H1: activity recovers in oil & gas
H1: activity recovers in oil & gasEARNINGS/SALES RELEASES
The net loss came in below expectations, most likely due to temporary unemployment measures phasing out but the outlook is positive, supported by the activity picking up in oil & gas. The latter is visible when comparing the revenue for H1 21 vs H2 20 (+100%), Q3 21 vs Q2 21 (+43% qoq), and in the number of calls for tenders received in the audit & inspection division (+30% in H1 21 vs H2 20).
FACT
H1 results
Revenue: €2m (+33% yoy)
EBITDA: €-0.7m (+36% yoy)
Net income: €-0.7m (+46% yoy)
Net cash: €0.1m (vs €0.7m in FY20)
ANALYSIS
The net loss came in worse than expected, after the aggressive cost cuttings seen in H2 20, and most likely due to the ending of temporary unemployment measures. The positive is on the activity picking up after the poor 2020. It is indeed noteworthy to mention that revenue doubled in H1 21 vs H2 20 and that Q2 is up by 43% qoq.
The technical assistance division (H1 revenue of €0.75m, +36% yoy) benefited from the restart of some contracts that were suspended last year, and the recovery seen in Q2 is confirmed during Q3.
The audit & inspection division (H1 revenue of €0.89m) has seen its commercial activity focused on the Middle East, with contracts awarded from new customers (e.g. UAE, Iraq, Oman) and it has been approved as a supplier by Saudi Aramco. All in all, this confirms the rather resilient drilling activities in the Middle East, where capex cuts were less pronounced than in the rest of the world (notably US shale). The press release also mentions, deep offshore inspection services in Brazil, where deepwater remains competitive (e.g. giant Búzios field is expected to break-even at $35/bbl).
Lastly, in renewables, the company has started the 15MW floater project (Trussfloat15), with a tank testing campaign planned for early 2022. Dolfines is also studying a heavy maintenance programme to be performed on the turbines and onsite.
IMPACT
We will adjust our model following this release.
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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