Enteq Upstream PLC Trading Statement (1290J)
April 08 2020 - 2:00AM
UK Regulatory
TIDMNTQ
RNS Number : 1290J
Enteq Upstream PLC
08 April 2020
8 April 2020
Enteq Upstream plc
("Enteq" or the "Company")
Year-end Trading and COVID 19 Update
Enteq, the oilfield services technology and equipment supplier,
today announces an update for the financial year ended 31 March
2020.
The combined and inter-related impact of both the COVID-19 virus
spreading and the recent drastic reduction in the oil price has had
a significant impact on Enteq's current and future trading
environment.
The health and safety of staff, their families and the broader
community is our highest priority. Following advisory guidelines,
our facilities in Houston have been re-organized to ensure safe
working practices, together with enabling staff to work from home,
where practical. All UK employees are now operating from their
homes.
Enteq trading results for the year ended 31 March 2020 are
anticipated to remain broadly in-line with the Board's earlier
full-year expectations, with revenues in the region of $11m and
Underlying Adjusted EBITDA* of around $3m. The cash balance as of
31 March 2020 was $10.2m ($11.9m as at 31 March 2019; $10.7m as at
30 September 2019) reflecting planned investments made during the
year in the rental fleet, engineering projects and product
development.
Due to the recent reduction in demand from the North American
drilling market, combined with the future market uncertainties,
Enteq intends to include a significant non-cash write down in the
carrying value of both the intangible assets (capitalised research
and development projects) and inventory holdings in the final
reported accounts for this period. The total balance sheet
(non-cash) reduction in relation to these write downs is expected
to be approximately $6.9m.
Shortly after the dramatic fall in global oil price in mid-March
2020 many operators in the North American shale oil and gas sector
announced measures to significantly reduce both capital expenditure
and operating costs. Enteq responded by rapidly reducing its
overhead cost base. The actions taken to date include:
-- reducing the number of our US workforce by approximately 60%,
with group wide salary reductions implemented from 1 April
2020;
-- releasing all contract staff and curtailing all discretionary spend.
In addition, in order to further conserve cash, all Board
members have agreed to take a significant proportion of their
remuneration in new Enteq shares. Enteq is also in the process of
applying for governmental assistance in the USA, where
appropriate.
Enteq's secure balance sheet, combined with an adjusted cost
base, will allow for continued investment in selected engineering
development projects. Strong technical partnerships will also be
maintained.
In the current circumstances it is not possible to give guidance
as to the expected level of future trading in the medium term.
Enteq's International markets, especially China, Russia and in
Saudi Arabia (where a new partnership agreement has now been
concluded), are expected to be more resilient than North America
and Enteq continues to pursue opportunities in these areas.
The Company currently expects to report its full year results
for the year ended 31 March 2020 on 17 June 2020.
For further information, please contact:
Enteq Upstream plc +44 (0)149 461 8739
Martin Perry, Chief Executive Officer
David Steel, Finance Director
Investec Bank plc (NOMAD and Broker) +44 (0)207 597 5970
Chris Treneman, Patrick Robb, David Anderson
* Underlying EBITDA is defined as operating profit before
depreciation, amortisation, long term incentive charges and
exceptional items.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTDDLFBBZLXBBK
(END) Dow Jones Newswires
April 08, 2020 02:00 ET (06:00 GMT)
Enteq Technologies (AQSE:NTQ.GB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Enteq Technologies (AQSE:NTQ.GB)
Historical Stock Chart
From Jul 2023 to Jul 2024