 2013: 64 jobs), whereas the total drilling and sidetracking
footage accelerated by 47,7% yoy to 113.2 thousand meters (Q3 2013: 76.6
thousand meters). The share of horizontal wells and sidetracks contracted
insignificantly to 39.2% of the total (Q3 2013: 40.8%)
Profitability at the record level with the EBITDA margin widened to 32.2%
While the revenue growth was hampered by the continued rouble devaluation,
C.A.T. oil benefited from high capacity utilization, efficiency gains and
disciplined cost management and was again able to strengthen its earnings power.
Cost of sales increased only by 1.9% yoy to EUR 89.9 million in the very busy Q3
2014 (Q3 2013: EUR 88.2 million) but decreased by 3.1% yoy to EUR 250.8 million
in Q1-3 (Q1-3 2013: EUR 258.8 million).
Earnings before interest, tax, depreciation and amortization (EBITDA) rose by
16.6% yoy to EUR 38.8 million in Q3 2014 (Q3 2013: EUR 33.3 million), with the
EBITDA margin reaching a record level of 32.2% (Q3 2013: 29.5%). In Q1-3 2014,
EBITDA rose by 9.1% yoy to EUR 93.8 million (Q1-3 2013: EUR 86.0 million) and
the EBITDA margin widened to 28.9% compared to 26.6% in the corresponding
reporting period of the previous year.
Earnings before interest and tax (EBIT) accelerated at a faster pace by 23.3%
yoy to EUR 26.1 million in Q3 2014 (Q3 2013: EUR 21.2 million) and by 20.7% yoy
to EUR 58.4 million in the first nine months (Q1-3 2013: EUR 48.4 million). The
EBIT margin expanded to 21.6% in Q3 2014 (Q3 2013: 18.8%) and 18.0% in Q1-3 2014
(Q1-3 2013: 15.0%).
C.A.T. oil's weighted average headcount was 2,920 employees in Q1-3 2014 (Q1-
3 2013: 2,673 employees). The increase in the headcount by 9.2% yoy reflected
additions of managerial, engineering and crew personnel to the Company's
Drilling, Sidetracking and IPM operating and reporting segment.
Net income surged by 40.9% yoy in Q3 2014
The Group's net income increased considerably by 40.9% yoy to EUR 24.0 million
in Q3 (Q3 2013: EUR 17.0 million) and 28.8% yoy to EUR 49.2 million in Q1-3 2014
(Q1-3 2013: EUR 38.2 million).
Strong financial position despite a material ramp up in investments
C.A.T. oil's gross cash flow surged by 10.0% yoy to EUR 31.9 million in Q3 2014
(Q3 2013: EUR 29.0 million) and by 10.8% yoy to EUR 80.7 million in the nine
month period (Q1-3 2013: EUR 72.8 million). Cash flow from operating activities
however diminished by 16.8% yoy to EUR 24.3 million in Q3 2014 (Q3 2013: EUR
29.2 million) and 33.9% yoy to EUR 50.7 million in Q1-3 2014 (Q1-3 2013: EUR
76.8 million) because of the higher working capital requirements. Cash payments
for the ordered operating capacities more than quadrupled yoy to EUR 39.6
million in Q3 2014 (Q3 2013: EUR 9.3 million) and more than doubled yoy to EUR
81.7 million in Q1-3 2014 (Q1-3 2013: EUR 40.4 million). Cash flow from
investing activities resulted in a net outflow of EUR 39.5 million in Q3 2014
(Q3 2013: EUR 8.9 million) and EUR 81.2 million in Q1-3 2014 (Q1-3 2013: EUR
38.1 million). Cash flow from financing activities was a net inflow of EUR 8.8
million (Q3 2013: net outflow of EUR 34.6 million) and EUR 23.1 million in Q1-
3 2014 (Q1-3 2013: net outflow of EUR 41.4 million).
As of 30 September 2014, cash and cash equivalents were down 25.8% to EUR 31.7
million from EUR 42.6 million as of 31 December 2013. C.A.T. oil maintained a
solid balance sheet with an equity ratio of 60.3% as of 30 September 2014 (31
December 2013: 71.4%).
2015 capacity expansions in line with market developments
Assuming the average rouble-to-euro exchange rate of 50 for 2014 and 57 for
2015-16, C.A.T. oil's 2014-2016 total order book stood at EUR 747 million as of
27 November 2014 (28 August 2014: EUR 785 million assuming the 2014-16 flat
average rouble-to-euro exchange rate of 48). The tender campaign for the next
year and beyond has just begun and C.A.T. oil is highly motivated to win
additional assignments. Based upon the initial talks with customers the Company
expects healthy demand for its services in 2015.
The EU and US sanctions do not impede C.A.T. oil's business as it has never been
engaged in the restricted activity areas such as Arctic offshore, deep water or
shale oil projects, and C.A.T. oil does not plan to change the course of its
business going forward. At the same time geopolitics, lower energy prices and
soft rouble are currently major challenges for the sector. The Company has
therefore decided to watch carefully the market developments and hold up the
decision on its 2015 capital expenditures until the end of Q1 2015. This should
allow the Company to get greater insights of customers' future plans and ensure
the best possible utilization of its operating capacities.
Year-to-date, the Company added two drilling and two sidetracking rigs as well
as one fracking fleet to its operations and plans to put one more drilling rig
into operations before the yearend. The remaining three drilling rigs and two
sidetracking rigs will be mobilized to customers' sites in Q1 2015.
