EANS-News: Schoeller-Bleckmann Oilfield Equipment AG / Persistently challenging market environment weighs on result, but increasing signs of bottoming of the cycle reached - Positive operating cashflo

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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
the second quarters of 2016. At the end of the third quarter of 2016,
the order backlog stood at MEUR 17.4, following MEUR 40.2 as at 30
September 2015.

Earnings before interest, taxes, depreciation, and amortisation
(EBITDA) were MEUR minus 7.2 (1-9/2015: MEUR 55.0). The operating
result (EBIT) before one-off effects came to MEUR minus 44.0. By
considering one-off expenses for due diligence of MEUR 2.3 and
expenses for impairment on property, plant and equipment, and
goodwill as well as restructuring of MEUR 4.6, therefore totalling
MEUR 6.9, reported operating result (EBIT) came to MEUR minus 50.9
(1- 9/2015: MEUR minus 7.1). The financial result went to MEUR 14.6
(1-9/2015: MEUR 7.4), therein considered the result from the
revaluation of option commitments of MEUR 16.9. Profit before tax was
MEUR minus 36.2 (1-9/2015: MEUR 0.3), profit after tax came to MEUR
minus 22.9 (1-9/2015: MEUR minus 2.0). Earnings per share arrived at
EUR minus 1.43 (1-9/2015: EUR minus 0.13). The margins reflect the
market collapse: The EBITDA margin was minus 5.4 % (1-9/2015: 21.4
%), and the EBIT margin was minus 38.2 % (1-9/2015: minus 2.8 %). The
pre-tax margin stood at minus 27.2 % (1-9/2015: 0.1 %).

Regardless of the persisting downturn, SBO generated a positive
operating cashflow of MEUR 28.9 (1-9/2015: MEUR 86.1) in the first
three quarters of 2016.

The balance sheet structure of SBO remains fundamentally strong.
Liquid funds as at 30 September 2016 amounted to MEUR 141.6 (31
December 2015 - prior to the acquisition of Downhole Technology: MEUR
196.3). Net debt stood at MEUR 56.1 (31 December 2015: Net cash
position of MEUR 26.2). Spending for property, plant and equipment
and intangible assets (CAPEX) was cut by 48.7 % from the first three
quarters of 2015 to MEUR 9.4 (1-9/2015: MEUR 18.3). Purchase
commitments for expenditure in property, plant and equipment as at 30
September 2016 amounted to MEUR 0.2 (30 September 2015: MEUR 1.1).
The equity ratio stood at 54.8 % (31 December 2015: 60.8 %).

Outlook

Since the fourth quarter of 2014, the oilfield service industry has
been affected by a massive downturn which is still persisting. Global
spending for exploration and production will probably be curbed by
another 26 % in 2016. In North America, the decline is projected to
come to 41 %, and internationally to 21 %.

At the same time, global oil oversupply is decreasing gradually.
Global demand for oil is rising constantly. It is widely believed
that the balance of supply and demand should be reached in 2017. If
OPEC members decide to introduce the discussed production ceiling on
30 November 2016, this should accelerate the process. Given the lack
of E&P spending in recent years, expectations are that the decreasing
oil supply cannot meet the growing oil demand in the future. At this
point in time, at the latest, new investments will be necessary.

The year 2016 will remain challenging also in the fourth quarter.
However, SBO is prepared to cope well with the steepest downturn in
decades. The strong cash balance, low net debt and high equity ratio
provide the company with a basis to make targeted investments in its
long-term growth strategy even in the downturn. With the
establishment of its Well Completion business and its activities in
research & development, SBO is preparing systematically for the next
upswing. At the same time, ongoing cost-cutting programmes are
implemented consistently and capacities adjusted to the market
situation. SBO is well positioned to benefit fully from the next
upswing as technology and market leader.

Comparison of key figures

_____________________________________________________________________
________ | | | 1-9 / 2016| 1-9 /
2015| Change in %| |_Key_figures:|_______________|_______________|
_______________|_______________| |Sales________|___________MEUR|_____
_____133.1|__________257.6|_________-_48.3|

|Earnings | | | | |
|before | | | | |
|interest, | | | | |
|taxes, | MEUR| - 7.2| 55.0| n.a.|
|depreciation | | | | |
|and | | | | |
|amortisation | | | | |
|(EBITDA)_____|_______________|_______________|_______________|_______________|
|EBITDA_margin|______________%|__________-_5.4|___________21.4|_______-_______|
|EBIT_________|___________MEUR|_________-_50.9|__________-_7.1|___________n.a.|
|EBIT_margin__|______________%|_________-_38.2|__________-_2.8|_______-_______|

|Profit before| MEUR| - 36.2| 0.3|
n.a.| |tax__________|_______________|_______________|_______________|
_______________| |Profit after | MEUR| - 22.9|
- 2.0| n.a.| |tax__________|_______________|_______________
|_______________|_______________| |Earnings per | EUR|
- 1.43| - 0.13| n.a.| |share________|______________
_|_______________|_______________|_______________| |Operating |
MEUR| 28.9| 86.1| - 66.5|

|cashflow_____|_______________|_______________|_______________|_______________|
|Headcount____|_______________|__________1,184|__________1,231|__________-_3.8|

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
September 2016, SBO has employed a workforce of 1,184 worldwide (30
September 2015: 1,231), thereof 318 in Ternitz / Austria and 521 in
North America (including Mexico).

Further inquiry note:
Andreas Böcskör, Head of Investor Relations
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz, Hauptstraße 2
Tel: +43 2630/315 DW 252, Fax: DW 101
E-Mail: a.boecskoer@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

Original-Content von: Schoeller-Bleckmann Oilfield Equipment AG, übermittelt durch news aktuell