VIENNA (Reuters) - Oilfield equipment producer Schoeller-Bleckmann said it expected to stay profitable in 2019, banking on stable demand for its drilling motors and circulation tools in North America and high backlog demand in Russia and other regions.
The Austrian company reported its first net profit in four years and proposed to double dividend payments to 1 euro per share on Tuesday, lifting its stock 7 percent to its highest this year.
Schoeller-Bleckmann Oilfield Equipment (SBO) has emerged from a rough patch, triggered by plunging oil prices more than three years ago. Prices have been recovering since then, prompting producers to invest in new projects.
SBO gets its orders for highly specialised oilfield exploration equipment, such as odd-angle drilling and fracking gear, from a range of energy companies. Rising exploration activity in the United States and Canada helped it last year.
To save money and make more efficient use of machinery, SBO was closing two sites in Britain and Mexico and relocated much of that capacity to Vietnam, and some to sites in Austria and the United States, the group said.
The plant closure in Britain was due to an efficiency drive and not related to Britain’s departure from the European Union, Chief Executive Gerald Grohmann told a news conference in Vienna.
He said SBO had invested in Chesterfield in England and Monterrey in Mexico in recent years but demand at other locations, particularly Vietnam, was much stronger, he said.
SBO’s order backlog stood at 97.7 million euros (£83.55 million) by end of December compared to 37.6 million euros the previous year.
Net profit for 2018 came in at 41.4 million euros after a loss of 54.4 million in 2017. The group expects to stay profitable in 2019, a spokesman said without elaborating.
“While the North American business should at least show stability based on the activity figures at the beginning of the year, international business is expected to continue its growth trend,” SBO said in its annual report.
($1 = 0.8807 euros)
Reporting by Kirsti Knolle; Additional reporting by Alexandra Schwarz-Goerlich; Editing by Riham Alkousaa and Edmund Blair