Ability Group ASA. First quarter 2006

Transcription

1 Ability Group ASA First quarter

2 Ability Group (AGR) Innovation and Profitability AGR is a provider of technology, equipment, services and personnel primarily to the oil and gas industry. The Group s activities are organized into 4 business units: AGR Petroleum, AGR Drilling, AGR Integrity and AGR Project. An illustration of the organisational structure with a summary description is shown below. AGR AGR Petroleum AGR Drilling AGR Integrity AGR Project Managing drilling operations, with full range of critical functions, on behalf of (independent) oil companies Rental of drilling technology products and crew + Refurbishing and resale of obsolete drill pipes Pipeline inspection technology and services + Maintenance management on topside and onshore installations Project and specialized manning resources for the oil and gas industry NCS Gateway to new entrants Enabler of drilling in complex and sensitive areas Infrastructure life extender Supplier of temporary swing capacity The majority of AGR s business takes place in Norway, but an increasing share of revenue stems from its international operations. The Group is headquartered at Sotra (Bergen), but also has a offices in Sandnes, Stavanger, Oslo and Trondheim. Additionally, AGR has smaller offices and branches in the UK, US, Canada and Azerbaijan. Key Figures Key figures Actual Actual Pro forma Actual Actual Pro forma NOK Operating income EBITDA* EBIT Profit before taxes EBITDA-margin 14,7 % 11,6 % 11,9 % 14,0 % 5,2 % 15,8 % EBIT-margin 10,0 % 3,3 % 4,7 % 7,7 % -11,6 % 10,2 % Equity-to-asset-ratio 13,7 % 29,4 % N/A 27,8 % 34,3 % N/A * Earning before interest tax depreciation and amortization. 2

3 P quarter Main points from 1st quarter 2006 Historically, 1st quarter is associated with lower activity, due to holidays, climate and generally higher internal planning st activity for our customers. However, 1P 2006 figures reflect the high activity level generally experienced today in the oil and gas sector. The acquisition of TAGR Drilling Production Technology AS (DPT) and AGR Triangle Technology AS (Triangle) the 31st of August 2005 Timplies that the group has to prepare pro forma comparable numbers for the reported periodst.t Consequently, the reported income statement for the first quarter 2006 includes both actual and pro forma comparable figures for the same period in As for the pro forma figures, AGR will assume that the acquisition of DPT and Triangle was finalized January 1st Further, it is assumed that approximately 20 % of the total investment is financed with equity and that 80 % is financed with interest-bearing debt. Operating income amounted to MNOK 289,9 in the 1st quarter 2006 compared to MNOK 160,5 in the same period in Pro forma operating income for the 1st quarter 2005 amounted to MNOK 184,2. Operating profit before depreciation (EBITDA) in the 1st quarter 2006 was MNOK 42,8 compared to MNOK 18,6 in Pro forma EBITDA in the same period in 2005 amounted to MNOK 21,9. The figures above corresponds respectively to EBITDA-margins of 14,7%, 11,6% and 11,9%. 1st quarter profit after taxes in 2006 was MNOK 10,3 compared to a deficit of MNOK 0,2 in the same period last year. Pro forma profit after taxes for the 1st quarter 2005 amounted to MNOK 1,6. Net interest-bearing debt was MNOK 692,0 at the end of 1st quarter 2006, and equity-to-assets ratio was 13,7 percent. At the same date in 2005 net interest-bearing debt was MNOK 528,8 and the equity-to-assets ratio was 11,0 percent. Included in the net interest-bearing debt were subordinated convertible loans from owners of MNOK 168,8 in 1st quarter 2006 versus MNOK 151,4 in 1st quarter Adjusted for these loans, the equity-to-assets ratio for 1st quarter 2006 was 28,7% and 29,4% for 1st quarter In January, AGR Petroleum (PS) managed to establish a consortium of seven oil companies for the three-year rent of the rig Bredford Dolphin. PS is expected to provide planning, well and drilling management and reporting of all the wells during the rent period. Also in February, AGR announced its intentions to apply for listing on the Oslo Stock Exchange during The listing is expected to strengthen the equity and provide fund for further expansion. 3

