EANS-News: C.A.T. oil successfully drives growth and profitability in H1 2012

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quarterly report

Subtitle: • Revenue growth of 16.9% to EUR 157.8 million • EBITDA up
25.1% to EUR 33.8 million • Improved EBITDA margin of 21.4% •
Business expansion well on track: eight out of nine new high class
conventional drilling rigs in operation • Additional orders raise
order book for full year 2012 to EUR 307 million – updated guidance

Vienna, 30 August 2012 (euro adhoc) - 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 its results for
the first half of 2012. C.A.T. oil realized strong revenue and EBITDA
growth which was primarily stimulated by strong demand for its
services, the increased per job revenue and operational efficiency.
In addition, the Group has almost completed the set up of its third
core service line of high class conventional drilling and to date has
eight out of nine drilling rigs in operation. Based on the successful
performance in the first six months of the year, C.A.T. oil remains
optimistic. Consequent to the latest additions, the order book for
full year 2012 totaled EUR 307 million as of 30 August 2012, and
C.A.T. oil expects to exceed prior-year's performance.

Manfred Kastner, CEO of C.A.T. oil, commented: "We have successfully
capitalized on the positive economic environment and our strong
market position to further drive growth. Due to strong demand and a
high share of large and complex jobs we were able to push our
revenues by about 17% and to increase EBITDA by one fourth compared
to the first six months of 2011. At the same time we remained fully
dedicated to further set up high class conventional drilling. All of
our rigs have successfully been marketed and during the second
quarter we took four more rigs into operations. Going forward, C.A.T.
oil will operate with a very well diversified portfolio and provide
even more services out of one hand. This makes us an even more
valuable and reliable partner for our customers. Although the
economic and financial crisis in the euro zone continues and impacts
confidence in certain regions, dynamics in our markets are intact. We
won additional tenders and are confident that we will be granted
additional orders during the third and fourth quarter. We are
therefore confident to outperform both, revenues and EBITDA of the
prior year."

Revenue increase of 16.9%

C.A.T. oil grew its revenues by 16.9% yoy to EUR 157.8 million (H1
2011: EUR 135.0 million), stimulated by an increase in job counts of
1.8% yoy to 1,677 jobs (H1 2011: 1,648 jobs) and a 13.7% yoy rise in
the average per job revenue to TEUR 93 (H1 2011: TEUR 81). The number
of fracturing jobs rose by 4.1% yoy and the number of sidetrack
drilling jobs decreased by 12.7% yoy due to the greater share of
lengthy horizontal sidetracks. Growth of average revenues per job was
driven by the greater size and complexity of jobs, as well as a
higher share of turnkey jobs and further contribution by the new high
class conventional drilling service.

Cost base developed at a lower rate than revenues

Despite the increased operating activity levels and inflationary
pressures, cost of sales rose only by 14.5% yoy to EUR 132.8 million
(H1 2011: EUR 116.0 million). Key drivers for the development mainly
were the greater operating leverage and efficiency gains. The
Company's total weighted average head-count went up by 2.8% to 2,428
employees (H1 2011: 2,362 employees) primarily driven by the latest
hires for the new high class conventional drilling business.

EBITDA margin up to 21.4%

EBITDA increased by 25.1% yoy to EUR 33.8 million (H1 2011: EUR 27.0
million) primarily driven by the strong revenue growth and the
disproportionally lower development of cost of sales. The EBITDA
margin expanded to 21.4% yoy in H1 2012 (H1 2011: 20.0%). The
Company's earnings before interest and tax (EBIT) went up 30.4% yoy
to EUR 13.0 million (H1 2011: EUR 10.0 million) resulting in the EBIT
margin of 8.2% (H1 2011: 7.4%).

Net result impacted by extraordinary effects and higher tax rate

The solid operational performance is not fully reflected in net
income, which decreased by 3.0% yoy to EUR 6.7 million during the
reporting period (H1 2011: EUR 6.9 million). The decline was mainly
due to the following three reasons: the negative financial result,
provisions for the seismic operations in India and a higher corporate
tax rate. The Company's net financial result amounted to EUR -2.6
million (H1 2011: EUR 0.2 million) and was primarily impacted by
increased interest expenses, unrealized and realized foreign currency
translation losses related to inter-company loans, as well as credit
facilities in US-dollars for the payments of the new high class
conventional drilling rigs. Although the Indian operations only
account for a very small portion of the Group's business and consist
of seismic services only, C.A.T. oil took steps to prepare for the
currently difficult situation in the Assam region. During the second
quarter Assam faced the increased political instability and violent
excesses which also impacted C.A.T. oil's operations. As it is
currently unclear how this volatile situation will develop C.A.T. oil
has preventively formed reserves and provisions in the total amount
of EUR 2.1 million.

