Integra Group (LSE: INTE), a leading independent provider of diversified oilfield services, released today its unaudited Interim Condensed Consolidated Financial Statements, prepared in accordance with IFRS, for the six months ended June 30, 2011.
Stronger volume of services across all of our segments was the primary revenue growth factor in the first half of 2011. Increased energy, fuel and social costs, late contracting and weather related disruptions of seismic services and increased outflow to working capital have led to a reduction in Adjusted EBITDA and operating cash flow. Due to a significant deferred tax gain and positive net earnings in the second quarter, Integra Group recognized a net profit from continuing operations.
Following the divestments of rig manufacturing assets in August 2010 and cementing and road construction equipment manufacturing business in April 2011, the financial results of the divested businesses were excluded from the following financial highlights and a corresponding restatement of historical results was made for comparison purposes.
1H 2011 Financial Highlights
• Sales increased by 12.7% to US$ 457.3 million (vs. US$ 405.8 million in 1H 2010)
• Adjusted EBITDA decreased by 9.3% to US$ 56.4 million (vs. US$ 62.2 million in 1H 2010)
Adjusted EBITDA margin was 12.3% (vs. 15.3% in 1H 2010)
• Net profit for the period from continuing operations amounted to US$ 17.8 million (vs. net loss of US$ 20.7 million in 1H 2010)
• Net cash flow provided by operating activities was US$ 7.4 million (vs. US$ 34.9 million in 1H 2010)
• Capital expenditures were US$ 42.6 million (vs. US$ 27.1 million in 1H 2010)
• Net Debt as of June 30, 2011 amounted to US$ 148.1 million (vs. US$ 111.7 million as of December 31, 2010)
1H 2011 Operating Highlights
• 125,978 meters drilled (vs. 117,028 meters during 1H 2010)
• 1,739 workover operations conducted (vs. 1,585 workover operations during 1H 2010)
• 147 coil tubing operations (vs. 94 operations during 1H 2010)
• 502 cementing operations (vs. 495 operations during 1H 2010)
• 205 downhole motors and 42 turbodrills produced (vs. 164 downhole motors and 28 turbodrills produced in 1H 2010)
• 577,473 seismic shot points made (vs. 532,505 seismic shot points during 1H 2010)
2011 Order Book Update
• US$ 856.1 million (RR 25.7 billion) in tenders won and contracts signed for execution in 2011, excluding order book of divested businesses,
• of which US$ 796.8 million (RR 23.9 billion) is in signed contracts, calculated as of August 22, 2011;
• 2011 total order book (contracts signed and tenders won) is 14% higher in Ruble terms compared to 2010 order book calculated on August 23, 2010 (adjusted for historic order book of divested businesses) and already exceeds 2010 full year revenue by 8%.
Antonio Campo, Integra Group’s Chief Executive Officer, commented,
“Revenue for the first half of 2011 continues to grow compared to 2010, driven by stronger activity across our business segments. Service pricing has been slower to advance and together with cost increases, particularly related to fuel, transport, and statutory social taxes impacted EBITDA. An unusually early spring interrupted seismic surveying and the preparation for the summer projects also contributed to lower margins in this Division. Results from our Drilling, Workover and IPM business continue to benefit from internal optimization, and Technology Services delivered steady activity with strong margins.
The outlook for the rest of 2011 is positive. This view is based on stronger levels of activity that we already see in the third quarter. We currently are bringing more drilling rigs on line, our pilot summer seismic projects are progressing well, our contracted seismic volumes for the next winter season are the highest in the last three years and we have just further enhanced our high margin technology services offering with the acquisition of SIAM.
In the first half of 2011 our company reached an encouraging milestone by becoming a profitable business. Net income was boosted by a significant deferred tax gain, but without this we generated net income from ongoing operations in the second quarter for the first time in Integra’s history. Improved financing, rigorous cost control and ongoing optimization of our asset portfolio each contributed to these results.”
The unaudited Interim Condensed Consolidated Financial Statements, prepared in accordance with IFRS, for the six months ended June 30, 2011 can be found under the following link:
For additional discussion and analysis of our financial results for the six months ended June 30, 2011, please see our Management’s Discussion and Analysis of Financial Conditions and Results of Operations, which can be found under the following link: