Investor Relations

 

 Ternitz, August 19, 2005. The first half of the 2005 business year has proceeded quite favorably for Schoeller-Bleckmann Oilfield Equipment AG (SBO), which is listed on the Vienna Stock Exchange’s ATX share index. The pre-tax profit on ordinary activities climbed to EUR 10.6 million in the first half year of 2005, an increase of 59% compared to EUR 6.7 million posted in the comparable period of 2004. Sales rose by 10% to EUR 79.1 million, up from EUR 72 million in the first six months of last year. In the period under review, the volume of orders received increased by 22% from EUR 85.2 million to EUR 103.9 million. The backlog totalled EUR 61.7 million at the end of June 2005, significantly higher than the volume of orders amounting to EUR 45 million as of June 30, 2004. 

 

 "As expected, the continuing growth in demand for crude oil has led international oil companies to increasingly invest in developing new sources of oil. SBO has been able to optimally profit from this positive business environment", says Mr. Gerald Grohmann, Chairman of the Executive Board of Schoeller-Bleckmann Oilfield Equipment AG, in commenting on the company’s half-year business results. "The high level of demand has benefitted all our business segments and production locations, particularly our drilling motor division BICO," he added. Several months ago, the market responded quite favorably when BICO launched a new drilling motor under the brand name "Spiro Star".

 

Net income climbed 71% to EUR 7.5 million in the first two quarters of 2005, following EUR 4.4 million in the same period last year. This represents earnings per share of EUR 0.52, calculated in accordance with the increased volume of shares averaging a total of 14.5 million, following the capital increase implemented in 2005. This compares to earnings per share of EUR 0.34, based on a volume of 13 million outstanding shares in the first half of 2004. In the period under review, SBO managed to improve its business results despite a further decline in the average value of the dollar by 4.7%.   

 

Begin of investment program to boost production capacity

The capital increase which was successfully carried out in March 2005 resulted in net proceeds totalling EUR 51.8 million. As a result, the company’s equity ratio increased from 44% of the consolidated balance sheet total as of December 31, 2004 to 62% of the balance sheet total as of June 30, 2005. Part of the proceeds derived from the capital increase were used to repatriate short-term liabilities as well as for investment financing. However, most of the capital increase is designed to help finance a EUR 100 million strategic investment program on the part of Schoeller-Bleckmann Oilfield Equipment, which is scheduled to be completed by 2007. 

 

Within the framework of the planned expansion of production capacities, investments in capital equipment were significantly increased to EUR 8.1 million in the first six months of 2005, up from EUR 4.8 million in the first half of 2004. This encompassed an increase in the company’s stock of drilling motors, as well as the expansion of available machinery used in the production of high-precision components at the Ternitz and Houston production locations. SBO’s investment activities will be further intensified in the second half of 2005. The increase in production also led to a rise in the number of employees at all locations. 

 

Market remains strong - favorable outlook for SBO’s business results in 2005

For the second half of 2005, SBO expects the current business environment to remain unchanged, marked by an ongoing high level of bookings. The challenge in the upcoming months will be to effectively tailor the number of employees as well as the supply of materials to the level of demand, particularly at the company’s American production facilities. The high volume of orders will serve as the basis for an ongoing positive development in the second half of 2005. Part of the current backlog represents orders for 2006.

 

Key Figures, in MEUR

 

* On the basis of the average number of outstanding shares

**As of June 30th. Number of employees at June 30, 2004 adjusted to take account of divestiture of SBO subsidiary Bafco in the first quarter of 2005.  

 

 

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 high-performance direction drilling. SBO employs a work force of 848 people worldwide (June 30, 2004: 783; adjusted to take account of SBO’s subsidiary Bafco, which the company divested in the first quarter of 2005). 218 people are employed at company headquarters in Ternitz, Lower Austria, and 436 in North America (including Mexico).

 

Further inquiry note:

Gerald Grohmann, CEO

Schoeller-Bleckmann Oilfield Equipment AG

A-2630 Ternitz, Hauptstraße 2

Tel: +43 2630/315 ext 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