Headline revenue increased by 18.5% to $1.2bn (2012: $1.01bn)
Headline EBITDA* up 44.7% to $290.8m (2012: $201.0m)
Operating free cash flow of $123.2m (2012: outflow of $44.0m)
Sale of non-core Connectors and Measurements (C&M) business generated net proceeds after transaction costs of $591.5m
Net proceeds of C&M used to repay senior debt of $408.5m, with the balance earmarked for investment in the business
Restructuring of $4.1bn of shareholder loans eliminating reserves deficit
Pro forma leverage fell from 7.9x to 6.2x in the year
Liquidity improved from $173.4m to $201.0m
Photo: Connecting lubricator valve to BOP (blow out preventer)
Operating and financial review
International oilfield services company, Expro, has announced strong annual results for the year ending March 2013, which highlights an increase in revenue of 18.5% to $1.2bn on the previous year, or 20.6% on a constant currency basis.
These results were driven by a growth in activity across the company’s eight business units, combined with a shift in the business mix towards higher value subsea safety systems and production systems. This delivered a higher operating margin of 24.2% and Headline EBITDA growth of 44.7%, to $290.8m.
Strong performance continued in Expro’s largest business unit, Europe CIS, with revenue growing by 13.6% This was driven by increased well testing business in the UK and subsea and drill stem testing activity in Norway.
Sub-Saharan Africa revenue closed 15.4% higher than the previous year, which was bolstered by enhanced subsea activity in Angola and well testing demand across the region.
Asia’s increased revenue was driven by the Australian market, as well as subsea activity in China, resulting in a very positive year, ending 29.5% higher than 2012.
Middle East North Africa finished 5.2% higher due to a strong performance in Saudi Arabia, particularly well testing.
In North American Land, revenue declined by 7.2% as a result of lower gas prices and reduced rig activity/numbers in gas basins. However the North America Offshore business exhibited steady growth and finished the year with revenue up 16.7%. This was primarily driven by strong levels of well test, subsea and perforation activity in the Gulf of Mexico.
Latin America had an excellent year, with revenue growth of 52.9% thanks to buoyant wireline activity, combined with increased activity in well testing, fluids and subsea work in Brazil.
Expro PTI, the company’s production solutions business, also demonstrated extremely strong results and high growth, with an increase in revenue of 67.9% in comparison to the previous year.
Finally, Equipment Sales continued to deliver notable growth, improving revenue by 31.8% on the previous year.
Cashflow and balance sheet
The increase in Headline EBITDA, combined with effective management in Expro’s asset utilisation, capital expenditure and a focus on working capital, resulted in increased operating free cashflow of $123.2m (2012: outflow of $44.0m).
The sale of Expro’s non-core C&M business generated net proceeds (after transaction costs) of $591.5m, of which $408.5m was used to repay senior debt, with the remainder earmarked for investment in the business. This de-leveraging resulted in lower cash interest costs of $198.9m from $212.5m, with a further reduction expected on the full year effect in the cost of financing in the year to 31 March 2014.
$4.1bn of shareholder loans were capitalised as equity, reducing the Group’s ongoing non-cash interest costs by $498.7m, resulting in a $482.8m equity position from a $3.24bn cumulative deficit at the end of last year. Net debt improved by $385.8m to close at $1.81bn.
These strong financial results mark Expro’s 40th anniversary in 2013, including the re-launch of the company’s six core areas of capability: exploration and appraisal testing, subsea safety systems, drilling and completion, flowback and clean-up, production and well integrity and intervention. The company has continued to invest in its workforce over the past year, hiring over 1,000 people globally, developing a range of employee development and retention programmes to meet the business’ operational demands.
Commenting on Expro’s overall performance, CEO, Charles Woodburn, said:
“Expro has performed well during the year, delivering excellent growth across the business. We believe that our continued focus on efficient delivery in our core competencies of well testing and well intervention, together with our investment in subsea safety systems and production systems, competitively positions us within the market place. This has enabled us to generate robust financial returns through effective investment of our resources.
“Our strong EBITDA performance, coupled with the bolstering of our balance sheet through the sale of our non-core Connectors and Measurements business, has enhanced Expro’s capital structure and ability to generate cash to reinvest into the core business.
As we look forward to the year ahead, Expro will continue to invest in improving its asset base, while expanding and developing our work force.
With a strong order book and continued commitment to safe and effective service delivery, we feel confident in delivering further growth in 2014.”
All comparative percentages in this section are in constant currency.
For complete details on Expro's financial results for 2013 click here