Deutsche Rohstoff: Preliminary half-year figures confirm strong growth

Deutsche Rohstoff AG

Deutsche Rohstoff: Preliminary half-year figures confirm strong growth

Deutsche Rohstoff AG

Sales increase to EUR 55.1 million/EBITDA EUR 52.6 million/Forecast raised

Mannheim. According to preliminary, unaudited figures, Deutsche Rohstoff Group generated sales of EUR 55.1 million (previous year: EUR 32.1 million) and earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 52.6 million (previous year: EUR 23.5 million) in the first half of 2018. Consolidated net income for the year amounted to EUR 10.1 million (previous year: EUR 5.0 million). For the year as a whole, the Executive Board now expects revenues between EUR 90 and 100 million and EBITDA of EUR 85 to 90 million (previously: revenues between EUR 75 to 85 million and EBITDA of EUR 65 to 70 million).

As expected, the strong sales growth in the first half of the year resulted from the oil and gas business in the USA. The three US-subsidiaries produced 1.69 million barrels of oil equivalent (BOE) by the end of June (previous year: 1.0 million BOE), of which 0.94 million barrels of oil (BO) (previous year: 0.65 million BO). The average selling price for the oil was 62.41 USD per barrel. The production of Salt Creek Oil & Gas was included in sales until the date of the sale of the main areas (6 June 2018).

The US-subsidiaries generated a pre-tax profit contribution of EUR 22.6 million, to which Salt Creek contributed around EUR 14.5 million and Cub Creek and Elster around EUR 8.1 million. After deduction of deferred taxes in the amount of EUR 4.0 million and of other Group expenses, mainly for interest (EUR 3.3 million), currency losses (EUR 2.5 million) and depreciation of goodwill (EUR 1.4 million) at Salt Creek this results in consolidated net profit of EUR 10.1 million.

Overall, oil and gas production exceeded expectations in the first half of the year. The reason for this is the very strong production of the new wells at Elster Oil & Gas. Due to the limited capacity of marketing facilities, the volumes sold in the second quarter were also lower than the volumes actually produced. Elster’s sales of around USD 9 million will therefore not be realized until the second half of the year.

The main drivers for raising the forecast for sales and EBITDA are the additional sales postponed to the second half of the year and Elster’s continued strong production. The most recent results from some of Cub Creek Energy’s wells had a negative impact on the result, as they were not in line with the expected production trend and therefore led to higher than expected depletion. The aim of the current production optimization is not to have to adjust the current depletion levels any further.

A WTI oil price of USD 65 was still used to prepare the adjusted forecast. The exchange rate forecast has been adjusted from 1.22 EUR/USD to 1.18 EUR/USD.

For the definition of the term EBITDA please refer to DRAG’s homepage at http://rohstoff.de/en/apm/.

Mannheim, 6 August 2018

Deutsche Rohstoff identifies, develops and divests attractive resource projects in North America, Australia and Europe. The focus is on the development of oil and gas opportunities within the United States. Metals, such as gold, copper, rare earth elements, tungsten and tin complete our portfolio. For more information please visit www.rohstoff.de.