C.A.T. oil AG

EANS-News: C.A.T. oil AG 2009: Increase in profitability and rise to market leadership in both core services

• All time high in job count of 3,002 jobs • Rise to market leadership in Russia in core well services • Net profit up more than three times to EUR 8.4 million • First time since the IPO: dividend proposal of EUR 0.30 per share

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Annual Reports

Subtitle: • All time high in job count of 3,002 jobs • Rise to market leadership in Russia in core well services • Net profit up more than three times to EUR 8.4 million • First time since the IPO: dividend proposal of EUR 0.30 per share

Vienna 28 April 2010 (euro adhoc) - 28 April 2010 - 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 the results for the Full Year 2009. Despite the global recession and the volatile market conditions C.A.T. oil has been able to reach a record level in its operations while at the same time growing market share, improving profitability and further strengthening its strong balance sheet.

Job count reached all-time-high - particularly strong growth in sidetrack drilling business Particularly in the first half of 2009, oil and gas producers were heavily im-pacted by the crash in oil prices and, therefore, kept budgets and new orders at very conservative levels. Whereas demand for the seismic business went down sharply, orders for C.A.T. oil´s core services, hydraulic fracturing and sidetrack drilling, slowly picked up during the summer. C.A.T. oil was not only awarded new assignments but also accomplished more jobs than ever before. As a result, the Company was able to increase the annual job count to an all-time high of 3,002 jobs (2008: 2,381 jobs).

In Fiscal Year 2009 growth driver number one has again been C.A.T. oil´s si-detrack drilling business, which saw a rise in a job count by 37.6% yoy despite the opposite trend in the Russian sidetrack drilling market during this difficult year. Starting with two rigs at the time of the IPO and adding 13 modern Ger-man rigs within the last three years, C.A.T. oil has become the number one among independent service providers in Russia by job count and a number of active rigs. The strategy to offer state-of-the-art technology and highest service quality made all the difference. Measured against a number of jobs, C.A.T. oil´s market share expanded to an estimated level of around 22% in 2009 from approximately 18% in 2008.

C.A.T. oil was also able to further expand its other core business, hydraulic fracturing: job count in this service area also went up by 4.8% yoy despite the market turbulences in 2009. On a job count measure, the Company fracturing market share in Russia and Kazakhstan inflated to the estimated 28% in 2009 from around 26% in 2008.

Manfred Kastner, CEO of C.A.T. oil, commented: "C.A.T. oil has mastered the enormous challenges of 2009. The combination of our high quality approach, modern technology and customer orientation has been even more appreciated during these difficult times and our clients rewarded us with more jobs than ever thereby boosting C.A.T. oil in number one positions in both - side track drilling and hydraulic fracturing jobs." He added: "In addition, we have reacted early on and taken comprehensive measures to successfully decrease our costs despite the new high in jobs".

Streamlined operations and improved cost base Throughout 2009 the Company implemented a comprehensive cost cutting program with the goal to reduce its cost base and increase profitability. Due to workflow improvements in its operations and renegotiated supplier contracts, C.A.T. oil was, despite the record level in job counts, able to reduce costs of sales by 15.0% yoy to EUR 193.3 million (2008: EUR 227.5 million); as part of the cost cutting program, also general and administrative expenses were suc-cessfully cut by 31.5% yoy to EUR 18.6 million (2008: EUR 27.1 million) and wages and salaries declined by 25.8% yoy to EUR 33.8 million (2008: EUR 45.6 million). The reduction of personnel costs was primarily attained through outsourcing of auxiliary functions while maintaining the highly skilled operating workforce. In 2009, C.A.T. oil´s total weighted-average headcount was down 20.7% yoy to 2,873 employees (2008: 3,621).

Foreign currency effects impacted revenues The high operating activity levels and the significantly improved cost efficiency were, however, not fully reflected in C.A.T. oil´s earnings in Financial Year 2009. C.A.T. oil´s revenues were particularly impacted by a 17.5% yoy decline in the average Rouble exchange rate to the Euro and by softer prices, particu-larly in sidetrack drilling. Although flat yoy in Rouble terms, the Company revenues in Euro terms decreased by 17.4% yoy to EUR 228.3 million (2008: EUR 276.2 million). The Company´s average per job revenues amounted to TEUR 75.0 (2008: TEUR 95.0). The trend though reversed and the Rouble has strengthened against the Euro since the end of 2009.

Increased EBITDA and EBIT margins C.A.T. oil´s earnings before interest, corporate tax, depreciation and amortiza-tion (EBITDA) for the reporting period decreased by 3.9% yoy to EUR 45.3 million (2008: EUR 47.2 million). The EBITDA margin expanded to 19.9% (2008: 17.7%), reflecting C.A.T. oil´s persistent cost management and efficien-cy improvements. The decline in the Company´s 2009 EBITDA was largely attributed to a EUR 7.1 million loss before interest, corporate tax, depreciation and amortization (2008: loss of EUR 4.4 million) from the Formation Evaluation reportable segment, which primarily consists of seismic services. Since demand and price for oil were down, oil and gas producers significantly re-duced their exploration activities. As a consequence, demand for C.A.T. oil´s seismic services went down sharply and the Company decided to reduce its operating capacity.

