Increase in EBITDA guidance in 2023 by around EUR 5 million/EUR 1.30 dividend/Revenue in 2024 up to EUR 190 million
Mannheim. Deutsche Rohstoff AG today published the final consolidated figures for 2022. The preliminary figures were fully confirmed. In this context, the company raises the guidance for the financial year 2023 as follows:
Base scenario 2023:
Group revenue: EUR 150 to 170 million (previously EUR 140 to 160 million)
EBITDA: EUR 115 to 130 million (previously EUR 110 to 125 million)
This base scenario is based on an oil price of USD 75/barrel, a reduced gas price of USD 3/MMbtu (previously USD 4) and a EUR/USD exchange rate of 1.12 for the remainder of 2023.
For fiscal year 2024, the Executive Board expects the following figures for revenue and earnings in the base scenario (oil price USD 75/barrel, gas price USD 3/MMbtu (previously USD 4); EUR/USD 1.12):
2024 base scenario:
Group revenue: EUR 170 to 190 million
EBITDA: EUR 130 to 145 million
The company’s management report published today also includes a scenario with an oil price of USD 85/barrel for the remainder of 2023 and for 2024.
Increased price scenario 2023:
Group revenue: EUR 165 to 185 million
EBITDA: EUR 125 to 140 million
Increased price scenario 2024:
Group revenue: EUR 190 to 210 million
EBITDA: EUR 155 to 170 million
The Executive Board expects to be able to achieve a clearly positive net income in both years. Record production of 11,000 to 12,000 BOEPD is expected in 2023. In 2024, production should increase by a further 10 to 15% based on the adopted drilling plans.
The basis for production growth is the capital expenditures in 2023 and 2024 of around EUR 200 million, of which EUR 40 million have already been invested at the end of April 2023.
The Executive Board and Supervisory Board will also propose to the Annual General Meeting, which will be held in Mannheim on 29 June, that a dividend totaling EUR 1.30 per share (previous year EUR 0.60) be distributed for the 2022 financial year.
For a definition of the term EBITDA, please refer to the Deutsche Rohstoff AG website at https://rohstoff.de/en/apm/.
In the fiscal year 2022, Deutsche Rohstoff Group generated revenue of EUR 165.4 million (previous year: EUR 73.3 million), EBITDA of EUR 139.1 million (previous year: EUR 66.1 million) and consolidated net income of EUR 66.2 million (previous year: EUR 26.4 million; all figures according to HGB and audited), which corresponds to earnings per share of EUR 12.15, taking into account minority interests.
A comparative statement prepared for the first time in accordance with International Financial Reporting Standards (IFRS) shows IFRS revenue of EUR 217.8 million (+32% compared to HGB, German Commercial Code), IFRS EBITDA of EUR 150.2 million (+8% compared to HGB) and IFRS consolidated net income of EUR 78.7 million (+19% compared to HGB) for the financial year. A detailed presentation of the effects that led to these results can be found in the Group Management Report for 2022.
The Group’s equity rose to EUR 132.4 million (previous year: EUR 80.1 million) and the equity ratio to 37.8% (previous year: 30.2%), as a result of the high positive consolidated net income. The liquidity situation also developed significantly positive. Cash and cash equivalents (cash and marketable securities) grew to EUR 54.2 million (previous year: EUR 23.5 million), operating cash flow to EUR 142.7 million (previous year: EUR 51.8 million) and free cash flow to EUR 70.6 million (previous year: EUR 22.5 million).
Total assets increased to EUR 350.3 million (previous year: EUR 265.0 million), due in particular to investments in oil and gas activities in the USA. The investing cash flow rose to EUR 72.2 million.
The annual report for the fiscal year 2022 of the Deutsche Rohstoff Group is available on the company’s website.
The start into the fiscal year 2023 was very positive. The increased 2023 guidance, which assumes a lower gas price, underlines the good operational development of all drilling projects and the optimal development perspective of the Company. The quarterly report for the first quarter of 2023 will be published in the second week of May (week 19).
Daily production is expected to be around 11,000 to 12,000 BOE in 2023. While just over half of the volumes represent oil, at a price of USD 75, about 80% of the revenue is generated from oil revenue. Another 10% comes from gas revenue and 10% from Natural Gas Liquids, which are priced at around 35% to 40% of the price of oil per BOE.
2023 will again be a year of high investments. Due to the investments of the past years, revenue will increase from EUR 73.4 million in 2021 to up to EUR 175 million in 2023. At the same time, net debt (bond and bank liabilities less cash and cash equivalents) in the Group could be halved. At the end of 2021, it still stood at EUR 93.9 million, while by the end of 2022 it had fallen to EUR 55.6 million. The ratio of net debt to EBITDA thus fell to 0.4 at the end of 2022.
The investment budget for the planned wells in Wyoming and Utah, on which the guidance is based, amounts to probably around EUR 200 million. Around EUR 110 to 120 million will be spent in 2023; EUR 40 million had already been invested by mid April. Around EUR 100 million will be invested in the joint venture with Occidental Petroleum in 2023 and 2024, and another approximately EUR 90 million for drilling in at Cub Creek Energy and EUR 10 million in Utah. For Cub Creek Energy, in addition to the 3 well program already underway from the Lost Springs Pad, management now expects to drill an additional 8 gross wells (7 net wells) in the second half of 2023 and the first half of 2024. Depending on the development of oil prices, investments can be significantly scaled back at any time.
The financing of capital expenditures in 2023 and 2024 amounting to EUR 200 million is spread over the individual quarters and will mainly be made from current cash flow and existing cash and cash equivalents of EUR 54.2 million. With EBITDA guidance to be around EUR 260 million in 2023 and 2024, operating cash flow is significantly higher than capital expenditure. In addition, the largely unused credit lines with a volume of USD 80 million in the US subsidiaries can be used to finance investment peaks as part of the completion of larger drilling sites.
The Management Board of Deutsche Rohstoff AG will hold a web call on the results of the fiscal year 2022 on Thursday, 27 April 2023 at 3:00 pm. Interested investors can register for the call here or on the company’s website at www.rohstoff.de (please note, that the web call will only be held in German).
Mannheim, 26 April 2023