4 Applied accounting principles This quarterly report is in accordance with International Financial Reporting Standards (IFRS) and the standard for quarterly reporting (IAS 34). The quarterly accounts are based on the current IFRS standards and interpretations. Changes in standards and interpretations may result in other figures. The same accounting principles as for the most recent financial statement is applied through this document. Income statement 1st quarter 2006 Operating income for 1st quarter 2006 was MNOK 289,9 is the highest ever achieved in AGR s history. Although 1 st quarter typically is the slower period of the year, the growth for the first three months compared to last year (MNOK 160,6) reflects the acquisitions made during 2005, our ability provide equipment and services to competitive price/quality levels as well as the general activity in the oil and gas sector. AGR also experienced higher operating profit levels for 1st quarter 2006 (MNOK 42,8), compared 1st quarter last year actual figures (MNOK 18,6) and pro forma (MNOK 21,9). The increase relates primarily to higher utilization within the equipment intensive businesses, which yield higher margins, and a generally high activity level. Net financial expenses were MNOK 14,6 in 1st quarter 2006 compared to MNOK 5,6 the 1st quarter Pro forma financial expenses for the 1st quarter 2005 were MNOK 6,4. The increase reflects primarily a loss on a financial investment in Sonoran Energy Inc. of MNOK 6 as well as somewhat higher interest rate levels. Profit before taxes amounted to MNOK 14,3 in the first quarter Taxes in 1st quarter 2006 were MNOK 4,0, which results in a profit after taxes of MNOK 10,3 for this period. For the same period last year these figures were respectively MNOK -0,3, MNOK 0,1 and MNOK -0,2, while the pro forma figures for this period were MNOK 2,2, MNOK 0,6 and MNOK 1,6. Earnings per share for 1st quarter was NOK 0,97 compared to NOK -0,02 the 1st quarter Pro forma earnings per share 1st quarter 2005 was NOK 0,15. Balance Sheet at the end of 1st quarter 2006 The group had a total balance of MNOK 1.120,5 at compared to MNOK 1.116,9 at the beginning of the period. The increase is mainly due to investments in machinery and equipment at the Mongstad factory as well as increased working capital, reflecting a generally high activity level. Net interest-bearing debt for the group was MNOK 692,0 at the end of 1st quarter 2006 compared to MNOK 645,0 at the end of The increase is primarily due to low cash flow for the period reflecting increased working capital and high investment activity as well as some accrued interest on the subordinated convertible loans. Netto rentebærende gjeld / Net interest-bearing debt Faktisk/Actual Faktisk/Actual Faktisk/Actual NOK Konvertible lån / Convertible loans Langsiktig gjeld til finansinstitusjoner / Long term debt to credit institutions års avdrag langs. renteb. gjeld / Installments 2006 on interest-bearing debt (short term) Sum rentebærende gjeld / Total interest-bearing debt Likvide midler / Cash and cash equivalents Netto rentebærende gjeld / Net interest-bearing debt

5 At the end of 1st quarter 2006 the Group s equity was MNOK 153,2 compared to MNOK 142,8 at the beginning of the period and MNOK 89,9 at the same time last year. The equity-to-assets ratio was 13,7 percent. NOK Egenkapital ved periodens begynnelse / Equity at period start Konsernets resultat i perioden / Profit after taxes Emisjon / Share issue Egenkapitaleffekt ved opptak av konvertibelt lån / Equity effect of convertible loans Egenkapital ved periodens slutt / Equity at period end Cash-flow 1st quarter 2006 The Group had a total net cash-flow of minus MNOK 43,1 the 1st quarter 2006 compared to MNOK 19,0 the same period last year. Cash-flow from operating activities amounted to minus MNOK 5,4, while 1st quarter cash-flow from operating activities in 2005 was MNOK -1,8. The deviation between the EBITDA for the 1st quarter 2006 and the negative cash flow in during the same period is mainly due to increased working capital, reflecting higher activity level and some investments in inventory at the Mongstad factory. In 1st quarter 2006 cash-flow from investment- and financing activities were minus MNOK 39,2 and plus MNOK 1,5 respectively. In the same period for 2005 these figures were MNOK -116,0 and MNOK 136,8. Cash and cash equivalents amounted to MNOK 23,4 at Kontantstrømsoppstilling / Cash-flow analysis NOK Netto kontantstrøm fra operasjonelle aktiviteter / Net cash-flow from operational activities Netto kontantstrøm fra investeringsaktiviteter / Net cash-flow from investment activities Netto kontantstrøm fra finansieringsaktiviteter / Net cash-flow from financing activities Netto endring i betalingsmidler / Net changes in cash and cash equivalents Betalingsmidler ved periodens begynnelse / Cash and cash equivalents at start of period Betalingsmidler ved periodens slutt / Cash and cash equivalents at end of period Events after the Balance Sheet Date In April, AGR PipeTech AS acquired the Manchester based company Technology Design Ltd. Technology Design provides leading ultrasonic based technology and equipment and will be a significant contributor to AGR s inspection business. In April, AGR Holdings AS signed a share purchase agreement for the acquisition of Reservoir Evaluation AS. This will add further competence and capacity within reservoir evaluation and analysis (AGR Petroleum ). The same month and in relation to ongoing acquisition processes, AGR negotiated a revised loan agreement with DnBNOR. The revised agreement includes funding for potential new acquisitions and further funding for operations. Additionally, number of covenants was reduced to three ratios/figures: Net Debt/EBITDA, Capex and Equity/Total Assets. 5

