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April 21, 2011

Integra comes out of the crisis

RBC Daily
Petr Geltischev

Business restructuring did a power of good to Integra. Owing to growth of the amount of service and production, the company managed to decrease the amount of the loss by 2.6 times, to 35.9 mln. dollars. And the stock of orders for the services that has replenished since the beginning of the year can indicate continuing the positive trend.  At the same time, as our analysts consider, the success of the group in many respects was conditioned by the low base effect. The further growth of the financial results will depend on the type of investments which the biggest Vertically Integrated Oil Companies will venture in the nearest time.

The expectations of new team of managers that came to Integra in 2009 led by Antonio Kampo and which counted on selling the non-core machine-building assets and on strategic alliance with one of the majors Shlumberger in the field of exploration seismology were answered. “We have brought in the essential amendments to the key systems and processes, which led to considerable increase of profitability of company activity” – the general Chief Executive of the group, Antonio Campo commented on the success of company during the previous year.

In cash equivalent that was expressed by the increase of income by 13.5% till 793.7 mln. dollars., growth of EBITDA by 41.1% till 131.9 mln. dollars and reduction of the net debt by 32.3% till 111.7 mln. dollars. As it is commented in the company, it was possible to reach such results by means of bigger amount of orders. Thus only the total meterage of the drilled wells was increased by 63% till 287.9 thousand metres.

The fact that from the beginning of 2011 the stock of orders for the services has increased by 15.7% comparing to the amount of the previous year makes it even more optimistic. For April 18 there were made contracts for 635 mln. dollars. Inclusive of tenders won during this period the total amount is 792 mln. dollars. "The group has exceeded expectations due to the segment of drilling and integrated project control, but the increase of the order amount allowed winning back the losses of Kazakh contracts" – explained the analyst of Gazprombank, Alexandr Nazarov. He also added that growth of the cost for drilling services will favour further improvement of financial indicators of the company.

However, his colleague from URALSIB Financial Corporation, Alexey Kokin considers present success of Integra to be simply the restoration of its positions after the crisis. According to analyst at least 5 % out of 13.5% of the income growth, demonstrated by the company during the previous year, come from change in exchange rates. “In the situation of uncertainty with the taxation of the branch I doubt whether it is worth counting on the serious growth of capital costs of the oil companies. That’s why at least in the nearest two years the marginal growth of the basic indications of Integra will not exceed 10% annually”, considers Alexey Kokin.