VIENNA--(BUSINESS WIRE)--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 half of 2012. C.A.T. oil realized strong revenue and EBITDA growth which was primarily stimulated by strong demand for its services, the increased per job revenue and operational efficiency. In addition, the Group has almost completed the set up of its third core service line of high class conventional drilling and to date has eight out of nine drilling rigs in operation. Based on the successful performance in the first six months of the year, C.A.T. oil remains optimistic. Consequent to the latest additions, the order book for full year 2012 totaled EUR 307 million as of 30 August 2012, and C.A.T. oil expects to exceed prior-year’s performance.
Manfred Kastner, CEO of C.A.T. oil, commented: ”We have successfully capitalized on the positive economic environment and our strong market position to further drive growth. Due to strong demand and a high share of large and complex jobs we were able to push our revenues by about 17% and to increase EBITDA by one fourth compared to the first six months of 2011. At the same time we remained fully dedicated to further set up high class conventional drilling. All of our rigs have successfully been marketed and during the second quarter we took four more rigs into operations. Going forward, C.A.T. oil will operate with a very well diversified portfolio and provide even more services out of one hand. This makes us an even more valuable and reliable partner for our customers. Although the economic and financial crisis in the euro zone continues and impacts confidence in certain regions, dynamics in our markets are intact. We won additional tenders and are confident that we will be granted additional orders during the third and fourth quarter. We are therefore confident to outperform both, revenues and EBITDA of the prior year.”
Revenue increase of 16.9%
C.A.T. oil grew its revenues by 16.9% yoy to EUR 157.8 million (H1 2011: EUR 135.0 million), stimulated by an increase in job counts of 1.8% yoy to 1,677 jobs (H1 2011: 1,648 jobs) and a 13.7% yoy rise in the average per job revenue to TEUR 93 (H1 2011: TEUR 81). The number of fracturing jobs rose by 4.1% yoy and the number of sidetrack drilling jobs decreased by 12.7% yoy due to the greater share of lengthy horizontal sidetracks. Growth of average revenues per job was driven by the greater size and complexity of jobs, as well as a higher share of turnkey jobs and further contribution by the new high class conventional drilling service.
Cost base developed at a lower rate than revenues
Despite the increased operating activity levels and inflationary pressures, cost of sales rose only by 14.5% yoy to EUR 132.8 million (H1 2011: EUR 116.0 million). Key drivers for the development mainly were the greater operating leverage and efficiency gains. The Company’s total weighted average headcount went up by 2.8% to 2,428 employees (H1 2011: 2,362 employees) primarily driven by the latest hires for the new high class conventional drilling business.
EBITDA margin up to 21.4%
EBITDA increased by 25.1% yoy to EUR 33.8 million (H1 2011: EUR 27.0 million) primarily driven by the strong revenue growth and the disproportionally lower development of cost of sales. The EBITDA margin expanded to 21.4% yoy in H1 2012 (H1 2011: 20.0%).
The Company’s earnings before interest and tax (EBIT) went up 30.4% yoy to EUR 13.0 million (H1 2011: EUR 10.0 million) resulting in the EBIT margin of 8.2% (H1 2011: 7.4%).
Net result impacted by extraordinary effects and higher tax rate
The solid operational performance is not fully reflected in net income, which decreased by 3.0% yoy to EUR 6.7 million during the reporting period (H1 2011: EUR 6.9 million). The decline was mainly due to the following three reasons: the negative financial result, provisions for the seismic operations in India and a higher corporate tax rate.
The Company’s net financial result amounted to EUR -2.6 million (H1 2011: EUR 0.2 million) and was primarily impacted by increased interest expenses, unrealized and realized foreign currency translation losses related to inter-company loans, as well as credit facilities in US-dollars for the payments of the new high class conventional drilling rigs.
