EANS-News: Schoeller-Bleckmann Oilfield Equipment AG / Positive operating result in challenging market environment - Very sound balance sheet structure with liquid means of MEUR 165 - cashflow increas

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6-month report

Ternitz/Vienna, 20 August 2015. In the first half of 2015, the
oilfield service industry was hit by the expected collapse of
drilling activity, and so was Schoeller-Bleckmann Oilfield Equipment
AG (SBO). Nevertheless, SBO was able to generate positive operating
income in this extremely difficult market environment.

Sales fell by 18.9 %, to MEUR 186.9 (1-6/2014: MEUR 230.3). Here, SBO
still profited from the strong bookings in the fourth quarter of
2014. Earnings before interest, taxes, depreciation, and amortisation
(EBITDA) fell by 31.5 %, to MEUR 45.1 (1-6/2014: MEUR 65.9). Earnings
before interest and taxes (EBIT) shrank by 57.6 %, to MEUR 19.3
(1-6/2014: MEUR 45.7). Half-year profit before tax arrived at MEUR
4.8, down 88.5 % from last year's reading (1-6/2014: MEUR 41.4).
Half-year profit after tax arrived at MEUR 0.0 (1-6/2014: MEUR 30.3).
Half-year earnings per share were EUR 0.0 (1-6/2014: EUR 1.90).
Cashflow from operating activities increased from MEUR 28.4 by 101.5
% to MEUR 57.1.

An effect created by the quarterly valuation of option commitments
was reflected in the financial result, concerning essentially the
option for acquiring 33 % of the shares in Resource Well Completion
Inc. (Resource): According to IFRS 13, an additional
non-cash-effective expenditure of MEUR 12.1 had to be included. While
business prospects for Resource remain unchanged and thus had no
influence on this adjustment, modification of the quarterly multiple
used - which had no effect on the actual value of the option - was
relevant to increasing the option commitment.

Gerald Grohmann, CEO of SBO: "We delivered a positive operating
income in the first half of 2015, despite the continued extremely
difficult market environment. Cashflow from operating activities even
doubled from last year's reading. As we expected, 2015 is going to be
a challenging year for the entire oilfield service industry. We are
preparing for the current downturn to last longer than previous ones.
But we know our industry and have learnt how to deal with its cycles.
This is why we initiated a set of measures at a very early point and
will consistently pursue this course."

The EBITDA margin came to 24.1 % (1-6/2014: 28.6 %), the EBIT margin
was 10.4 % (1-6/2014: 19.8 %), and the pre-tax margin arrived at 2.6
% (1-6/2014: 18.0 %). Compared to year-end 2014, net debt as at 30
June 2015 fell by 69.4 %, to MEUR 10.9 (31 December 2014: MEUR 35.6).
Liquid means went up by 27.3 %, to MEUR 165.7 (31 December 2014: MEUR
130.2). This rise was mainly attributable to a decrease of the net
working capital of MEUR 38.6.

With its equity ratio of 57 % SBO has a very sound balance sheet
structure and therefore was able, despite the current downturn, to
distribute to shareholders an unchanged high dividend of EUR 1.50 per
share for the year 2014 (MEUR 24).

Bookings dropped by 54.1 %, to MEUR 104.8 (1-6/2014: MEUR 228.5). The
order backlog at the end of the first half of the year arrived at
MEUR 60.9, down 43.7 % from last year's reading (30 June 2014: MEUR
108.1).

Outlook

In its most recent report the International Monetary Fund (IMF)
reviewed its forecast for global economic growth in full 2015
slightly downwards, from 3.5 % to 3.3 % (2014: 3.4 %). For 2016, the
IMF currently projects growth to arrive at 3.8 %. According to the
International Energy Agency (IEA), oil consumption is set to go up in
the third and fourth quarter (94.5 mb/d and 95.2 mb/d, following 93.5
mb/d in the second quarter). Calculated for full 2015, this should
bring average growth up by 1.6 mb/d to 94.2 mb/d. For 2016, IEA
anticipates growth to come to 1.4 mb/d (IEA Oil Market Report August
2015). Barclays, one of Britain's major banks, projects growth levels
of 1.7 mb/d in 2016 (Barclays' Oil Market Outlook August 2015).

SBO continues to expect global E&P spending to contract by 20 % to 30
% in full 2015. Consequently, the company braces for a continuation
of the very difficult development in fiscal 2015. SBO will
consistently continue implementing the countermeasures initiated in
2014 throughout the second half of 2015. However, those measures can
compensate for only part of the fierce decline in demand in the
established core markets. Our operating cashflow remains positive,
debt is low and liquid means are sufficiently high to provide SBO
with a stable basis to overcome the current cyclical downturn. As a
result, SBO is in a position to continue its search for strategically
fitting acquisition targets, even in the present challenging
environment.

The current situation has demonstrated once again how fast the
business cycle in the oil and gas industry can turn around. While
full attention is now focused on managing the downturn, it is clear
that the medium to long-term growth perspectives for the oilfield
service industry remain absolutely intact. Growing demand for oil and
gas, in addition to increasing decline rates from existing fields,
will call for new spending and usher in the next upswing for which
SBO, as technology and market leader, is well prepared.

Comparison of key financial figures

1-6/2015 1-6/2014 Change
Sales in MEUR 186.9 230.3 -18.9 %
EBITDA in MEUR 45.1 65.9 -31.5 %
EBITDA margin in % 24.1 28.6 -
EBIT in MEUR 19.3 45.7 -57.6 %
EBIT margin in % 10.4 19.8 -
Profit before tax in MEUR 4.8 41.4 -88.5 %
Profit after tax in MEUR 0.0 30.3 -99.9 %
EPS* in EUR 0.0 1.90 -99.9 %
Headcount** in numbers 1,279 1,640 -22.0 %

* based on average number of shares outstanding
** reporting date 30 June

Schoeller-Bleckmann Oilfield Equipment AG is the global market leader
in high-precision components and a leading supplier of oilfield
equipment for the oilfield service industry. The business focus is on
non-magnetic drillstring components and high-tech downhole tools for
drilling and completing directional and horizontal wells. As of 30
June 2015, SBO has employed a workforce of 1,279 worldwide (30 June
2014: 1,640), thereof 408 in Ternitz/Austria and 486 in North America
(including Mexico).

Further inquiry note:
MMag Florian Schütz, MBA
Head of Investor Relations SBO
Tel.: +43 2630 315-251
f.schuetz@sbo.co.at

end of announcement euro adhoc
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company: Schoeller-Bleckmann Oilfield Equipment AG
Hauptstrasse 2
A-2630 Ternitz
phone: 02630/315110
FAX: 02630/315101
mail: sboe@sbo.co.at
WWW: http://www.sbo.at
sector: Oil & Gas - Upstream activities
ISIN: AT0000946652
indexes: WBI, ATX Prime, ATX
stockmarkets: official market: Wien
language: English