Schoeller-Bleckmann Oilfield Equipment AG: Half-year result delivers strong profitability at last year's level – Bookings rising – Earnings per share gone up

Ternitz/Vienna, 20 August 2014. Schoeller-Bleckmann Oilfield Equipment AG (SBO) posted stable business development in the first half of 2014: With clearly rising bookings, SBO generated earnings at the same level as in the first half of 2013, continuing the satisfying development seen in the first half of 2014 throughout the second quarter.

In the first half of 2014 SBO posted an increase in bookings of 13.2% to MEUR 228.5 (first half of 2013: MEUR 201.8). Half-year sales revenues in 2014 came to MEUR 230.3, largely at the same level as in the year before (2013: MEUR 235.4; -2.2% y-o-y). Earnings before interest, taxes, depreciation and amortisation (EBITDA) were MEUR 65.9, slightly below last year (2013: MEUR 68.5; -3.9%). Earnings before interest and taxes (EBIT) in 2014 of MEUR 45.7 (2013 after impairment: MEUR 42.9; +6.4%) exceeded last year's figures. Profit before tax of MEUR 41.4 (2013: MEUR 40.8; +1.6%) and profit after tax of MEUR 30.3 (2013: MEUR 28.1; +8.0%) also came in above last year's result. Half-year earnings per share of EUR 1.90 (2013: EUR 1.74; +9.4%) also were higher than last year's reading. Margins remained largely stable year-on-year: The EBITDA margin stood at 28.6% (2013: 29.1%), the EBIT margin at 19.8% (2013: 18.2%) and the pre-tax margin at 18.0% (2013: 17.3%).

Gerald Grohmann, CEO of SBO: "The sound development of the first quarter continued in the second quarter. Growing sales in the Oilfield Equipment segment helped us compensate for customers' cautious spending policy for High Precision Components. We grew bookings, sales are stable and, being a leader in technology, the company is highly profitable. With our targeted investments we are trying to strengthen our profitability."

New segment reporting

In the second quarter of 2014 SBO changed the company's previous, historically grown internal reporting by regions and adjusted its segment reporting. SBO now divides business activities into two segments: High Precision Components (production of high-precision MWD/LWD components) and Oilfield Equipment (non-magnetic drill collars, drilling motors, circulation tools and other downhole tools including service and repair work), offering customers better transparency and market-oriented reporting.

Both segments improved bookings in the first half of 2014 compared to the same period of last year and developed favourably: The Oilfield Equipment segment profited from rising global drilling activity and positive business performance for non-magnetic drill collars. In the first half of 2014, sales volumes in the High Precision Components segment were influenced by customers' reduced capital expenditure (spending for long-term capital goods).

Capital expenditure in fixed assets in the first half of 2014 amounted to MEUR 20.8 (2013: MEUR 27.6; -24.6%), spent primarily for further expanding the drilling motor fleets in the US and Canada and the circulation tools fleet of subsidiary DSI.

Outlook

According to current estimates of the International Energy Agency (IEA), global oil consumption for full 2014 will be 92.7 mb/d, which represents an increase of 1.05 mb/d from 2013. Based on weaker macroeconomic data, this was a slight downwards revision of the IEA's growth expectations of 1.23 mb/d from July. All current scenarios expect global oil demand to rise continuously. In 2015 demand should grow by another 1.3 mb/d, or 1.4%, to an aggregate 94.0 mb/d.

All these factors constitute the basis of a continued stable environment for the oilfield service industry. Being a leader in technology, SBO has a sound strategic position to benefit from growing global oil and gas production. The Oilfield Equipment segment should profit from the high level of global drilling activity presently seen in all regions also in the second half of 2014. With its ongoing expansion of the drilling motor fleet and high market acceptance of the DSI circulation tool, SBO is in a position to make full use of this tendency.
Business development in the segment of High Precision Components will largely depend on the further capital spending policy of globally operating oilfield service companies.

From today's perspective, the effects of the current geopolitical development on SBO cannot yet be assessed. Regardless of political escalations or newly emerging market opportunities SBO, as in the past, is in a position to respond flexibly and promptly to changes in the market. What remains a structural source of growth for SBO is the continued tendency characterising higher oil and gas consumption that, as a result, requires consistently growing use of high-end technological equipment.

Comparison of key financial figures

1) based on average number of shares outstanding
2) reporting date 30 June


Schoeller-Bleckmann Oilfield Equipment AG is the global market leader in high-precision components and a leading provider of oilfield equipment for the oilfield service industry. The business focus is on non-magnetic drillstring components, high-performance drilling motors and circulation tools for directional and horizontal drilling. Worldwide, SBO has employed a workforce of 1640 as at 30 June 2014 (31 December 2013: 1574), thereof 440 in Ternitz/Austria and 657 in North America (including Mexico).


Further inquiry note:

Florian Schütz, Head of Investor Relations
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz, Hauptstraße 2
Phone: +43 2630/315 ext 251
e-mail: f.schuetz@sbo.co.at