Opposite to this negative development, EBITDA from the Well Service seg-ment (net of inter-company effects), which primarily represents the Company´s core businesses, was up 1.5% yoy to EUR 52.4 million, (2008: EUR 51.6 million). The segment´s EBITDA margin went up to 23.3% (2008: 19.2%).

Due to the decreased EBITDA and higher depreciation, the Company´s earn-ings before interest and corporate tax (EBIT) declined 11.4% yoy to EUR 18.4 million (2008: EUR 20.7 million), but the EBIT margin expanded to 8% from 7.5% in 2008.

The net financial result improved 57.7% yoy to EUR -3.6 million (2008: EUR -8.4 million), mainly due to lower unrealized and realized foreign currency translation losses on euro-denominated inter-company loans. Higher net inter-est expense of EUR 1.4 million (2008: EUR 1.1 million) - resulting from higher interest-bearing liabilities - also impacted the net financial result.

C.A.T. oil´s pre-tax profit for 2009 rose 20.2% yoy to EUR 14.8 million (2008: EUR 12.3 million), primarily reflecting the improved net financial result. Higher pre-tax profit in combination with lower effective income tax rate led to a sig-nificant increase in net income, which went up more than three times to EUR 8.4 million in 2009 (2008: EUR 2.6 million). Earnings per share amounted to EUR 0.172 in 2009, up from EUR 0.053 in 2008.

Stronger balance sheet and very solid financial situation C.A.T. oil´s lower requirements for working capital enabled the Company to increase cash flow from operating activities 155.9% yoy to EUR 62.4 million during the reporting period (2008: EUR 24.4 million). After three years of in-tense investments in new fracturing and sidetrack drilling capacities and in view of the global recession in 2009, C.A.T. oil has reduced its capital expend-itures to a maintenance level. Except for one sidetrack drilling rig which came into operations in Q4 2009 no further capacities were added. The Company´s capital expenditures were thus down 72.8% yoy to EUR 12.0 million in 2009 (2008: EUR 44.2 million). Cash flow from investing activities was a net outflow of EUR 10.9 million in 2009 compared to a net outflow of EUR 43.2 million in 2008. As a result, C.A.T. oil generated a positive free cash flow of EUR 51.5 million in 2009 (2008: net outflow of EUR -18.9 million).

Cash flow from financing activities was a net outflow of EUR 36.9 million in 2009 (2008: EUR 28.4 million). The development primarily reflected a deliber-ate early repayment of a EUR 30.0 million three-year loan. Cash and cash equivalents more than doubled to EUR 29.1 million at 31 December 2009 (31 December 2008: EUR 14.4 million). Thanks to its continued conservative fi-nancial policy, C.A.T. oil operates on the basis of a very strong balance sheet with an equity ratio of 84.6% at 31 December 2009. (31 December 2008: 73.4%). The Company enjoyed net cash of EUR 29.0 million at 31 December 2009 compared to net debt of EUR 21.3 million at 31 December 2008.

First time since IPO: dividend proposal of EUR 0.30 per share Manfred Kastner said: "Our results during the highly challenging fiscal year 2009 demonstrate that our cautious financial policy and our focused business strategy have proven their sustainability. We have successfully capitalised on our advantages in terms of combining modern technology with our experi-enced and motivated teams. Our proven logistics have been determined and persistent in becoming the market leader in our core businesses. Therefore, we have decided that our shareholders shall participate in these positive de-velopments. For the first time since the IPO, Management and Supervisory Board will suggest to shareholders on the Annual General Assembly to pay a dividend of 0.30 Euro per share". It is expected that the record date for the proposed dividend will be 22 June 2010 and the payment date will be 28 June 2008.

It is also the Company´s intention to develop and adopt a dividend policy in Q2 2010 to ensure that also in the future, shareholders adequately participate in the Company´s success. Further, the Company would target to return to shareholders, subject to a satisfactory earnings situation and additional condi-tions, at least 20% of the Company´s consolidated net profit. With respect to its future dividend policy C.A.T. oil will determine it flexibly according to a number of factors, among them cash flow development, financing and investment requirements to support the Company´s further growth and diversification as well as market conditions, liquidity levels and a flexible capital structure. The dividend for Fiscal Year 2009 will be suggested to the shareholders on the Annual General Assembly which takes place on June 18, 2010 in Vienna .

