EANS-News: C.A.T. oil shows strong operational and financial performance in Q1 2012

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quarterly report

Subtitle: • Revenues up 23.5% yoy to EUR 75.3 million
• Strong EBITDA growth of 61.4% yoy to EUR 14.0 million
• Improved profitability with EBITDA margin of 18.5%
• All new high class conventional drilling rigs successfully marketed

Vienna, 30 May 2012 (euro adhoc) - C.A.T. oil AG (O2C, ISIN:
AT0000A00Y78), one of the leading providers of oil and gas field
services in Russia and Kazakhstan, today announced its results for
the first quarter of 2012. C.A.T. oil succeeded in both, top- and
bottom-line growth: revenues rose by 23.5% yoy to EUR 75.3 million
(Q1 2011: 61.0 million) and earnings before interest, tax and
depreciation (EBITDA) increased by 61.4 % yoy to EUR 14.0 million (Q1
2011: EUR 8.7 million). The EBITDA margin expanded to 18.5% (Q1 2011:
14.2%). Net income amounted to EUR 2.5 million during the reporting
period (Q1 2011: EUR - 1.0 million). Besides that, C.A.T. oil
obtained additional orders for the remaining two new rigs and has
thus successfully accomplished the marketing of its third core
service, high class conventional drilling, bringing the total 2012
order book to EUR 290 million.

Manfred Kastner, CEO of C.A.T. oil, commented: "In the first quarter
we had good tailwinds, namely strong demand for our services,
increased activity levels, as well as mild winter conditions. We
persistently drove our revenues and earnings, by expanding both, our
traditional and new businesses. In addition, we crossed the target
line in marketing our new conventional drilling capacities. All of
our new rigs obtained orders for 2012 and will be successively put
into operations by the beginning of Q3. The new service will make
first noticeable contributions to our growth this year and beyond.
With our diversified and compelling service portfolio,
state-of-the-art technology and well-trained employees we are thus in
a stronger position to capitalize on the underlying opportunities in
our core markets."

Strong revenue growth

A 23.5% yoy growth in C.A.T. oil's revenues to EUR 75.3 million (Q1
2011: EUR 61.0 million) was based on two factors: a 16.0% yoy rise in
the average per job revenue to TEUR 92 (Q1 2011: TEUR 79) and a 3.9%
yoy increase in the total job count to 800 jobs (Q1 2011: 770 jobs).
Fracturing and sidetracking jobs were up 9.9% yoy and 7.9% yoy,
respectively. The increased per job revenue primarily stemmed from
the greater size and complexity of service jobs, as well as improved
price levels; in addition the strengthened Russian rouble against the
euro had a positive impact.

Cost base reflects high operating activity levels

Despite the higher operating activity levels and the greater job size
and complexity, cost of sales rose at a slower pace than the top line
and only increased by 18.6% yoy to EUR 65.9 million (Q1 2011: EUR
55.5 million) General and administrative expenses rose by 9.7% yoy to
EUR 5.4 million in Q1 2012 (Q1 2011: EUR 4.9 million). The increase
mainly reflected the set-up costs for the new conventional drilling
service. Effectively there had been no change in the Company's total
weighted average headcount, which stood at 2,375 employees in Q1 2012
(Q1 2011: 2,362 employees) due to the following counter trends: on
the one hand, C.A.T. oil saw a headcount reduction related to the
outsourcing of the remaining workover business in Q2 2011; on the
other hand, the new hires for the new conventional drilling business.

Earnings swing and margins expansion

EBITDA increased by 61.4% yoy to EUR 14.0 million (Q1 2011: EUR 8.7
million) on the back of the strong top-line growth. As a result, the
EBITDA margin expanded to 18.5% yoy in Q1 2012 (Q1 2011: 14.2%). The
Company's earnings before interest and tax (EBIT) went up more than
6.5 times yoy to EUR 4.0 million in Q1 2012 (Q1 2011: EUR 0.5
million), and the EBIT margin increased to 5.3% (Q1 2011: 0.9%). Net
income came in at EUR 2.5 million during the reporting period (Q1
2011: EUR - 1.0 million) primarily due to the combined effect of the
higher EBIT and the improved net financial result to EUR 2.0 million
(Q1 2011: EUR 0.3 million). The higher net financial result primarily
owed to foreign currency translation gains of EUR 2.8 million in Q1
2012 (Q1 2011: EUR 0.2 million).

Improved cash generation

Funds from operations increased by 79.9% yoy to EUR 14.3 million (Q1
2011: EUR 7.9 million) primarily reflecting the combined effect of
the higher pre-tax profit and depreciation. Cash flow from operating
activities was a net inflow of EUR 9.0 million (Q1 2011: net inflow
of EUR 0.3 million) due to the higher funds from operations and the
lower investments in net working capital. Capital expenditure
declined 79.1% yoy to EUR 5.8 million (Q1 2011: EUR 27.8 million)
reflecting the lower investment plans for 2012. As the majority of
the EUR 150 million investment program had already been executed in
2011, C.A.T. oil budgeted the remaining EUR 30 million for 2012 to
finalize the setup of the new drilling business and to maintain
capacities in good working order. Cash flow from investing activities
was a net outflow of EUR 5.6 million (Q1 2011: net outflow of EUR
27.4 million). Cash flow from financing activities was a net outflow
of EUR 9.5 million in Q1 2012 (Q1 2011: net inflow of EUR 6.0
million) mainly due to an early redemption of long-term borrowings.
As of 31 March 2012, cash and cash equivalents stood at EUR 23.0
million (31 December 2011: EUR 30.4 million). In Q1 2012, C.A.T. oil
strengthened its balance sheet as witnessed by the increased equity
ratio to 66.9% (31 December 2011: 62.3%).

