A rare oil/gas stock still increasing profits
​KBC is a leading independent provider of simulation software (70% of FY14 profits) and consultancy (30%) to the oil/gas sector. Its sophisticated technology enables customers to optimise their capital and operational spend. Over the past year the crude price has collapsed leading to a blood-bath across the entire sector. However what's particularly interesting here, is that despite the very challenging backdrop, KBC is still on track to increase its 2015 PBTA by 10% to £10.5m. A message repeated once again today after signing another multi $m contract - this time an 18 month deal with a major Russia energy group in the Former Soviet Union (FSU) to optimise the maintenance procedures and operational reliability at several of its refineries. This represents the largest engagement KBC has ever won in the FSU. This agreement comes hot on the heels of Friday's $8.5m consultancy win (plus $2.4m option) in the Middle East, which together underscore the resilience of KBC's business model and the attraction of its proprietary technology. Results are due next Tuesday, 22nd September. We make no change to our forecasts, but note that the stock at 111p trades at wide discount to both our 162p/share price target and the broader oilfield services sector.
KBC Group is a bank-insurance group engaged in providing products and services mainly to retail, private banking, SME and mid-cap clients. Co. focuses on its primary markets of Belgium, the Czech Republic, Slovakia, Hungary and Bulgaria. Co. is also present in Ireland and, to a limited extent, in several other countries to support corporate clients from its primary markets. Co.'s main brands are KBC and CBC in Belgium, CSOB in Czech Republic and Slovakia, K&H in Hungary, CIBANK and DZI Insurance in Bulgaria, and KBC Bank Ireland in Ireland. As of Dec 31 2014, Co. had 1,601 bank branches. In addition, Co. had total assets of Euro245.17 billion.
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