Welltec the Denmark based provider of robotic intervention services and completion solutions to the oil and gas industry, is revisiting its full year revenue guidance to USD 240m-USD 245m (FY14: USD 345m) as the company’s earnings continued to deteriorate in the third quarter. In 9M15 Welltec topline declined 27.1% YoY to USD 194m impacted by volatile crude oil prices, low rig count and reduced capex spend my major customers. Resulting to this EBITDA also declined 38.7% YoY to USD 76m, while margins declining to 39.2% vs 46.7% in 9M14. For FY15, Welltec expects EBITDA-margins at around 39%. At end-3Q15, net leverage had increased further to 2.74x as compared to 1.81x in FY14, due to increase in bank borrowing and lower EBITDA growth.
In 9M14, cash flow from operating activities were down 42.8% YoY to USD 59.2m, leading free cash flow to decline 51.7% YoY to USD 23.3m, which was despite 32.1% YoY decline in CAPEX spending. Welltec’s current liquidity as of 30 September 2015 stood at USD 99m, comprising of USD 59m in cash and securities and the remain under its multi-currency revolving facility. Furthermore, in the absence of any-short-term debt and reducing capex spend, the current liquidity could cushion Welltec’s operations in the short-term. However with LTM c. USD 57.3m in combined capex and net financial expenses, coupled with the deteriorating free cash flow generation could stress the company’s current liquidity position.
As of 30 September 2015, Welltec employed on an average of 832 employees, with operations established in 29 countries.