EANS-News: Schoeller-Bleckmann Oilfield Equipment AG / Annual result 2016

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annual result/annual report

- Harshest industry crisis in 30 years weighs on result - Proactive
countermeasures and stringent cost management to secure positive
operating cashflow and fundamentally strong balance sheet structure -
Strategic expansion in the field of well completion continued
successfully through largest acquisition in the company's history

Ternitz/Vienna, 17 March 2017. The entire oilfield service industry
was confronted with a persistent downturn in 2016. For the first time
in three decades, oil companies curtailed their spending for
exploration and production (E&P) in two consecutive years by a total
of 42 %. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on
the ATX market of the Vienna Stock Exchange, felt the effects both in
terms of sales and profit. Nevertheless, SBO generated a positive
operating cashflow and preserved its fundamentally strong balance
sheet structure by implementing proactive countermeasures. With the
acquisition of Downhole Technology, SBO consistently continued its
strategy to expand the attractive well completion business. This
acquisition was the largest acquisition in the company's history,
entirely financed from own funds.

"The sharpest downturn in 30 years had a firm grip on our industry in
2016. The overall situation in the market forced us to take stringent
measures. We took all necessary steps to dampen the effects of the
market situation on SBO. Nevertheless, the situation is clearly
reflected in our results", says Gerald Grohmann, CEO of SBO. "We
implemented strict cost management, while consistently adhering to
our long-term growth strategy. Acquiring Downhole Technology was a
major step to successfully develop our well completion business that
was started back in 2014 when we took over Resource. Along with our
projects in research and development, these are key investments for
the future."

Downhole Technology is based in Houston, USA, and a technologically
leading provider of composite frac plugs for completing oil and gas
wells. With Downhole Technology and Resource, the company's second
subsidiary in this field, SBO has established itself as a leading
independent product provider in the market.

Business result reflects market environment in 2016 Due to the
persistent downturn, sales in 2016 contracted by 41.7 % to MEUR 183.0
(2015: MEUR 313.7). Operating earnings before interest, taxes,
depreciation, and amortisation (EBITDA) were MEUR 0.4 (2015: MEUR
55.1). Considering one-off expenses for due diligence and expenses
for restructuring of in total MEUR 2.9, the reported EBITDA amounted
to MEUR minus 2.5 (2015: MEUR 53.1). Operating result (EBIT) before
one-off effects was MEUR minus 50.4 (2015: MEUR 3.7). Considering the
aforementioned one-off effects and one-off expenses for impairment of
property, plant and equipment, and goodwill of MEUR 5.1, in total
MEUR 8.0, the reported operating result (EBIT) came to MEUR minus
58.3 (2015: MEUR minus 22.1). The financial result arrived at MEUR
13.3 (2015: MEUR 2.1), including the income from the valuation of
option commitments amounting to MEUR 17.2. Profit before tax was MEUR
minus 45.1 (2015: MEUR minus 20.0), profit after tax was MEUR minus
28.0 (2015: MEUR minus 19.0). Earnings per share arrived at EUR minus
1.75 (2015: EUR minus 1.19).

The Executive Board will propose to the Annual General Meeting not to
pay a dividend for the 2016 financial year.

Due to massively curtailed E&P spending (2016: down by 27 % globally)
of oil companies, bookings received by SBO in the 2016 financial year
dropped by 16.8 % to MEUR 169.3 (2015: MEUR 203.6). Although bookings
in the second half of 2016 increased from the first two quarters of
the year, the order backlog at year-end 2016 of MEUR 20.5 was down
40.4 % from last year's reading (31 December 2015: MEUR 34.3).

Investing only in the right places Spending for property, plant and
equipment and intangible assets in the 2016 financial year amounted
to MEUR 13.0 (2015: MEUR 23.1) and was restricted largely to
maintenance requirements. "But our R&D budgets were excluded from any
cost-cutting measures", comments Mr. Grohmann. "Because it is our
innovative strength in production technologies and new products that
will secure our strong market position when the next upswing sets
in."

