Integra posts 1H 2011 net income of $12.946 million, flagging SIAM buyout

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Russian oilfield services provider, Integra, has posted an interim 1H 2011, net income of $12.946 million under IFRS, while announcing the purchase of smaller rival SIAM for 2.2 billion roubles.

The net result compares with the 1H 2010 net loss of $30.439 million, with 1H Adjusted EBITDA falling 9.3% year on year to $56.4 million, as 1H sales rose 12.7% year on year to $457.3 million.

Integra noted its 1H 2011 net profit from continuing operations was $17.8 million, compared with a net loss from continuing operations of $20.7 million for 1H 2010.It added that this reflected the divestment of its rig manufacture and cementing and road construction assets in August 2010 and April 2011, while noting that the 1H interim figures were supported by a stronger volume of services across all of its segments, with rising energy fuel and social costs, late contracting and weather related disruptions to its seismic services had crimped Adjusted EBITDA.

Integra added that during 1H 2011 it had won tenders and contracts worth $856.1 million, excluding the order book of divested businesses, with CEO Antonio Campo pointing to a positive outlook for the rest of 2011.

“Revenue for the first half of 2011 continues to grow compared to 2010, driven by stronger activity across our business segments. Service pricing has been slower to advance and together with cost increases, particularly related to fuel, transport, and statutory social taxes impacted EBITDA. An unusually early spring interrupted seismic surveying and the preparation for the summer projects also contributed to lower margins in this Division. Results from our Drilling, Workover and IPM business continue to benefit from internal optimization, and Technology Services delivered steady activity with strong margins.

The outlook for the rest of 2011 is positive. This view is based on stronger levels of activity that we already see in the third quarter. We currently are bringing more drilling rigs on line, our pilot summer seismic projects are progressing well, our contracted seismic volumes for the next winter season are the highest in the last three years and we have just further enhanced our high margin technology services offering with the acquisition of SIAM."

Campo added that acquisition of Tomsk based oil services company SIAM for 2.2 billion roubles, announced on Thursday, would add to underlying profitability.

"The acquisition of SIAM gives Integra new options for future expansion of the production line in technological services is in accordance with our development strategy for providing highly profitable services."