Schoeller-Bleckmann Oilfield Equipment AG: Another absolute record business year – proposed dividend EUR 1.10 following EUR 0.80 per share – favourable company development expected in 2008
Ternitz/Vienna, 12 March 2008. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, has specified at the annual results press conference the preliminary figures for fiscal 2007 announced in January. Groups sales of MEUR 317.4 surpassed last year’s level of MEUR 239.5 by 33 %. Profit before tax went up 55 % from MEUR 46.8 (2006) to MEUR 72.5 at the end of fiscal 2007. Net income arrived at MEUR 50.0, increasing by 45 % year-on-year (MEUR 34.4). Due to the excellent result, SBO will propose to the Annual Shareholders’ Meeting in April 2008 to increase the distribution to EUR 1.10 per share, following EUR 0.80 per share last year. The favourable company development is expected to continue throughout 2008.
„We achieved two record years in a row and seamlessly followed on fiscal 2006, which had already been an excellent year for our company. All corporate fundamentals were again significantly improved and the course of growth of our company both in terms of sales and profit was consolidated,“ comments Gerald Grohmann, CEO of SBO, on the business development in 2007.
Implementation of the strategic investment programme launched around three years ago was continued speedily in 2007. The major milestones in the process were the commissioning of the new rotary forging machine at the Ternitz site and massive additions to the production equipment in North America and Austria. „The first highlight of our investment programme will be the start-up of our new production plant in Ternitz still before the end of the first quarter of 2008,“ says Gerald Grohmann. Over the past three years, an aggregate investment programme of MEUR 118.0 was implemented. Taking into account the capital investment for already approved projects this sum totals no less than MEUR 150.0.
Market development 2007
As a result of the vivid demand for energy in recent years and the declining production rates of existing oil fields, capital expenditures to develop new reservoirs and to improve the recovery rate of existing oil fields started were increased massively. Consequently, the dynamic business cycle in the oilfield service industry remained in full swing in 2007. The „rig count“ (number of active drilling rigs), an indicator of worldwide drilling activities, went from 3043 to an average of 3116 units in 2007.
Schoeller-Bleckmann used the upturn in the oilfield service industry in 2007 to the full extent. The company benefits both from higher demand and the growing complexity of production technologies, further intensifying demand for SBO’s high-tech components. Amounting to MEUR 341 in fiscal 2007, bookings remained at almost the same level as in 2006, when they had stood at MEUR 349. They concerned all segments and regions alike. At the reporting date, the order backlog had arrived at MEUR 249, following MEUR 241 in the year before.
Another absolute record year
Schoeller-Bleckmann managed the large number of bookings in 2007 by ensuring efficient utilisation of the production facilities and deployment of human resources. These efforts included further productivity increases, extension of working hours with additional shifts and overtime and recruitment of new staff.
On the cost side – a consequence of the industry cycle – it was mainly the increase in wages in North America that had to be absorbed. However, both these additional expenses and the rising costs of stainless steel could be accommodated in prices. Physical supplies of raw materials were secured by delivery contracts with steel mills and dealers.
Both product segments, high-precision components and oilfield supplies and services, reported significant sales increases in fiscal 2007. The segment of high-precision components achieved an increase of 27 %, while sales in oilfield supplies and services grew by approximately 44 %. Gross profit amounted to MEUR 98.9 (following MEUR 72.3, up 37 %). The gross margin was again improved, from 30.2 % in the year before to 31.2 %. The EBIT margin stood at 24.0 %, after 20.1 % in 2006. This favourable development resulted both from price increases and economy of scale from the full utilisation of capacities.
Cash-flow from the profit was substantially improved from MEUR 47.1 in 2006 to MEUR 67.9. Expenditures for property, plant and equipment in 2007 were MEUR 66.0 (2006: MEUR 28.8), of which MEUR 37.8 were used for the business segment of high-precision components (2006: MEUR 13.4), mainly for acquiring real estate for the US production companies, the new production facilities in Ternitz/Austria and for buying precision production equipment. Expenditures for the business segment of oilfield supplies and services amounted to MEUR 25.9 (2006: MEUR 15.2) and were used primarily for the acquisition of the rotary drilling machine and deep-hole drilling machines in Ternitz as well as additions to the drilling motor rental fleet.
SBO share – ATX top performing share in 2007
As before, the share of Schoeller-Bleckmann continued its stock market track record and even surpassed itself as the best-performing ATX member in 2007. The share reached its all-time annual closing high of EUR 75.00 in October 2007, while the all-time intraday high of EUR 75.49 went even slightly further. Achieving a stock performance of 77 %, the SBO share ended the 2007 stock market year at EUR 61.57 (closing price 2006: EUR 34.76) on 28 December 2007. The value increase since the share was listed on the Vienna Stock Exchange in March 2003 is 578 % (first listed price on 27 March 2003: EUR 9.08).
The Executive Board will propose to the Annual Shareholders’ Meeting to be held on 16 April 2008 to increase the dividend from EUR 0.80 in the year before to EUR 1.10 (base dividend EUR 0.50 plus a bonus of EUR 0.60). This marks a record distribution for 2007 of MEUR 17.6 (up 38 % from MEUR 12.8 in 2006).
Outlook for 2008
Provided that the dynamic economic development of the emerging markets continues and the global economy is not weakened substantially, it is safe to assume that the current upward cycle in the oilfield service industry will be sustained. Due to the high oil price level development of new oil reserves under difficult and costly production conditions will become more attractive.
SBO started into the new fiscal year with a record order backlog of MEUR 249 at the end of 2007. In 2008, SBO will continue the course of growth oriented along the current cycle of the oilfield service industry by commissioning the new plant at the Ternitz site and by pursuing the company’s investment policy at the other locations.
Apart from corporate growth and the development of the market environment, the EUR/USD exchange rate will have a major impact on bottom-line results. One of the key challenges for SBO in fiscal 2008 will be optimal human resources management to sustain the course of growth.
On the whole, Schoeller-Bleckmann expects to see continuation of the favourable development of the company in 2008.
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Key financial figures: |
|
|
|
|
|
|
2007 |
2006 |
|
Sales |
MEUR |
317.4 |
239.5 |
|
EBIT |
MEUR |
76.1 |
48.2 |
|
EBIT margin |
% |
24.0 |
20.1 |
|
Profit before tax |
MEUR |
72.5 |
46.8 |
|
Net income |
MEUR |
50.0 |
34.4 |
|
Cash-flow from the profit |
MEUR |
67.9 |
47.1
|
|
Capital expenditure |
MEUR |
66.0 |
28.8 |
|
Earnings per share |
EUR |
3.13 |
2.15 |
|
Dividend per share |
EUR |
1.10* |
0.80 |
|
Headcount |
Number |
1222 |
1086 |
* suggested
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 1222 worldwide (31 December 2006: 1086), 375 in Ternitz/Austria and 603 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 101
E-mail: g.bauer@sbo.co.at
Mick Stempel, Hochegger|Financials
Tel: +43 1/504 69 87 ext 85
E-mail: m.stempel@hochegger.com
Financial calendar 2008
16 April 2008 Annual Shareholders’ Meeting
30 April 2008 Ex-dividend date, dividend payment date
20 Mai 2008 Result 1st quarter 2008
21 August 2008 Result 2nd quarter 2008
20 November 2008 Result 3rd quarter 2008
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