Fundamentally strong balance sheet to navigate safely through the
cycle SBO acquired 68 % of the shares in Downhole Technology early in
the second quarter of 2016 at a purchase price of MUSD 103. Even
after this acquisition, SBO, as of 31 December 2016, had a sound
equity ratio of 53.1 % (31 December 2015: 60.8 %). Liquid funds as of
the balance sheet date - after the acquisition - remained at a high
level of MEUR 193.5 (31 December 2015, before the acquisition of
Downhole Technology: MEUR 196.3). SBO's net debt as of 31 December
2016 was MEUR 51.0 (31 December 2015: Net liquidity MEUR 26.2).

Despite the extremely difficult market environment, the company
generated a positive operating cashflow of MEUR 31.3 (2015: MEUR
103.4), achieved mainly through active working capital management.

Sound SBO share performance defies industry crisis Despite the harsh
crisis in the industry, the SBO share performed above average in
2016, starting into the stock market year at a rate of EUR 50.41. On
30 December 2016, after an outright price rally from the middle of
the second half of the year, the share price closed at EUR 76.53, up
51.8 % from the beginning of the year. By contrast, the Oil Service
Sector Index (OSX), representing the stock performance of the world's
largest oil service companies, rose by 15.1 % (from USD 159.65 to USD
183.79) over the same period. Vienna's ATX blue-chip index posted an
increase of 9.2 % in 2016. Thus, the SBO share outperformed both the
OSX and the ATX.

Market development in 2016 and expectations for 2017 The oil market
remained oversupplied in 2016 by 0.4 million barrels per day (mb/ d)
over the full year. On 30 November 2016, OPEC members agreed on a
production limit of 32.5 mb/d for a period of at least six months.
This should contribute to an accelerated restoration of the supply
and demand balance. Initially, the global rig count went down in 2016
by 26 % to 1,405 rigs in May. Starting in June, a marked recovery set
in for the North American rig count. The global rig count in December
2016 was 1,772 rigs, down 10 % from last year's reading (December
2015: 1,969 rigs).

After two years of continuous spending cuts in the industry, the
downturn finally seems to have reached its bottom. Expectations for
2017 are that a noticeable market recovery should occur above all in
North America. Internationally, such revival has not yet started to
take place. According to leading analysts, spending for exploration
and production (E&P) in 2017 should rise by 2 % globally, and by 21 %
in North America. However, it will take some more time until
inventories built by SBO's customers over the past two years have
come down.

"Market development shows clearly positive tendencies. SBO
traditionally is a company that responds late to industry cycles.
Therefore, 2017 will be a year of transition for us", comments Gerald
Grohmann, CEO of SBO. "In any event, our well completion business
brings us closer to the cycle than our core business and will help us
to fully benefit from the next upswing."

SBO is the global market leader in high-precision components made of
high-alloy steel and a leading supplier of key components 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 31 December 2016,
SBO employed a workforce of 1,200 worldwide (31 December 2015:
1,135), thereof 315 in Ternitz / Austria and 544 in North America
(including Mexico).

_____________________________________________________________________
_________ | | |
2016| 2015| |Key_figures:______|___________________|___
________________|___________________| |Sales_____________|___________
____MEUR|______________183.0|______________313.7|

|Operating earnings| | | |
|before interest, | | | |
|taxes, | MEUR| 0.4| 55.1|
|depreciation and | | | |
|amortisation | | | |
|(EBITDA)__________|___________________|___________________|___________________|
|EBITDA_margin_____|__________________%|________________0.2|_______________17.6|
|Profit_before_tax_|_______________MEUR|______________-45.1|______________-20.0|
|Profit_after_tax__|_______________MEUR|______________-28.0|______________-19.0|
|Earnings_per_share|________________EUR|______________-1.75|______________-1.19|
|Cashflow from | | | |
|operating | MEUR| 31.3| 103.4|
|activities________|___________________|___________________|___________________|
|Liquid_funds______|_______________MEUR|______________193.5|______________196.3|
|Equity_ratio______|__________________%|_______________53.1|_______________60.8|
|Headcount_________|___________________|______________1,200|______________1,135|
_

SBO financial calendar 2017

27 April 2017 Annual General Meeting
9 May 2017 Ex-dividend date
10 May 2017 Record date
11 May 2017 Dividend payment date
24 May 2017 Result Q1 / 2017
24 August 2017 Result H1 / 2017
23 November 2017 Result Q3 / 2017

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