Confident outlook for FY 2012

C.A.T. oil confirms its positive view of the 2012 Fiscal Year
business prospects. The Company expects the global oil demand to
remain strong and provide sufficient support to the oil price. The
additional demand for the Company's services comes from the increased
upstream activities and investments by its customers. As C.A.T. oil
has efficiently marketed all the new high class conventional drilling
rigs it expects the first noticeable revenues and earnings
contributions to become visible this year. Three of the new rigs have
already been in operations since Q1 2012; the remaining six rigs will
be successively put into operations by the beginning of Q3.

At the end of May, C.A.T. oil's 2012 order book, which comprises of
orders for fracturing, sidetracking and conventional drilling, stood
at EUR 290 million (based on a rouble-to-euro exchange rate of 40)
compared to EUR 284 million at the end of April. C.A.T. oil is
confident that it is well positioned to receive additional orders in
the coming months and anticipates the total revenues for Fiscal Year
2012 to surpass the current order book level.

www.catoilag.com

Press contact:
FTI Consulting
Carolin Amann
Phone: +49 (0)69 92037-132
Email: carolin.amann@fticonsulting.com

Thomas M. Krammer
Phone: +49 (0)69 92037-183
Email: thomas.krammer@fticonsulting.com

About C.A.T. oil AG: C.A.T. oil AG is one of the leading providers of
oil and gas field services in Russia and Kazakhstan and is listed on
the Frankfurt Stock Exchange (SDAX). C.A.T. oil offers a wide
spectrum of services to increase the lifecycle of an oil field or to
make unexploited oil fields accessible. The Company's growth is
driven by the following factors: Existing oil fields need to be
stimulated due to shrinking oil and gas resources in order to
optimize capacities. Simultaneously, idle wells are reactivated or
made accessible through new methods in order to deploy wells to their
maximum. Additionally, C.A.T. oil has established conventional
drilling as third core service which allows to access completely
unexploited oil and gas reserves. Since its foundation in 1991 in
Celle, Germany, C.A.T. oil has built up a leading hydraulic
fracturing services business in Russia and Kazakhstan. Following its
IPO in 2006 the Company has invested more than EUR 250 million in
additional services and capacities: sidetrack drilling has become the
Company's second core business. In 2011, the Company initiated a
comprehensive investment program with a volume of EUR 150 million,
focusing on the set up of conventional drilling as third service
offering. The new service line will fully be installed in 2012.
C.A.T. oil's portfolio also includes cementing and seismic services.
With its state-of-the art technology the Company clearly
differentiates itself in its core markets as the equipment allows for
very time-efficient and effective deployment. C.A.T. oil's customer
base includes the leading Russian and Kazakh oil and gas producers
amongst them Gazprom, KazMunaiGaz, LUKOIL, Rosneft and TNK-BP. C.A.T.
oil has a long-standing relationship with these customers and has
been a reliable service provider since its market entrance in the
early nineties. The Company has its headquarters in Vienna. As of 31
March 2012, the Company employed an average of 2,375 people, most of
which are based in Russia and Kazakhstan.

Key financial figures for Q1 2012

[million EUR]
Q1 2012 Q1 2011 Change in %
Revenues 75.3 61.0 23.5
Cost of sales 65.9 55.5 18.6
Gross profit 9.5 5.5 73.5
EBITDA 14.0 8.7 61.4
EBITDA margin (%) 18.5 14.2
EBIT 4.0 0.5 >100
EBIT margin (%) 5.3 0.9
Net income 2.5 -1.0 >100
Earnings per share (EUR) 0.051 -0.020 >100
Equity Ratio (%)* 66.9 62.3

Cash flow from
operating activities 9.0 0.3 >100
Cash flow from
investing activities -5.6 -27.4 -79.4
Cash flow from
financing activities -9.5 6.0 >-100
Cash and cash equivalents* 23.0 30.4 -24.3

Total job count 800 770 3.9
Per-job revenue (thou. EUR) 92 79 16.0
Employees 2,375 2,362 0.6

* As of 31 March 2012 and 31 December 2011 respectively

Further inquiry note:
Thomas M. Krammer
Tel: +49(0)69-92037-183
Email: thomas.krammer@fticonsulting.com

end of announcement euro adhoc
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company: C.A.T. oil AG
Kärtner Ring 11-13
A-A-1010 Wien
phone: +43(0) 1 535 23 20 - 0
FAX: +43(0) 1 535 23 20 - 20
mail: ir@catoilag.com
WWW: http://www.catoilag.com
sector: Oil & Gas - Upstream activities
ISIN: AT0000A00Y78
indexes: SDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt
language: English