Dovre Group Plc Half year financial report July 28, 2016 at 8.45 a.m.
DOVRE GROUP HALF YEAR FINANCIAL REPORT JANUARY 1 – JUNE 30, 2016
OPERATING RESULT POSITIVE DESPITE DECLINING SALES
Dovre Group Plc issues today the company’s half year financial report for the six months ended on 30 June 2016. The figures presented in this half year financial report are not audited. Last year’s corresponding period in parentheses. Comparatives for 2015 include Norwegian Petroleum Consulting Group AS (NPC) as part of Dovre Group’s Project Personnel business area as of May 28, 2015.
January – June 2016
- Net sales EUR 47.8 (54.9) million – decline 13%
- Project Personnel: net sales EUR 44.1 (51.0) million – decline 13%
- Consulting: net sales EUR 3.7 (3.9) million – decline 6%
- Operating result EUR 0.1 (-0.5) million. Comparatives for 2015 include EUR 1.1 million costs due to merger with NPC.
- Result for the period EUR -0.8 (-0.7) million, incl. EUR -0.5 (0.1) million finance items and EUR -0.4 (-0.2) million of the result of the Group’s joint venture SaraRasa
- Earnings per share EUR -0.01 (-0.01)
- Net cash flow from operating activities EUR -1.7 (-3.0) million
Guidance for 2016 (unchanged): Net sales are expected to be EUR 80 - 100 million and operating result is expected to be positive.
PATRICK VON ESSEN, CEO:
“The oil & gas market continues to be challenging, and will get worse before it gets better. However, signs of change for the better are on the increase: the price of oil seems to continue its volatile trend upwards; several oil & gas majors have announced ambitious investment plans in renewable energy; and in some markets and with some clients, we are already seeing increased activity. We expect the oil & gas service market to bottom out in 2016 and a gradual increase to begin in 2017. In other industries which we serve, project activity is already high.
We continue to reshape Dovre Group in order to be fit for the market. We have made significant progress in de-risking, diversification and cost saving:
One of the drivers behind the merger with NPC, which took place a year ago, was the de-risking of our client portfolio. Prior to the merger, both Dovre Group and NPC were highly dependent on their respective main clients. Since the merger, and following successful new client acquisition, we now have a balanced and robust client portfolio. Currently, only one client represents more than 10% of our total volume.
In Q1, we launched the target of 25% diversification – i.e. share of sales to non-oil & gas clients - by the end of the year. We have since increased this target to 30% and are well on track to reach that.
In Q1, we also launched a cost adaption program. Our target was more than 0.5 MEUR cost savings per annum, effective as of Q3/2016. So far, we have already implemented cost savings of more than 0.8 MEUR per annum, with full effect latest in Q3/2016. We will continue to streamline and digitalize our work processes and to improve our cost efficiency.
In H1, our Project Personnel business still suffered from declining volumes and prices in the oil & gas market. Net sales declined both year-on-year and quarter-on-quarter. On a more positive note, in H1 our relative gross margin improved and our fixed cost decreased significantly.
In H1 our Consulting operating profit increased significantly compared to previous year. Solid performance from Consulting, again.”
KEY FIGURES
| EUR million | 1-6 2016 | 1-6 2015 | Change % | 1-12 2015 |
| Net sales | 47.8 | 54.9 | -12.9 | 115.9 |
| Operating result | 0.1 | -0.5 | 121.4 | -0.9 |
| % of net sales | 0.2 % | -1.0 % | -0.7 % | |
| Result | -0.8 | -0.7 | -8.7 | -2.0 |
| % of net sales | -1.6 % | -1.3 % | -1.7 % | |
| Net cash flow from operations | -1.7 | -3.0 | 45.8 | 2.0 |
| Net debt | -2.3 | -5.2 | -55.2 | -5.2 |
| Debt-equity ratio (Gearing), % | -8.9 % | -17.3 % | -48.6 | -19.1 % |
| Earnings per share, EUR: | ||||
| Undiluted | -0.01 | -0.01 | -24.4 | -0.02 |
| Diluted | -0.01 | -0.01 | -24.1 | -0.02 |
FUTURE OUTLOOK AND GUIDANCE 2016
The market is still affected by several uncertainties, including general economic trends, oil price, and political instability. Our main markets are, however, in politically and economically stable countries.
We expect Project Personnel demand in the oil and gas industry to further decline in 2016. We expect orders from other segments – i.e. power generation, power transmission and process industry - to increase. However, increased demand in other segments is not yet enough to compensate for the decline in oil and gas industry sales.
In the Consulting business area, market outlook is more positive.
Guidance for 2016 (unchanged): Net sales are expected to be EUR 80 - 100 million and operating result is expected to be positive.
This stock exchange release is a summary of Dovre Group Plc’s half year financial report January 1 – June 30, 2016. The full bulletin is attached to this release and is also available online at www.dovregroup.com -> Investors.
For additional information, please contact:
Dovre Group Plc
Patrick von Essen, CEO ( patrick.essen@dovregroup.com )
Heidi Karlsson, CFO ( heidi.karlsson@dovregroup.com )
tel. +358-20-436 2000
Financial reporting in 2016
As of January 1, 2016, Dovre Group applies the possibility allowed by amendments to the Finnish Securities Markets Act entered into force on November 26, 2015, not to release an interim report for the first three months and the first nine months of the financial year. Instead, the company will release a quarterly trading statement for the each period in question.
Dovre Group releases its remaining financial report in 2016 as follows:
- Q3 trading statement for January 1 – September 30, 2016 on Thursday, October 27, 2016
Distribution
Nasdaq Helsinki Ltd
Major media