6 Segment information The Group reports segment information on the following business segments; petroleum services, drilling services, integrity services and project services. Further, the Group reports information regarding allocation of operating income on geographical areas. Business segments P (1) P: Primary segment reporting per (NOK 1.000) Virksomhetsområder / Business segments Petroleum Drilling Integrity Project Other / Elimin. Total Driftsinnt., ekst. / Operating revenue, external Driftsinnt., int. / Operating revenue, internal Driftskost. f. avskr. / Op. ex. before depr EBITDA Avskrivninger / Depreciation Nedskr. og avsetn./ Write downs and provisions EBIT Netto finansposter / Net financial items Resultat før skatt / Profit before taxes Skattekostnad / Taxes Konsernets resultat / Profit after taxes Eiendeler / Assets Gjeld / Liabilities Investeringer / Investments Note (1) For comparable figures, please see Appendix C As the table above shows, 1st quarter 2006 yielded positive EBITDA for all the business segments. Petroleum has initiated planning activities for the Bredford Dolphin consortium and also currently operating the Maersk Giant s drilling operations. Hence, a significant increase in EBITDA for the first three months of 2006 (MNOK 14.4) compared to 1st quarter 2005 (pro forma MNOK 3,3). Also, historically, this segment requires minimum investments. Drilling is experiencing an increase in demand for its technology, primarily the RMR but also other well cleaning equipment. Compared to 1st quarter 2005 (pro forma MNOK 12,9) and adjusted for the building of the Mongstad factory, the segment ended approximately at the same EBITDA for the first three months of However, customer demand and investment level indicate higher activity level going forward, primarily second half of The MNOK 31,1 in investments relates mainly to investment in new RMRs and in machinery and equipment at the Mongstad factory. For Integrity, the increase for 1st quarter 2006 in operating income (47,9%) and EBITDA (186,9%) compared to same quarter last year, relates mainly to a generally high activity level within inspection and maintenance planning and strong performance within the pipeline inspection business. The pipeline inspection business has over the last months seen an increase in utilisation of equipment and personnel. Project is experiencing strong demand, both within the manning business and for project related services. Operating income (external) for the first three months of 2006 ended at MNOK 144,3 compared to MNOK 87,6 last year. EBITDA increased from MNOK 2,9 in Q to MNOK 7,9 in Q

7 Geographical segments: Secundary segment reporting (NOK 1.000) Geografisk fordeling av driftsinntekter / Geographical distribution of operating income Norge / Norway Europa ekskl. Norge / Europe ex. Norway Asia / Australia Amerika / America Sum / Total The increase in revenue from Norway for Q compared to 1st quarter in 2005 is to increases within all business segments. The increase in revenue from Europe excluding Norway stems primarily from Drilling and the RMR activity in the Middle East. Bergen, 24 April 2006 Board of Ability Group ASA 7