Cautious optimism for 2010 based on first signs of recovery Since the second half of 2009 market conditions - and in particular the oil price and the value of the Rouble - have significantly improved and in the first quarter of 2010 signs of an economic recovery became apparent throughout the world. C.A.T. oil also experienced positive effects of this trend as the Company´s order book filling process for Financial Year 2010 normalized in terms of timing and level. The Company received renewals of contracts for its core services, as well as new assignments, some of them even running until 2012. At the end of January, C.A.T. oil´s 2010 order book volume thus amounted to around EUR 206 million (based on the 2010 conservative Rouble-to-Euro exchange rate assumption of 43) and the Company is confident that - with the oil demand and price continuing its recovery - oil and gas producers will increase their activities further. Despite the improved market sentiment, C.A.T. oil is cautiously optimistic for 2010. Manfred Kastner said: "There is light at the end of the tunnel, at the same time, however, we cannot be sure how long the tunnel is and we have not yet seen a fundamental recovery of markets. We will, therefore, remain as flexible and as determined as ever, stretch our advantages and use our skills to the maximum to realize further growth for the benefit of C.A.T. oil, its customers and shareholders."

www.catoilag.com Press contact: FD

Carolin Amann                                   Lucie Maucher
Tel.: +49 (0)69 92037-132                       Tel.: +49 (0)69 92037-183
Email: carolin.amann@fd.com                  Email: lucie.maucher@fd.com

About C.A.T. oil AG: 

C.A.T. oil AG is one of the leading providers of oil and gas field services in Russia and Kazakhstan and is listed at the Frankfurt Stock Exchange (SDAX). C.A.T. oil offers a wide spectrum of services to increase the lifecycle of an oil field or to make abandoned oil fields accessible. The Company´s growth is driven by three significant factors: Existing oil fields need to be stimulated due to shrinking oil and gas resources in order to optimize capacities. Simultaneously, idle wells are reactivated or made accessible through new methods in order to deploy wells to their maximum. Additionally C.A.T. oil offers seismic services which help to identify new oil and gas sources. Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built up a leading hy-draulic fracturing services business in Russia and Kazakhstan. Following its IPO in 2006 the Company has invested more than EUR 200 million in additional services and capacities: sidetrack drilling has become the Company´s second core business. Apart from the services mentioned above, C.A.T.oil´s diversified service portfolio includes coiled tubing, formation evaluation services, well work-over, cementing and seismic services. Due to the recent expansion investments C.A.T. oil´s fleets and rigs are state-of-the-art and therefore allow for time-efficient and effective deployment. C.A.T. oil´s customer base includes the leading Russian and Kazakh oil and gas producers amongst them Gazprom, KazMunaiGaz, LUKOIL, Rosneft and TNK-BP. With all of them C.A.T. oil has a long-standing relationship and has been a reliable service pro-vider since its market entrance in the early nineties. The Company has its headquarters in Vienna and employed an average of 2,873 people on 31 December 2009, most of whom are based in Russia and Kazakhstan. The Company´s order book for 2010 amounted to approximately EUR 200 million in January 2010

Key financial figures for FY 2009

[in million EUR]                     FY 2009    FY 2008 Change in %
Revenues                              228.1      276.2  -17.4
Cost of sales                         193.3      227.5  -15.0
Gross profit                           34.7       48.7  -28.7
EBITDA                                 45.3       47.2   -3.9
EBITDA margin (in%)                    19.9       17.7
EBIT                                   18.4       20.7  -11.4
EBIT margin (in%)                       8.0       7.5
Net income                              8.4      2.6       n/a
Earnings per share (in EUR)            0.17      0.05      n/a
Equity Ratio (in %)                     84.6     73.4    15.3

Cash flow from operating activities     62.4    24.4    n/a
Cash flow from investing activities     -10.9   -43.2   74.8
Cash flow from financing activities     -36.9   28.4    n/a
Cash and cash equivalents1      29.1    14.4    n/a

Total job count                        3,002    2,381   26.1
Per-job revenue (in thou. EUR)          75.0    95.0    -21.1
Employees                               2,873   3,621   -20.7 

As of 31 December 2009 and 31 December 2008 respectively

Key financial figures for Q4 2009

[in million EUR]                         Q4 2009        Q4 2008 Change in %
Revenues                                  51.2  64.2    -20.2
Cost of sales                            49.8   58.9    -99.9
Gross profit                              1.4    5.3     -72.8
EBITDA                                    5.2    5.8     -10.2
EBITDA margin (in%)                       10.1   9.0
EBIT                                     -2.0   -3.8    -47.3
EBIT margin (in%)                        -3.9   -5.9
Net income                               -3.5   -9.9    75.0
Earnings per share (in EUR)            -0.071   -0.203  61.0

Cash flow from operating activities     24.0    -5.7    n/a
Cash flow from investing activities     -5.1    -9.3    45.4
Cash flow from financing activities     -8.7    30.0    n/a

Total job count                    650  630     3.2
Per-job revenue (in thou. EUR)   79     101     -21.8 
end of announcement                               euro adhoc
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Further inquiry note:

Carolin Amann
Tel.: +49(0) 69-92037132
E-Mail: Carolin.Amann@fd.com

Branche: Oil & Gas - Upstream activities
ISIN: AT0000A00Y78
WKN: A0JKWU
Index: SDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard
Original-Content von: C.A.T. oil AG, übermittelt durch news aktuell

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