EPS cut (2019: from € -0.12 to -0.15, 2020: from € -0.07 to -0.32) (Dietswell)
EPS CHANGECHANGE IN EPS2019 : € -0.15 vs -0.12 ns
2020 : € -0.32 vs -0.07 ns
Model update as we revise our estimates on oil & gas activities and integrate the collaboration in renewables.
We lower our estimates on Dolfines/Dietswell as oil & gas companies are trimming their expenditures in light of the $30 oil. We expect oil companies’ intense focus on capital discipline to weigh on oil & gas activities for the next two years, especially on the Factorig division (audit/inspection) and, to a lesser extent, on the Services division (technical assistance).
This crosses paths with the positive update in renewables. We believe the collaboration with CIMC Raffles alleviates R&D spending needs for the group, as this validates Dolfines’ floater.
Lastly, due to the extreme volatility, we keep our modelling of the €3m financing line unchanged for the moment. As a reminder, we assume the conversion of €3m of bonds into 3.53m shares (assuming €0.85 per share), split between 2020 and 2021.
EPSs are down on our lower estimates, now seeing revenues of €3.50m for Factorig and €1.8m for Services in 2020 vs €4.8m for Factorig and €2.7m for Services previously.
Dietswell. Dietswell SA is a France-based company that provides drilling operation management services for the oil industry. The Company specializes in the design, drilling, work-over and completion engineering. It offers well engineering services, such as well engineering, preparation and evaluation of tenders, offset wells reviews; drilling project management, management of the stock of spare parts, supply of communications and logistic support, among others; drilling contracting; rig design and contracting, which designs, constructs and refurbish rigs; rig inspection and audits, which provide customized inspection and audit services; and provision of technical assistance. Dietswell SA principally provides its services to ageing oilfields that need updating, or that need to be decommissioned in an environmentally friendly manner. The Company holds stakes in two companies: Dolfines Logistique and Feumag Holding Company Limited. In October 2013, it announced the creation of Dietswell Brazil.
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