Company announcement no.8/2015:In the second quarter of 2015, Welltec’s revenues stabilized at the first quarter level as industry fundamentals continued to be challenging. The stabilization was driven by growth across select geomarkets coupled with penetration of new clients, partly offset by the negative impact from the continued industry downturn.
EBITDA increased sequentially as a result of proactive decisions to adjust the global organization to the prevailing demand levels. Welltec® continuously aligns its spend in order to ensure margins and cash flow resilience ensuring adequate financial flexibility through challenging times.
In the second quarter, the solid operating cash flow was driven by the sequential margin improvement combined with strict working capital management. Furthermore, balanced investment levels coupled with the disbursement of the EIB loan paved the way for a significant increase in cash and cash equivalents.
Michael Krabbe, Chief Financial Officer,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944
Despite the continued challenging market backdrop and limited visibility, Welltec® expects stabilization towards the latter part of the year with performance in H2 expected to be around the same level as H1 in terms of revenue and EBITDA margin.
Jørgen Hallundbæk, CEO: “As expected, our second quarter reflects the prevailing industry dynamics as operators continue to adjust their activities amid the industry downturn. The prolonged uncertainty coupled with weak supply and demand fundamentals underpins the importance of promoting production optimization in order to improve corporate cash flows and enhance return on investment. Moreover, the industry needs to adapt to the low oil price environment by rethinking their operational setup and implement new game changing technologies.
We continue to develop and deliver our industry leading technology to our clients, allowing them to reduce capex and cost, without jeopardizing safety. This was demonstrated in the second quarter as we saw clients adopting our complementary completion and intervention technology, benefiting from reduced lifting cost, ultimately improving financial performance in this low oil price environment.”
Investor conference call
Welltec® will discuss its results during an investor conference call today at 5 pm CET. An accompanying slide presentation is available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”. The conference call can be accessed by dialing in a few minutes before the 5 pm CET start and informing the operator that you are dialing in for Welltec’s investor conference call, ID 4646971.
Conference Call Access Numbers:
Denmark: +45 3271 1659
United Kingdom: +44 (0)20 3427 1914
USA: +1 646 254 3362
The call will be webcast simultaneously and available online following today’s live transmission.
Welltec® is a leading provider of intervention and completion solutions to the oil and gas industry. Our pioneering technology challenges conventions to increase recovery in a safer and more sustainable way, enabling operators to optimize the management and development of their assets throughout the life cycle.
We address the factors that maximize value creation, disruptively innovating to increase reservoir contact over an extended life cycle, in a fraction of the time, energy and logistical effort of the conventional alternatives. The effect is one of increased net present value through higher returns and reduced risks. Our Flex-Well® approach serves to maximize production and increase total recovery while lowering operational and total development costs. Our game-changing solutions extend the productive life of wells and enable clients to pursue fields that would not otherwise be economically viable.
Our unique approach provides for safer operations, removing considerable infrastructure costs and operational effort. Our lightweight technology lowers the complexity and hazard potential of operations, reducing the risk to personnel and allowing smaller work crews, fewer lifts and lighter loads. We reduce dependency on rigs, significantly reducing the industry’s energy consumption and carbon emissions. The ability to operate in extended reach and horizontal wells allows operators to drill multiple wells from the same topside location, thereby further reducing the environmental footprint.
Our technology created the market for robotic well intervention and continued market leadership is the result of constant innovation, rigorous IP protection and a commitment to completely addressing our clients’ challenges. Our completion concept represents the next paradigm shift for the industry, with a simple yet revolutionary approach that allows operators to tap into the full value of their reservoirs at a much lower level of invested capital and with an unprecedented degree of flexibility. As an example, the simple application of expandable metallic well annual barriers (WAB®) overcomes the traditional shortfalls of cementing to enable a lower completion as minimal or intricate as the reservoir characterization itself. Fields can be developed and maintained from fewer topside locations and brought on line faster, for longer.
In an industry characterized by maturing fields and increasing depletion, the premium attached to technology which aids in reversing these trends will continue to gain momentum. Our technology safeguards people and returns on investment, enabling clients to unlock more value from their assets and to address reservoir complexities and uncertainties with a greater number of options.
Any statement in this announcement that is not a historical fact is a “forward-looking statement”. Such statements may include opinions and expectations regarding Welltec® and its future business, management’s confidence and strategies as well as details of management’s expectations of new and existing programs, technology and market conditions. These forward-looking statements rely on assumptions concerning future events that are subject to a number of risks and uncertainties, many of which are outside Welltec’s control, and which could cause Welltec’s actual results to be materially different from these forward-looking statements. While Welltec® believes that its assumptions concerning future events are reasonable; there are inherent difficulties in predicting certain important factors that could impact the future performance or results of Welltec’s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. Welltec® expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.