Management reiterates guidance
Based on C.A.T. oil's strong nine month results and the good start into Q4,
management is confident in the Company's robust operating and financial
performance. Despite the adjustment of the 2014 forecast average rouble-to-euro
exchange rate to 50 from 48 (as of 28 August 2014), management reiterates its
guidance for the Full Year 2014. The Company continues aiming at revenues
between EUR 420 and 450 million which are expected to come out at the lower end
of the range due to the currency headwinds. Furthermore, the Company confirms
its EBITDA target of EUR 113-121 million. Based on the top-line growth,
efficiency gains and a favorable revenue mix, management sees a good chance of
hitting the upper part of the forecast EBITDA range.
In respect to the announced, but not yet launched mandatory takeover offer of
Joma Industrial Source Corp. the Company refers to updates on its website,
www.catoilag.com, where news, press releases and other publications in this
context can be found.
www.catoilag.com
Press contact:
FTI Consulting
Carolin Amann
Phone: +49 (0)69 92037-132
Email: carolin.amann@fticonsulting.com
Steffi Susan Kim
Phone: +49 (0)69 92037-115
Email: steffi.kim@fticonsulting.com
About C.A.T. oil AG:
C.A.T. oil AG is one of the leading independent oil and gas field service
contractors in Russia and Kazakhstan and is listed on the Frankfurt Stock
Exchange (SDAX). C.A.T. oil provides a range of high quality services, which
enable oil and gas producers to extend lifecycle of their fields or bring yet
unexploited oil and gas reserves to production.
Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built up a
leading hydraulic fracturing service, a very effective method of well
stimulation by cracking rock formations with pressurized fluids, in Russia and
Kazakhstan. Following its IPO in 2006, the Company developed a second core
service of sidetrack drilling in 2006-08 and has established a strong presence
in Russia's sidetrack drilling market. Sidetrack drilling is a term used to
describe drilling of a new wellbore from the upper section of an existing well.
In 2011-12, the Company launched the next phase of its growth and
diversification strategy and set up high class drilling operations as a third
core service offering. High class drilling is the classical technology of
drilling vertical, inclined and horizontal wells for extraction of oil and gas.
In total, the Company has already invested more than EUR 450 million in growth
and diversification since its IPO in 2006.
Following the successful set up of high class drilling in 2011-12, C.A.T. oil
introduced its new segment reporting in 2013 clustering its activities in "Well
Services" (fracturing, cementing and completion operations) and "Drilling,
Sidetracking and IPM (Integrated Project Management)".
C.A.T. oil's customer base includes the leading Russian and Kazakh oil and gas
producers such as Rosneft, Lukoil, Gazprom Neft, Tomskneft VNK, Slavneft,
Russneft and KazMunaiGaz. The Company has long-standing relationships with these
customers and has been a reliable service provider since its market entrance in
the early nineties.
C.A.T. oil has its headquarters in Vienna. The Company's 9M 2014 weighted
average headcount stood at 2,920 people, most of which are based in Russia and
Kazakhstan.
Key financial figures for Q1-Q3 2014
[million EUR] Q1-Q3 2014 Q1-Q3 2013 Change (%)
Revenues 323.9 322.9 0.3
Cost of sales 250.8 258.8 -3.1
Gross profit 73.1 64.1 14.0
EBITDA 93.8 86.0 9.1
EBITDA margin (%) 28.9 26.6
EBIT 58.4 48.4 20.7
EBIT margin (%) 18.0 15.0
Net income 49.2 38.2 28.8
Earnings per share 1.01 0.78
(EUR)
Equity Ratio (%)[1] 60.3 71.4
Cash flow from 50.7 76.8 -33.9
operating activities
Cash flow from -81.2 -38.1 113.3
investing activities
Cash flow from 23.2 -41.4 -155.8
financing activities
Cash and cash 31.7 42.6 -25.8
equivalents [1]
Total job count 3,315 2,938 12.8
Per-job revenue (thou. 98 110 -11.1
EUR)
Employees 2,920 2,673 9.2
[1] As of 30 September 2014 and 31 December 2013 respectively
Key financial figures for Q3 2014
[in million EUR] Q3 2014 Q3 2013 Change (%)
Revenues 120.7 112.8 7.0
Cost of sales -89.9 -88.2 1.9
Gross profit 30.9 24.7 25.3
EBITDA 38.8 33.3 16.6
EBITDA margin (%) 32.2 29.5
EBIT 26.1 21.2 23.3
EBIT margin (%) 21.6 18.8
Net income 24.0 17.0 40.9
Earnings per share 0.49 0.35
(EUR)
Cash flow from 24.3 29.2 -16.8
operating activities
Cash flow from -39.5 -8.9 343.3
investing activities
Cash flow from 8.8 -34.6 -125.5
financing activities
Total job count 1,258 1,072 17.3
Per-job revenue 96 105 -8.8
(thou. EUR)
Further inquiry note:
Carolin Amann Tel: +49(0)69-92037-132 Email: carolin.amann@fticonsulting.com
Steffi Susan Kim Tel: +49(0)69-92037-115 Email: steffi.kim@fticonsulting.com
end of announcement euro adhoc
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company: C.A.T. oil AG
Kärntner Ring 11-13
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
