August 22, 2019 / 7:42 AM / a month ago

Schoeller-Bleckmann reports 4.3% fall in operating profit

VIENNA, Aug 22 (Reuters) - Austrian oilfield equipment producer Schoeller-Bleckmann (SBO) on Thursday reported a 4.3% fall in second-quarter operating profit, reflecting weaker demand from North American exploration and production companies.

Operating profit fell to 17.7 million euros ($19.6 million) in the April-June quarter. Adjusted for restructuring measures the decline was 0.7%.

SBO builds highly specialised oilfield exploration equipment, such as odd-angle drilling and fracking gear, for a range of energy companies.

Rising exploration activity in the United States and Canada helped it recover from a downturn a few years ago, but exploration and production companies are becoming increasingly cautious and are strongly focusing on cost cutting, SBO said.

“The high budget discipline of the exploration and production companies is reflected in the United States ... in particular, where exploration and production spending is expected to drop by around 10%,” SBO said.

It said demand was solid in South America, the Middle East, the North Sea region and East Asia.

“We want to make even better use of this overall situation also for our well completion business and are preparing ourselves for growing internationalisation in this sector,” Chief Executive Gerald Grohmann said.

Schoeller-Bleckmann said it will combine its well completion subsidiaries Downhole Technology and Resource Well Completion Technologies. The two sites in Houston, Texas and Calgary, Alberta, will remain in place.

Group sales grew 8.7% to 115.1 million euros in the second quarter, buoyed by high demand for its repair and housings services for tools and machines. It expects that demand to stay strong, especially outside North America.

$1 = 0.9023 euros Reporting by Kirsti Knolle and Riham Alkousaa Editing by David Holmes

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