- In 2019, Group revenue increased by 6.0% in RUB and by 8.1% in EUR.
- EBITDA declined by 13.1% from EUR 52.5 million to EUR 45.6 million. The consolidated net profit dropped by 50.0% from EUR 10.8 million to EUR 5.4 million.
- Debt restructuring measures improved PeWeTe's financial sustainability in 2019: The equity ratio rose by 2.4 percentage points to 56.2% as of December 31, 2019. The net debt-to-EBITDA ratio was 53.1%. Moody's rating was confirmed at Ba3 in May 2020.
- PeWeTe's proppant exports on the rise: The Group's proppant exports accounted for 26.4% of revenues in 2019, up from 12.8% in 2018.
- Continued international expansion: certification process in Romania completed, new business entity in Oman
Vienna, June 3, 2020
In 2019, the production performance of the operating subsidiaries of Petro Welt Technologies AG with respect to revenue in the Russian OFS market for top oil-producing clients was stronger than a year earlier. However, state-owned oil companies continued to put pressure on prices for oilfield services, especially in fracturing.
In the Drilling, Sidetracking, and Integrated Project Management (IPM) segment, the number of drilled wells at Petro Welt Technologies AG rose by 22.0% to 266 in 2019, up from 218 in 2018. The total number of service jobs in fracturing and remedial services in the Well Services and Stimulation segment, which comprises KATKoneft and PeWeTe Kazakhstan, declined by 8.6%, from 4,909 in 2018 to 4,486 in 2019.
Thanks to the strong operating performance of the Drilling, Sidetracking, and Integrated Project Management (IPM) segment, total revenue in the Group reporting currency (the euro) rose by 8.1% to EUR 298.4 million in 2019, up from EUR 276.0 million in the previous year. As a result, this segment contributed half of total revenue for the first time in its history.
The Group's administrative expenses declined by 4.0% to EUR 23.9 million in 2019, down from EUR 24.9 million in 2018, due to lower consulting fees and rental expenses. However, the need to write down receivables raised the other operating expenses, in turn pushing EBIT down by 31.5% to EUR 7.6 million (2018: EUR 11.1 million).
The positive effect of the improved financial result in 2019 (up by 21.4% to EUR 5.1 million compared to the previous year) enabled the Group to show a profit before tax of EUR 12.7 million in 2019, down by 17.0% from EUR 15.3 million in 2018. During the reporting period, the EBITDA margin declined to 15.3%, down from 19.0% in the previous year.
In addition to the decrease in the profit before tax, several other factors affected the operating cash flow in 2019 as well, lowering it year over year. Working capital continued to deteriorate, from minus EUR 1.4 million in 2018 to minus EUR 1.6 million in 2019. The operating cash flow thus decreased by 13.8% to EUR 36.1 million in 2019, down from EUR 41.9 million in 2018.
Due to increases in both non-current assets and current assets, total assets rose by 18.6% to EUR 452.7 million as of December 31, 2019, compared to the close of 2018. Equity increased by 23.8%, from EUR 205.4 million in 2018 to EUR 254.3 million in 2019. This growth is mainly due to the improvement of 19.7% in the currency translation reserve, from minus EUR 218.5 million in 2018 to minus EUR 175.5 million in 2019.
The current liabilities of Petro Welt Technologies AG jumped by 31.2% as of December 31, 2019, while its non-current liabilities rose slightly by 3.8% due to the extension of the loan from Petro Welt Holding (Cyprus) Limited.
As of December 31, 2019, total net debt was EUR 24.2 million, which corresponds to a net debt-to-EBITDA ratio of 53.1%. This is substantially lower than the threshold of two times which is generally considered the risky level by rating agencies.
Debt restructuring measures improved PeWeTe's financial sustainability
In September 2019, PeWeTe strengthened its financial structure by extending the term of the loan from Petro Welt Holding Limited (Cyprus) to December 31, 2023, and by lowering the interest rate to 3.41% above the 6-month EURIBOR rate. PeWeTe's equity ratio rose from 53.8% at the end of 2018 to 56.2% at the end of 2019. As a result, the Company's net debt-to-equity ratio improved from 13% on December 31, 2018, to 9.6% on December 31, 2019.
International expansion continued: certification process completed in Romania ...
By establishing a business entity in Romania in 2018, the Group had made a significant step toward strategic diversification and serving the important European market from an EU member state. Having obtained all necessary certifications in Romania in 2019, PeWeTe started its operational activities in Romania in the first quarter of 2020.
... and establishment of a new business entity in Oman
The most recent step in PeWeTe's expansion followed on August 5, 2019, when it finalized the registration of its new local business entity, PeWeTe EVO SERVICES LLC, in Muscat, Oman. With its international footprint, the Group is well positioned in the highly competitive OFS market.
Outlook for 2020
Against the background of a weakening economy due to COVID-19 and production cuts agreed by OPEC+, the Company's management expects Group revenue, as expressed in euros, to be between EUR 278 million and EUR 285 million in 2020 and hopes to achieve an EBITDA margin between 16% and 16.5%. This forecast does not take into account potential external economic shocks.
The 2019 Annual Report of Petro Welt Technologies AG is available for download on our corporate website at www.pewete.com
|Key positions || ||2019 ||2018 ||+/- % |
|Revenue ||EUR million ||298.4 ||276.0 ||8.1% |
|EBITDA ||EUR million ||45.6 ||52.5 ||(13.1%) |
|EBIT ||EUR million ||7.6 ||11.1 ||(31.5%) |
|EBITDA margin || ||15.3% ||19.0% || |
|EBIT margin || ||2.5% ||4.0% || |
|Group result ||EUR million ||5.4 ||10.8 ||(50.0%) |
|Earnings per share ||EUR ||0.11 ||0.22 ||(50.0%) |
|Equity ||EUR million ||254.3 ||205.4 ||23.8% |
|Cash flow from operating activities ||EUR million ||36.1 ||41.9 ||(13.8%) |
|Employees (average) || ||3,360 ||3,112 ||8.0% |
About Petro Welt Technologies AG
Petro Welt Technologies AG, which is domiciled in Vienna is one of the leading and first established OFS companies in Russia and the CIS and is specialized in services which increase the productivity of new as well as existing oil & gas formations.
Konstantin Huber (be.public)
T: +43 1 503 2 503-29