Although the Indian operations only account for a very small portion of the Group’s business and consist of seismic services only, C.A.T. oil took steps to prepare for the currently difficult situation in the Assam region. During the second quarter Assam faced the increased political instability and violent excesses which also impacted C.A.T. oil’s operations. As it is currently unclear how this volatile situation will develop C.A.T. oil has preventively formed reserves and provisions in the total amount of EUR 2.1 million.
Ongoing strong cash generation
Funds from operations increased by 21.0% yoy to EUR 28.7 million (H1 2011: EUR 23.7 million) primarily reflecting the combined effect of the higher pre-tax profit and depreciation as well as the lower cash taxes. Cash flow from operating activities was a net inflow of EUR 22.5 million (H1 2011: net inflow of EUR 16.1 million) due to the higher funds from operations and the lower investments in net working capital. Capital expenditure went down 70.8% yoy to EUR 12.9 million (H1 2011: EUR 44.4 million) reflecting the lower investment plans for 2012. In total C.A.T. oil has budgeted EUR 30 million for 2012 to finalize the set up of the new high class conventional drilling business and to maintain capacities in good working order. Cash flow from investing activities was a net outflow of EUR 11.7 million (H1 2011: net outflow of EUR 43.4 million). Cash flow from financing activities was a net outflow of EUR 12.5 million in H1 2012 (H1 2011: net inflow of EUR 17.5 million) mainly due to an early redemption of long-term borrowings and an increase in cash dividend paid.
As of 30 June 2012, cash and cash equivalents stood at EUR 28.3 million (31 December 2011: EUR 30.4 million). C.A.T. oil maintained a healthy balance sheet with an equity ratio of 61.3% as of 30 June 2012 (31 December 2011: 62.3%).
Confident outlook for FY 2012
Based on the strong performance during the first six months and additional orders bringing up the order book to EUR 307 million (based on a rouble-to-euro exchange rate of 40) for full year 2012, C.A.T. oil remains optimistic with respect to the second half of 2012. Although the unsolved sovereign debt crisis has called for further cautiousness in certain regions of Europe, C.A.T. oil currently sees ongoing solid demand for its services in its markets. In addition, the oil price is at a high level and supports upstream activities as well as investments of customers. C.A.T. oil therefore is confident to exceed the prior year revenue and earnings growth. Assuming stable energy prices and costs as well as no material deterioration of the economic situation in our its markets, the Company expects revenues in the range of EUR 300 to 320 million and EBITDA in the range of EUR 67 to 73 million (based on a rouble-to-euro exchange rate of 40) for full year 2012.
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Key financial figures for H1 2012 |
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| [million EUR] | H1 2012 | H1 2011 | Change in % | |||||||||
| Revenues | 157.8 | 135.0 | 16.9 | |||||||||
| Cost of sales | 132.8 | 116.0 | 14.5 | |||||||||
| Gross profit | 25.0 | 19.0 | 31.7 | |||||||||
| EBITDA | 33.8 | 27.0 | 25.1 | |||||||||
| EBITDA margin (%) | 21.4 | 20.0 | ||||||||||
| EBIT | 13.0 | 10.0 | 30.4 | |||||||||
| EBIT margin (%) | 8.2 | 7.4 | ||||||||||
| Net income | 6.7 | 6.9 | -3.0 | |||||||||
| Earnings per share (EUR) | 0.136 | 0.140 | -3.0 | |||||||||
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Equity Ratio (%)1 |
61.3 | 62.3 | ||||||||||
| Cash flow from operating activities | 22.5 | 16.1 | 39.8 | |||||||||
| Cash flow from investing activities | -11.7 | -43.4 | -72.9 | |||||||||
| Cash flow from financing activities | -12.3 | 17.5 | >-100 | |||||||||
| Cash and cash equivalents1 | 28.3 | 30.4 | -6.9 | |||||||||
| Total job count | 1,677 | 1,648 | 1.8 | |||||||||
| Per-job revenue (thou. EUR) | 93 | 81 | 13.7 | |||||||||
| Employees | 2,428 | 2,362 | 2.8 | |||||||||
1 As of 30 June 2012 and 31 December 2011 respectively