8 Appendix A Finansiell rapportering 1. kvartal 2006 / Financial reporting 1. quarter 2006 Kvartalsrapporten følger IFRS / The quarterly report is according to IFRS, ref IAS 34 Income Statement Actual Actual Pro forma Actual Pro forma NOK Operating revenue Operating expenses before depreciation Operating profit before depreciation (EBITDA) Depreciation Write downs and provisions Operating profit (EBIT) Net financial items Profit before taxes Taxes Profit after taxes (PAT) Balanse / Consolidated Balance Sheet Actual Actual Actual NOK Anleggsmidler / Fixed assets Utsatt skattefordel/ Deferred tax asset Patenter, forskning og utvikling / Patents, research and development Goodwill / Goodwill Tomter, bygninger og annen fast eiendom / Land and buildings Maskiner og annet driftsløsøre / Machinery and other equipment Finansielle anleggsmidler / Financial fixed assets Sum anleggsmidler / Total fixed assets Omløpsmidler / Current assets Varer / Inventory Kundefordringer / Accounts receivable Andre fordringer / Other receivables Markedsbaserte aksjer / Shares held for trading purposes Likvider / Cash and cash equivalents Sum omløpsmidler / Total current assets Sum eiendeler / Total assets Egenkapital / Equity Innskutt egenkapital / Paid in capital Opptjent egenkapital / Other equity Sum egenkapital / Total equity Langsiktig gjeld / Long-term liabilities Avsetning for forpliktelser / Provisions Konvertible lån / Convertible loans Langsiktig gjeld til finansinstitusjoner / Liabilities to credit institutions Sum langsiktig gjeld / Total long-term liabilities Kortsiktig gjeld / Short-term liabilities Kortsiktig gjeld / Short-term liabilities Sum kortsiktig gjeld / Total short-term liabilities Sum gjeld / Total liabilities Sum egenkapital og gjeld / Total equity and liabilities Nøkkeltall / Key figures Faktisk/Actual Faktisk/Actual Proforma Faktisk/Actual Proforma NOK Gjennomsnittlig antall aksjer / Average number of shares Resultat pr. aksje / Earnings per share/diluted EPS 0,97-0,02 0,15 2,73 4,56 EBITDA-margin 14,7 % 11,6 % 11,9 % 14,0 % 15,8 % EBIT-margin 10,0 % 3,3 % 4,7 % 7,7 % 10,2 % Egenkapitalandel / Equity ratio 13,7 % 11,0 % N/A 12,8 % N/A Netto rentebærende gjeld / Net interest bearing debt N/A N/A 8

9 Appendix B Kontantstrøms- og egenkapitaloppstilling / Cash-flow and equity statements Kontantstrømsoppstilling / Cash-flow analysis NOK Netto kontantstrøm fra operasjonelle aktiviteter / Net cash-flow from operational activities Netto kontantstrøm fra investeringsaktiviteter / Net cash-flow from investment activities Netto kontantstrøm fra finansieringsaktiviteter / Net cash-flow from financing activities Netto endring i betalingsmidler / Net changes in cash and cash equivalents Betalingsmidler ved periodens begynnelse / Cash and cash equivalents at start of period Betalingsmidler ved periodens slutt / Cash and cash equivalents at end of period Egenkapitaloppstilling / Equity reconciliation NOK Egenkapital ved periodens begynnelse / Equity at opening balance Konsernets resultat i perioden / Profit after taxes Emisjon / Share issue Egenkapitaleffekt ved opptak av konvertibelt lån / Equity effect of convertible loans Egenkapital ved periodens slutt / Equity at period end

10 Appendix C Segmentinformasjon / Segment information Primary segment reporting per (NOK 1.000) Virksomhetsområder / Business segments Petroleum Drilling Integrity Project Other / Elimin. Total Driftsinnt., ekst. / Operating revenue, external Driftsinnt., int. / Operating revenue, internal Driftskost. f. avskr. / Op. ex. before depr EBITDA Avskrivninger / Depreciation Nedskr. og avsetn./ Write downs and provisions EBIT Netto finansposter / Net financial items Resultat før skatt / Profit before taxes Skattekostnad / Taxes Konsernets resultat / Profit after taxes Eiendeler / Assets Gjeld / Liabilities Investeringer / Investments Primary segment reporting per (NOK 1.000) Virksomhetsområder / Business segments Petroleum Drilling Integrity Project Other / Elimin. Total Driftsinnt., ekst. / Operating revenue, external Driftsinnt., int. / Operating revenue, internal Driftskost. f. avskr. / Op. ex. before depr EBITDA Avskrivninger / Depreciation Nedskr. og avsetn./ Write downs and provisions EBIT Netto finansposter / Net financial items Resultat før skatt / Profit before taxes Skattekostnad / Taxes Konsernets resultat / Profit after taxes Eiendeler / Assets Gjeld / Liabilities Investeringer / Investments Proforma segment reporting per (NOK 1.000) Virksomhetsområder / Business segments Petroleum Drilling Integrity Project Other / Elimin. Total Driftsinnt., ekst. / Operating revenue, external Driftsinnt., int. / Operating revenue, internal Driftskost. f. avskr. / Op. ex. before depr EBITDA Avskrivninger / Depreciation Nedskr. og avsetn./ Write downs and provisions EBIT Netto finansposter / Net financial items Resultat før skatt / Profit before taxes Skattekostnad / Taxes Konsernets resultat / Profit after taxes