EANS-News: 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

--------------------------------------------------------------------------------
Corporate news transmitted by euro adhoc. The issuer/originator is solely
responsible for the content of this announcement.
--------------------------------------------------------------------------------

Subtitle: • Results in line with guidance • Revenue in Russian
roubles increased by 4.4% • Sales revenues in euros decreased by
21.8% to EUR 322.5 million • EBITDA contracted by 28.0% to EUR 81.5
million • Consolidated net profit reached EUR 20.3 million in 2015 •
Equity ratio improved from 44.5% to 48.3% • No dividend payment
proposed to AGM to keep key financials strong as a necessary basis
for future development

Financial Figures/Balance Sheet/Publication of Annual report 2015

Operating performance of the Group

2015 was a defining year for C.A.T. oil AG, a year in which the
foundation was laid for the further development of the Group. In
spite of extremely challenging economic conditions, the C.A.T. oil
Group led by a new management team developed satisfactorily, both in
terms of its operating business as well as from a financial point of
view.

The number of service jobs increased from 4,489 in 2014 to 4,975 in
2015, comprising an increase of 10.8%. Revenue generated in Russian
roubles was up by 4.4%. The consolidated financial statements
expressed in euros show a performance slightly above the original
guidance and the expected results. Revenue for the year 2015 totaled
EUR 322.5 million, whereas EBITDA and EBIT amounted to EUR 81.5 and
31.0 million respectively. Accordingly, C.A.T. oil AG performed
clearly better than its peers.

Yury Semenov, CEO, and Valeriy Inyushin, CFO, on the performance of
C.A.T. oil AG: "We are proud of our achieving an increase in the
number of contract scopes and revenues in the local currency despite
the backdrop of the current market environment featuring difficult
conditions for the oil field service business in Russia and CIS. We
maintained our financial solidity by a proactive approach in
managing, by a disciplined cost control and strong balance sheet
structure, enabling us to calmly and confidently look ahead to the
upcoming months. Today, we have already marketed almost all our
operation capacities across all service segments for the year 2016."

The most important business achievements of C.A.T. oil Group in 2015
were as follows:

- The company's market position was maintained in drilling and expanded in
the fracturing segment.
- A sufficient EBITDA margin and operating cash flow continued to be
generated.
- Capex and opex control were optimized.
- The Group business was converted to the self-financing model without the
need for external resources.
- A solid cash position was maintained during the year.
- A conversion program for intergroup debt-to-equity was launched, aiming
to improve profitability of operating units and the Group's equity structure.

Complete utilization of equipment portfolio The entire equipment
portfolio of C.A.T. oil AG was completely utilized throughout 2015.
The company currently has sufficient equipment at its disposal in the
light of the particular situation prevailing on the Russian market
for oil and gas exploration and production. Against the backdrop of
restrained customer investments and price pressure on service fees,
the management of C.A.T. oil pursued a flexible investment policy,
focusing mainly on carrying out the required replacement and
maintenance investments.

Leading position in fracturing Another highlight in the company's
operating business in 2015 was the record level of drilling in the
Orenburg region. Horizontal drilling of more than 1,000 meters was
successfully concluded for the customer Gazprom Neft in only 12.3
days. This unprecedented achievement was also recognized by the
industry. Moreover, the 30,000th fracturing job in the history of the
company was carried out in June/July 2015. This milestone
demonstrates the leading market position of C.A.T. oil AG in the
application of this technology on the Russian market as well as the
high customer satisfaction.

Introduction of a holistic management approach The goal of the new
Management Board is to ensure the further development of C.A.T. oil
Group. In particular, the objective is to quickly and comprehensively
generate synergies in the management and administration of business
operations. Additionally, the new Management Board aims to further
expand the company's high-quality services and develop proprietary
oil field service know-how in order to secure the company's
sustainable competitiveness in the future.

