Reassuring end of year update
Reassuring end of year updateSIGNIFICANT NEWS
Dietswell released a positive end of year update. While the environment remains positive in offshore wind, the group has also signed several significant contracts in oil & gas. It seems that the wait-and-see attitude impacting the H1 results did not extend into Q4 and the company now expects a significant improvement in its profitability.
FACT
Expects a significant improvement in its profitability
Factorig: contracts awarded in Algeria, Brazil, and the UAE
ANALYSIS
In Renewables, the press release mentions several technical and commercial contracts coming under the company’s expertise. Note that the company already designed three energy harvesting units last year, showing the group’s capabilities in the floating renewables space.
The company now expects a significant improvement in its profitability. This is supported by a reinforcement of the backlog in Oil & Gas. Despite stable oil prices, operators seem to be taking a more dynamic stance at the end of this year. The Factorig division (rig audit & inspection) received several significant contracts in Algeria (onshore) and Brazil (offshore). This follows the last update which mentioned commercial activity in Brazil.
Furthermore, the company has signed a high value added long-term contract in the UAE. Dietswell will perform optimisation work on complex drilling rigs. Being involved throughout the whole lifespan of a rig, Factorig has all the tools to perform such activities. If successful, this would add to Dietswell’s track record and allow the group to prospect further in this area.
The group also sees increased commercial activity for the Services division (technical assistance), with various offers being analysed. Lastly, the group also launched a set of training programmes in the well-rigs sector with QHSE specialist Aegide International.
IMPACT
No change to our recommendation.
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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