DGAP-News: Petro Welt Technologies AG
/ Key word(s): Annual Report/Annual Results
Petro Welt Technologies AG: Consolidated financial results 2020: Profit before tax shows one of the best performances in the oilfield services industry
27.04.2021 / 20:30
The issuer is solely responsible for the content of this announcement.
- In 2020, revenue in euros amounted to EUR 252.3 million (2019: EUR 298.4 million).
- EBIT increased to EUR 11.4 million.
- Although EBITDA decreased slightly to EUR 45.2 million, the EBITDA margin increased from 15.3% in 2019 to 17.9% in 2020.
- Consolidated profit before tax rose to EUR 13.6 million.
- Continuing international expansion: first operations of the Group's subsidiary in Romania and establishing a base in Oman.
Vienna, April 27, 2021
Petro Welt Technologies AG (PeWeTe), which specializes in oilfield services mainly in Russia and Kazakhstan, has maintained its strong market position and financial strength despite adverse factors resulting from the COVID-19 pandemic, OPEC+ restrictions and the devaluation of the Russian Ruble. Expressed in euros, consolidated revenue declined by 15.4% to EUR 252.3 million. Due to optimization measures, EBIT showed an increase of EUR 3.8 million to EUR 11.4 million. EBITDA amounted to EUR 45.2 million (2019: EUR 45.6 million). The consolidated profit before tax increased to EUR 13.6 million, and net profit rose to EUR 6.7 million. Overall, the profitability of the Group was improved. The cash flow from operating activities decreased to EUR 23.5 million in 2020, down from EUR 36.1 million in 2019.
The Company faces challenges through international expansion, investments in equipment and infrastructure, software and personnel development as well as environmental safety in order to maintain its reputation as a technology leader. Petro Welt Technologies AG's financial statements record no distributable profit. Therefore, no dividend will be distributed for 2020.
General performance above industry average
Despite the challenges posed by the COVID-19 pandemic in 2020, PeWeTe again achieved an above-average performance compared with its main peers. Thanks to targeted restructuring measures and a rapid response to the changed market environment, the Group succeeded in maintaining its financial strength and continued to be based on a self-financing model. An equity ratio of more than 50%, the controlled development of net debt, and solid cash flows are further evidence that PeWeTe is in a strong position today.
The COVID-19 crisis also showed that the Group is well positioned in the market thanks to its processes, technologies, and services. In 2020, Wellprop, the Group's proppant manufacturing subsidiary, introduced a new product to the Russian market (ROSPROP HS RCP), which serves a new niche in high-stress fracturing markets.
Success through adaptation and diversification
Not only did PeWeTe launch new products and services, it also expanded into new territories in 2020. PeWeTe EVO Europe started operations with five workover jobs in the Drilling, Sidetracking, and IPM segment in Romania. PeWeTe EVO Services, the Group's subsidiary in Oman established in 2020, succeeded in obtaining and commissioning the equipment for one coiled tubing and one fracturing fleet, and started its first coiled tubing operations in April 2021.
Despite the worsening of drilling market conditions in 2020, PeWeTe's operating subsidiaries in the Drilling, Sidetracking, and IPM segment remained relatively stable (including KATOBneft and KAToil-Drilling). The total number of service jobs in this segment increased by 5.6% to 281 jobs in 2020 (2019: 266), but the average segment revenue per job in 2020 fell by 15.7% to TEUR 467.0 (2019: TEUR 554.0).
Although the fracturing market declined sharply both in Russia and Kazakhstan, the total number of fracturing and remedial services jobs in the Well Services and Stimulation segment, which includes KATKoneft and PeWeTe Kazakhstan, decreased only slightly by 1.1% (or 50 jobs) from 4,486 in 2019 to 4,436 in 2020. The average revenue per job declined by 18.7% from TEUR 31.1 in 2019 to 25.3 in 2020.
However, due to a swift adaptation of PeWeTe's oilfield service business model, which created ground for further economic optimization, the operating margins of both oilfield services segments increased: in the Well Services and Stimulation segment from 5.3% in 2019 to 8.3% in 2020, and in the Drilling, Sidetracking, and IPM segment from 4.9% in 2019 to 12.0% in 2020 (without the effect of an impairment loss at the CGU PeWeTe EVO EUROPE charged to the cost of sales in 2020).
Solid balance sheet and financing structure maintained
Due to decreases in both non-current assets and current assets, total assets declined by 19.5% to EUR 364.3 million as of December 31, 2020, compared to the close of 2019. Equity decreased by 28.0%, from EUR 254.3 million in 2019 to EUR 183.0 million in 2020. This decline is mainly due to the deterioration of 44.4% in the currency translation reserve, from minus EUR 175.5 million in 2019 to minus EUR 253.4 million in 2020. The equity ratio shrank to 50.2% as of December 31, 2020 (2019: 56.2%), but still remained above the 50% mark.
The current liabilities of Petro Welt Technologies AG decreased by 27.3% as of December 31, 2020, because trade payables declined by 30.0% due to the devaluation of the Russian ruble. Overall, net debt increased from EUR 24.2 million in 2019 to EUR 42.4 million; gross debt dropped by EUR 10.2 million in 2020 to EUR 158.0 million as of December 31, 2020. The net debt-to-equity ratio thus deteriorated from 9.6% as of December 31, 2019, to 23.2% as of December 31, 2020, which corresponds to a net debt-to-EBITDA ratio of 93.7%, up from 53.1% in 2019. The Group's gross leverage ratio is expected to remain below 3.0x and its net leverage ratio below 0.5x in 2020-21. Thus, Moody's once again confirmed PeWeTe's Ba3 rating.
Outlook for 2021
In these extremely difficult conditions, PeWeTe is working to maintain secure levels of contracting and capacity utilization. Group revenue in rubles is expected to be around RUB 21.4 billion in 2021, which translates to between EUR 233.1 million and EUR 240.9 million, based on an average exchange rate of EUR 1.0 between RUB 89.0 and RUB 92.0. The EBITDA margin is projected to be in the range of 16.0% to 16.6%. This forecast does not take into account potential external economic shocks.
The 2020 Annual Report of Petro Welt Technologies AG is available for download on our corporate website at www.pewete.com.
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About Petro Welt Technologies AG
Petro Welt Technologies AG, domiciled in Vienna, is one of the leading and first established oilfield services companies in Russia and the CIS and is specialized in services which increase the productivity of new as well as existing oil and gas formations.
Konstantin Huber (be.public)
T: +43 1 503 2 503-29
27.04.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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