Schoeller-Bleckmann Oilfield Equipment AG: Clearly positive annual result 2009 despite downturn in oilfield service industry – Proposed dividend EUR 0.50 following EUR 0.75 

Ternitz/Vienna, 10 March 2010. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, announces the key figures for the fiscal year 2009 at its annual press conference. Despite an extremely difficult market environment SBO achieved a clearly positive annual result in 2009. 

Group sales in fiscal 2009 amounted to MEUR 251.6, following MEUR 388.7 in record year 2008, declining by 35.3 %. Earnings before interest, taxes, depreciation and amortization (EBITDA) arrived at MEUR 61.5, down 46.1 % from last year’s MEUR 114.2. Profit before tax fell by 71.6 % to MEUR 23.5, following MEUR 82.5 in the year before. Profit after tax stood at MEUR 15.3, decreasing by 74.0 % from MEUR 58.8 in 2008. In view of the overall recession, the EBIT margin of 11.2 % and EBITDA margin of 24.4 % generated in fiscal 2009 reflect a remarkable business performance.  

The Executive Board will propose to the forthcoming Annual General Meeting a distribution of EUR 0.50 (following EUR 0.75) per share. Based on the current stock price, this equals a dividend yield of approximately 1.3 %.  

„Fiscal 2009 was the most challenging year in the history of SBO. Within only a few weeks, we had to decelerate our business from several years of full-throttle to now low-throttle operation, almost running idle. In doing so, our aim was to secure the corporate assets and investments made in our team over the past years so as to be prepared for the upswing whenever it may set in“, comments Gerald Grohmann, CEO of SBO, on fiscal 2009. „We expect demand in the oilfield service industry to pick up again as soon as the economy and demand for oil recovers. SBO has coped well with the downturn in 2009 and is ready to fully benefit from a new upswing“, says Mr. Grohmann on the company’s prospects. 

Market development 2009

In 2009, in the wake of international recession, global energy consumption declined for the first time since 1981. According to the International Energy Agency (IEA) global demand for oil went from 86.2 million barrels a day in 2008 to 84.9 million barrels a day in 2009. The resulting excess supplies of crude oil in the world market prompted oil companies to immediately cut their exploration and production budgets. 

The global rig count, a major indicator of activities in the oilfield service industry, fell to its low of 1983 units in May 2009, declining 44 % from its peak of 3557 rigs in 2008. This marked the steepest decline since the 1980s.

Extensive package of measures implemented

SBO responded to the changed overall conditions and the resulting drop in bookings by launching a comprehensive package of measures. Cost-cutting measures were implemented, capital expenditures were curtailed or postponed and services were sourced back in, partly setting off declining orders. The declared aim of those immediately taken measures was to save approximately MEUR 25 annually. It was largely achieved during the year and was a decisive factor for SBO to generate a clearly positive full-year result.  

Aggregate bookings in 2009 arrived at MEUR 111.1 (following MEUR 367.3 in the year before), the order backlog at year-end was MEUR 76 (following MEUR 214 at the end of fiscal 2008). Basically all segments and world regions were confronted with declining orders. Less affected was the drilling motor business of SBO subsidiary BICO Drilling Tools Inc., where drops were moderate. SBO still benefits from the high acceptance of the new drilling motor „Spiro Star“.  

Due to sharply reduced drilling activities, the Service & Supply Shops also had to cope with declining orders. However, SBO’s regional site in Russia, where unlike other regions drilling activities stood at a relatively high level, developed quite positively.  

The SBO share: Up 42.9 % in the course of 2009

In 2009, the SBO share started at a rate of EUR 23.50 per share, performing in line with the overall ATX development. Over the year, it climbed 42.9 % to EUR 33.59 per share at year-end. The annual low was EUR 18.78 per share on 9 March 2009, and on 16 October 2009 the share reached its annual high of EUR 35.72.  

In the course of the year, Schoeller-Bleckmann Oilfield Equipment AG improved its ATX ranking from 16 in January to 14 in December 2009. 

Outlook for 2010

Global demand for oil is generally expected to slightly pick up again in 2010. The extent of growth depends on the actual rate and intensity of economic recovery, notably in the USA, and China’s further economic momentum.  

The current oil price level and modest increase in demand suggest that exploration and production spending of oil companies will further increase in 2010, provided that the global economic recovery that has started to slowly set in will continue.  

Schoeller-Bleckmann Oilfield Equipment expects to see a continuation of business consolidation in the first months of 2010. From today’s perspective, last year’s measures to reduce capacities were sufficient. SBO could handle even an extended period of stagnating or only slightly recovering bookings with its current structure. This position is demonstrated by the sound balance sheet, low debt and high liquidity of the company.  

Being a financially sound company holding an excellent market position, SBO also is exploring options for acquisitions. In any event, SBO is perfectly equipped today to fully benefit from market recovery as soon as it may set in. Due to the fundamental conditions in the oil and gas market, this recovery is bound to occur, its actual point in time depending on the dynamism and robustness of the global upswing, and is therefore difficult to predict. In the medium to long run, the ever more challenging exploration of new oil reservoirs accompanied by declining production rates of existing oil fields will inevitably lead to yet another continuous growth in demand for high-precision components for the oilfield service industry. 

* proposed 
 

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 1056 worldwide (31 December 2008: 1394), thereof 314 in Ternitz/Austria and 447 in North America (including Mexico). 

Further inquiry note:
Gernot Bauer, Head of Investor Relations
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz, Hauptstraße 2
Tel: +43 2630/315 ext 250, fax ext 501
E-mail: g.bauer@sbo.co.at 

 

SBO financial calendar 2010

28 April 2010	Annual General Meeting
12 May 2010	Ex-dividend day, dividend payment date
19 May 2010	Result 1st quarter 2010
18 August 2010	Result half-year 2010
17 November 2010	Result 3rd quarter 2010

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