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Schoeller-Bleckmann Oilfield Equipment AG / Persistently challenging market environment weighs on result, but increasing signs of bottoming of the cycle reached - Positive operating cashflow and fundamentally strong balance sheet structure - I
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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9-month report
Ternitz / Vienna, 23 November 2016. The oilfield service industry has
been marked by the steepest decline in more than 30 years. Like the
entire industry, Schoeller-Bleckmann Oilfield Equipment AG (SBO),
listed on the ATX market of the Vienna Stock Exchange, has been hit
by this development. Since the beginning of the downturn, the number
of globally active drilling rigs has gone down by more than 60 % to
its lowest level in the second quarter of 2016. In the past months,
increasing signs have suggested that the cycle has reached its
bottom. However, oil companies have again significantly cut back on
their spending for exploration and production (E&P spending),
following a reduction by 21 % in 2015. The low demand weighs on the
result of SBO.
In this extremely difficult environment, SBO generated a positive
operating cashflow. Thanks to its fundamentally strong balance sheet
structure and high liquidity base, SBO remains in a position to
continue targeted investments in its long-term growth strategy.
Following the acquisition of Canadian "Resource Well Completion
Technologies Inc." (Resource) in November 2014, SBO took over US
based "Downhole Technology LLC" (Downhole Technology) on 1 April
2016. Downhole Technology has delivered positive contributions, and
in line with expectations, to SBO's business development. At the same
time, SBO continues to optimise its cost base.
"It seems that the most challengingand longest downcycle in our
industry has reached its bottom. However, also the fourth quarter of
2016 will be challenging", comments Gerald Grohmann, CEO of SBO.
"Supply and demand in the oil market are gradually moving towards a
balance. We assume that the first market to respond to an upswing
will be the North American market where we are well positioned based
on our drilling motor business and acquisitions in the Well
Completion business".
Results for the first three quarters of 2016
Due to low demand, sales went down by 48.3 % in the first three
quarters of 2016, to MEUR 133.1 (1-9/2015: MEUR 257.6). In the first
three quarters of 2015, SBO had still benefited from record bookings
received in 2014. While bookings fell compared to the previous year,
reflecting the strong customer restraint in ordering, by 24.5 % to
MEUR 116.5 (1-9/2015: MEUR 154.2), they improved from the first and
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