Ongoing strong cash generation

Funds from operations increased by 21.0% yoy to EUR 28.7 million (H1
2011: EUR 23.7 million) primarily reflecting the combined effect of
the higher pre-tax profit and depreciation as well as the lower cash
taxes. Cash flow from operating activities was a net inflow of EUR
22.5 million (H1 2011: net inflow of EUR 16.1 million) due to the
higher funds from operations and the lower investments in net working
capital. Capital expenditure went down 70.8% yoy to EUR 12.9 million
(H1 2011: EUR 44.4 million) reflecting the lower investment plans for
2012. In total C.A.T. oil has budgeted EUR 30 million for 2012 to
finalize the set up of the new high class conventional drilling
business and to maintain capacities in good working order. Cash flow
from investing activities was a net outflow of EUR 11.7 million (H1
2011: net outflow of EUR 43.4 million). Cash flow from financing
activities was a net outflow of EUR 12.5 million in H1 2012 (H1 2011:
net inflow of EUR 17.5 million) mainly due to an early redemption of
long-term borrowings and an increase in cash dividend paid. As of 30
June 2012, cash and cash equivalents stood at EUR 28.3 million (31
December 2011: EUR 30.4 million). C.A.T. oil maintained a healthy
balance sheet with an equity ratio of 61.3% as of 30 June 2012 (31
December 2011: 62.3%).

Confident outlook for FY 2012

Based on the strong performance during the first six months and
additional orders bringing up the order book to EUR 307 million
(based on a rouble-to-euro exchange rate of 40) for full year 2012,
C.A.T. oil remains optimistic with respect to the second half of
2012. Although the unsolved sovereign debt crisis has called for
further cautiousness in certain regions of Europe, C.A.T. oil
currently sees ongoing solid demand for its services in its markets.
In addition, the oil price is at a high level and supports upstream
activities as well as investments of customers. C.A.T. oil therefore
is confident to exceed the prior year revenue and earnings growth.
Assuming stable energy prices and costs as well as no material
deterioration of the economic situation in its core markets, the
Company expects revenues in the range of EUR 300 to 320 million and
EBITDA in the range of EUR 67 to 73 million (based on a
rouble-to-euro exchange rate of 40) for full year 2012.

www.catoilag.com

Press contact:
FTI Consulting
Carolin Amann
Phone: +49 (0)69 92037-132
Email: carolin.amann@fticonsulting.com

Thomas M. Krammer
Phone: +49 (0)69 92037-183
Email: thomas.krammer@fticonsulting.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 on
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 unexploited oil fields accessible. The Company's growth is
driven by the following 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 has established conventional
drilling as third core service which allows to access completely
unexploited oil and gas reserves. Since its foundation in 1991 in
Celle, Germany, C.A.T. oil has built up a leading hydraulic
fracturing services business in Russia and Kazakhstan. Following its
IPO in 2006 the Company has invested more than EUR 250 million in
additional services and capacities: sidetrack drilling has become the
Company's second core business. In 2011, the Company initiated a
comprehensive investment program with a volume of EUR 150 million,
focusing on the set up of high class conventional drilling as third
core service offering. The new service line will be fully installed
in 2012. C.A.T. oil's portfolio also includes cementing and seismic
services. With its state-of-the art technology the Company clearly
differentiates itself in its core markets as the equipment allows for
very 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. C.A.T.
oil has a long-standing relationship with these customers and has
been a reliable service provider since its market entrance in the
early nineties. The Company has its headquarters in Vienna. In H1
2012, the Company employed an average of 2,428 people, most of which
are based in Russia and Kazakhstan.

Key financial figures for H1 2012

[million EUR]
H1 2012 H1 2011 Change in %
Revenues 157.8 135.0 16.9
Cost of sales 132.8 116.0 14.5
Gross profit 25.0 19.0 31.7
EBITDA 33.8 27.0 25.1
EBITDA margin (%) 21.4 20.0
EBIT 13.0 10.0 30.4
EBIT margin (%) 8.2 7.4
Net income 6.7 6.9 -3.0
Earnings per share (EUR) 0.136 0.140 -3.0
Equity Ratio (%) (1) 61.3 62.3

Cash flow from
operating activities 22.5 16.1 39.8
Cash flow from investing
activities -11.7 -43.4 -72.9
Cash flow from
financing activities -12.3 17.5 >-100
Cash and cash equivalents (1) 28.3 30.4 -6.9

Total job count 1,677 1,648 1.8
Per-job revenue (thou. EUR) 93 81 13.7
Employees 2,428 2,362 2.8

(1) As of 30 June 2012 and 31 December 2011 respectively

Key financial figures for Q2 2012

[in million EUR]
Q2 2012 Q2 2011 Change in %
Revenues 82.5 74.0 11.5
Cost of sales 66.9 60.4 10.7
Gross profit 15.5 13.5 14.9
EBITDA 19.8 18.4 8.0
EBITDA margin (in%) 24.1 24.8
EBIT 9.0 9.4 -4.6
EBIT margin (in%) 10.9 12.8
Net income 4.2 7.8 -46.9
Earnings per share (in EUR) 0.085 0.160 -46.9

Cash flow from
operating activities 13.4 15.8 -15.0
Cash flow from
investing activities -6.1 -16.0 -61.9
Cash flow from
financing activities -3.1 11.5 >-100

Total job count 877 878 -0.1
Per-job revenue (in thou. EUR) 93 83 11.8

Further inquiry note:
Thomas M. Krammer
Tel: +49(0)69-92037-183
Email: thomas.krammer@fticonsulting.com

end of announcement euro adhoc
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company: C.A.T. oil AG
Kärtner Ring 11-13
A-A-1010 Wien
phone: +43(0) 1 535 23 20 - 0
FAX: +43(0) 1 535 23 20 - 20
mail: ir@catoilag.com
WWW: http://www.catoilag.com
sector: Oil & Gas - Upstream activities
ISIN: AT0000A00Y78
indexes: SDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt
language: English