For this purpose, a fully-owned subsidiary of C.A.T. oil directly
below the level of the parent company was established in the fall of
2015. The company, LLC "Petro Welt Technologies", short LLC
"Pe-We-Te" headquartered in Moscow, has the right to issue directives
and intervene in the activities of the operating subsidiaries of
C.A.T. oil AG. Pe-We-Te assumed responsibility for a number of
administrative services from the operating subsidiaries such as
finance, liquidity management, human resources and above all
procurement. This step is designed to serve as the basis for
generating synergies and ensuring the ongoing further development of
unified quality standards.

Revenue development

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
million, down from the prior-year level of EUR 67.9 million. This was
due to the insufficient compensation through a reduction in general
and administrative expenses.

The financial result in 2015 was minus EUR 1.9 million, compared to
the positive financial result of EUR 3.2 million in 2014. This
development can be mainly attributed to exchange rate changes. The
net profit before tax amounted to EUR 29.0 million.

The more pronounced drop in the net profit compared to the profit
before tax (-62.5% versus -59.1% yoy) can be primarily attributed to
the increase in the effective tax rate from 24% in 2014 to 30% in
2015. This is due to additional tax payments in Russia and specifying
taxes for previous periods. Earnings per share equalled EUR 0.42 for
the 2015 financial year, lower than the level of EUR 1.11 per share
in 2014.

Dividend for the financial year 2015

In the event of attractive investment opportunities, the company is
considering to enter new geographical markets on the basis of
established and new business relationships or playing an active role
in the consolidation process on the market for service providers to
the oil industry. For this reason, a solid structure of the balance
sheet is necessary. The Management Board and Supervisory Board willl
therefore propose that the Annual General Meeting approves the
intention not to distribute any dividend for the financial year 2015.
The dividend for 2014 amounted to EUR 0.12 per share.

Development of equity and balance sheet structure

In 2015, the equity ratio could be increased to 48.3%, up from 44.5%
in 2014. This is mainly due to the reduction in the balance sheet
total, from EUR 379.8 million to EUR 301.3 million, and
debt-to-equity program launched in the operational companies. For one
thing, the valuation of assets was lower as a result of the loss in
value of the Russian rouble. In addition, the non-current and current
liabilities of C.A.T. oil were substantially reduced. Equity of the
Group fell to EUR 145.5 million as at 31 December 2015 compared to
EUR 168.9 million at the end of 2014. The non-current assets of
C.A.T. oil AG recognized to the amount of EUR 156.4 million were more
than offset by equity and non-current liabilities totalling EUR 249.7
million. At the end of 2015, total net debt amounted to EUR 104.5
million, which corresponds to a factor of 1.3 EBITDA.

Cash flow development

Based on an EBITDA of EUR 81.5 million in 2015 (2014: EUR 113.2
million), the cash flow from operating activities amounted to EUR
67.3 million, down from the prior-year figure of EUR 80.1 million.
The negative impact of the reduction in the profit before tax was
partly compensated by the improved dynamics of working capital (2015:
EUR -985 thousand, 2014: EUR -20.1 million). The Management Board
succeeded in limiting the cash flow decline thanks to its stringent
receivables management and improved contract conditions.

Following delivery of the equipment ordered in 2014, investment
activity was considerably cut back in 2015. Capital expenditures in
property, plant and equipment totalled EUR 57.6 million, compared to
EUR 134.8 million in the previous year.

The cash flow from financing activities was minus EUR 29.7 million,
down from EUR 84.7 million in 2014. The main reason was the early
total repayment of a loan to Sberbank of Russia.

Guidance for revenues and earnings levels

Based on these general assumptions - calculating with an exchange
rate of 80-82 Russian rouble for 1 euro - and assured by almost fully
contracted capacities, the management expects revenue from operations
in Russian rouble to raise by 1 or 2% in 2016. The margins regarding
EBIT and EBITDA are expected to keep their satisfactory level around
12% and 25% respectively. The Management will keep a focus on cost of
sales which are expected to keep their current level in Russian
rouble.

Further inquiry note:
Bernhard Grabmayr
SCHOLDAN&Comp.
Bernhard Grabmayr
office@scholdan.com
+43-1-513 23 88-0

end of announcement euro adhoc
--------------------------------------------------------------------------------

company: C.A.T. oil AG
Kärntner Ring 11-13
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