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C.A.T. oil AG Annual Report 2015: Successful operations under challenging market conditions, but currency and oil price stress earnings and financial results in euro - Seite 3

Total Group revenues measured in Russian roubles increased by 4.4% in
the 2015 financial year. In contrast, revenues in the Group currency,
the euro, reduced by 21.8% to EUR 322.5 million from EUR 412.1
million in the previous year. The high quality services rendered by
C.A.T. oil AG on the basis of the top-notch quality of the employees
deployed and the high technological standards of the technical
equipment has made the company more resistant against unfavourable
market conditions.

The deteriorating economic conditions reflected in the pressure on
service fees and the changed structure of service jobs related to the
cost savings programs implemented by customers are clearly shown by
the average per job revenue. This indicator declined by 27.8% to EUR
37,400 per job in the Well Services segment against the backdrop of a
10.8% rise in the number of service jobs. In the Drilling,
Sidetracking and IPM segment, average per job revenue fell by 31.4%,
with the number of jobs increasing by 11.2%.

Reduced costs and increased efficiency The cost of sales declined by
15.2% or EUR 48.7 million to EUR 271.5 million from EUR 320.2 million
in the previous year. This decrease is comparable with the
devaluation of the Russian rouble during 2015 (-16.6%), showing that
the management of C.A.T. oil AG was able to successfully increase the
efficiency of the operating business and reduce costs incurred in US
dollars or euros. This improvement took place in spite of the
conclusion of an investment program designed to expand capacities.
However, it was not sufficient to cover the decrease of revenues
expressed in euros based on the average exchange rate dynamics of
2015 versus 2014.

Development of earnings

The gross profit declined by 44.6% in the financial year 2015 to EUR
51.0 million, down from 92.0 million in the previous year. The gross
profit margin equalled 15.8% (down from 22.3% in 2014), which can be
considered as a relatively comfortable level for corporate finances
in such a challenging market environment.

EBITDA development was quite successful in 2015. Firstly, its margin
was maintained at 25.3%, just marginally below the level of 27.5% in
2014. Secondly, the EBITDA decline in Russian roubles was only 4%.
Accordingly, despite the 28% EBITDA decrease in euro terms, from
113.2 million in 2014 to 81.5 million in 2015, it had a limited
impact on the company. The Group preserved its ability to generate a
robust operating cash flow and even increased it in Russian rouble
terms by 12%.

The operating result reported as earnings before interest and taxes
(EBIT) deteriorated by 54.4% in the year under review to EUR 31.0