28.10.2009

Integra Group Reports Interim 1H 2009 Financial Results

MOSCOW, August 28, 2009 – Integra Group (LSE: INTE), a leading oilfield service provider and manufacturer of oilfield services equipment, released today its IFRS Unaudited Interim Condensed Consolidated Financial Statement for the six month period ended June 30, 2009. Although CIS oilfield services (“OFS”) demand stabilized in 1H 2009, in absolute terms it remains below the levels of 1H 2008. This market contraction continues to define our operating conditions.

Lower demand for exploration activities, which affected both the scale of our operations and our pricing, was a key factor affecting our revenues in 1H 2009. However, profitability in three out of four
segments continued to recover from the lows of Q4 2008 and was better in 2Q 2009 than in 1Q 2009.
The cost-cutting measures which we continue to undertake allowed us to sustain our Adjusted EBITDA margins close to the levels of 1H 2008. 1H 2009 free cash flow generation was positive.

1H 2009 Financial Highlights

• Sales decreased by 48.5% to US$ 404.7 million (vs. US$ 785.5 million in 1H 2008)
• Adjusted EBITDA1 declined by 57.2% to US$ 55.1 million (vs. US$ 128.8 million in 1H 2008).
• Adjusted EBITDA margin was 13.6% (vs. 16.4% in 1H 2008)
• Net loss for the period (before minority interest) amounted to US$ 22.3 million (vs. net loss before minority interest of US$ 4.5 million in 1H 2008)
• Net cash generated from operating activities was US$ 49.8 million (vs. US$ 2.8 million in 1H 2008)
• Free cash flow was US$30.2 million (vs. negative US$111.2 million in 1H 2008)
• Capital expenditures were US$ 19.6 million (vs. US $114.0 million in 1H 2008)
• Net debt as of August 27, 2009 was approximately US$ 290 million (vs. US $ 335.2 million as of December 31, 2008) 1H 2009 Operating Highlights2
• 88,619 meters drilled (vs. 202,846 meters during 1H 2008)
• 1,776 workover operations conducted (vs. 1,420 workover operations during 1H 2008)
• 430,770 seismic shot points made (vs. 603,477 seismic shot points during 1H 2008)
• 217 downhole motors and 24 turbines produced (vs. 489 downhole motors and 28 turbines produced in 1H 2008)
• 9 heavy drilling rigs and 10 heavy drilling rig assembly units in production at the end of 1H 2009 (vs. 17 heavy drilling rigs and 6 heavy drilling rig assembly units in production at the end of 1H 2008)

• 4 new heavy drilling rigs and 4 heavy drilling rig assembly units commissioned (vs. 2 and 4 in 1H 2008)

Felix Lubashevsky, Integra Group’s President, commented, “In the second quarter we enjoyed a seasonal increase in operating activity across all of our business segments as well as continued to expand our order book as demand from our key customers stabilized. Our cost cutting measures allowed us to mitigate the sharp year-on-year contraction in OFS revenues and maintain margins at an acceptable level. We are particularly pleased that our Technology Services division managed to expand its profitability in this difficult environment as investment in new equipment and product diversification continued to pay off. We see some areas of growth as well as early indicators of a broader increase in customer demand in most of our product areas.”

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1 Adjusted EBITDA represents profit (loss) before interest income (expense), foreign exchange translation differences, income taxes, depreciation and amortization, goodwill impairment, share-based compensation, share of results in associates and minority interest.
2 Operating results of acquired companies are reflected from the time of acquisition.

Please find full text at: http://www.integra.ru/eng/press_center/press_releases/?ID=3023

Source: Integra Group