EQS-Adhoc: Petro Welt Technologies AG: Group results 2022: Divestment of Russian operating companies, focus on business in Kazakhstan

AD-HOC ANNOUNCEMENT

Petro Welt Technologies AG – Group results 2022: Divestment of Russian operating companies, focus on business in Kazakhstan

• Sale of the Russian business units as of August 28, 2022 and liquidation of the joint Venture in Oman.
• The company's main market is now Kazakhstan.
• Sales decrease in EUR by 0.8%, in RUB by 11.8%.
• Result clearly negative due to losses from the sale of subsidiaries.
• Equity ratio declines to 15.5%.
• The main operating revenue and earnings driver is the Well Services segment, followed by Drilling, Sidetracking and Integrated Project Management (IPM).

Vienna, April 27, 2023

During 2022, the global economy came under unprecedented pressure. In addition to the corona pandemic and the war in Ukraine, high inflation in particular posed a major challenge. Geopolitical conflicts exacerbated the energy crisis and drove inflation expectations even higher.

At the Extraordinary General Meeting on August 16, 2022, the shareholders of Petro Welt Technologies AG approved the sale of the Russian-based business units represented by the subsidiaries OOO KATKoneft, OOO KATOBNEFT, OOO KAToil-Drilling, OOO Wellprop, OOO KAT.oil Leasing, OOO Petro Welt Technologies and OOO Trading House KAToil. The Group completed the transaction at the end of August 2022. The profits and losses generated by these subsidiaries are reported as discontinued operations.

PeWeTe also decided to terminate the operations of the company under the current joint venture in Oman. As a result, the subsidiary PEWETE EVO SERVICES LLC, which had been held by the Group and provided its services under the joint venture in Oman, is currently in the process of liquidation. Therefore, PEWETE EVO SERVICES LLC is also reported as discontinued operation. The majority of the assets in Oman were transferred to PeWeTe's subsidiary in Kazakhstan. This is therefore the only remaining operating business unit of the PeWeTe Group and is presented under continuing operations.

Development at a glance

Against the backdrop of an increase in oil production and the increase in quotas under the OPEC+ agreement, the PeWeTe Group recorded a thoroughly solid operating performance in 2022. Notwithstanding the sale of the Russian business units at the end of August 2022, PeWeTe Group's revenue for the full year shows almost stable thanks to this positive operating performance. The Well Services and Well Stimulation segments, consolidated only for the period January to August 2022, achieved a slight increase in revenue in this period alone compared to the full year 2021. Revenue achieved in the first eight months of 2022 amounted to EUR 115,4 million (+16.4% compared to the full year 2021).

In total, revenue of the PeWeTe Group measured in RUB decreased by 11.8% in 2022 and thus declined noticeably compared to the level in 2021. In EUR, however, revenue decreased by only 0.8% to EUR 235.1 million. Cost of sales decreased by 12.2% in RUB and by 1.2% in EUR to EUR 199.4 million in 2021 (2021: EUR 201.9 million). On balance, gross profit was also slightly higher than in the previous year at EUR 35.7 million (2021: EUR 35.0 million), and the gross profit margin increased accordingly to 15.2% (2021: 14.8%).

EBIT, on the other hand, was massively impacted by the loss from the sale of the business units in Russia – which amounted to EUR 399.4 million – and came to EUR -388.8 million. The EBIT margin was correspondingly negative at -165.4%. In view of this development, EBITDA also fell significantly to EUR -361.5 million (2021: EUR 33.5 million), while the EBITDA margin dropped to -153.8% (2021: 14.1%).

Adjusted EBIT, excluding the result of the Russian subsidiaries sold at the end of August 2022, amounted to EUR 10.6 million with a margin of 4.5%. Adjusted EBITDA amounted to EUR 37.9 million with a margin 16.1%. The financial result also turned negative at EUR -15.8 million, mainly due to substantial foreign currency losses. On the basis of all these developments, the result before income tax amounted to EUR -404.6 million, and the consolidated net result to EUR -411.8 million.

As a consequence of the sale of the Russian business units and the resulting loss, the equity ratio decreased to 15.5% (2021: 51.0%). However, PeWeTe still has a comfortable liquidity position of EUR 58.6 million, measured against the significantly reduced business volume.

Outlook for 2023

Against the background of lower global growth rates, Kazakhstan's economy is characterized by relatively high stability, albeit with high inflation. High commodity prices are also having a positive impact. According to OPEC, global oil demand is expected to increase slightly to 101.8 mb/d in 2023.

Management expects revenue of around KZT 8.8 billion to KZT 9.8 billion in 2023. Converted into the reporting currency of the euro, revenue could be in a range of EUR 17.6 million to EUR 20.6 million at an exchange rate of KZT 475 to KZT 500 per euro. EBITDA is currently forecast to be up to KZT 3.7 billion, which corresponds to an amount of EUR 6.6 million to EUR 7.7 million at an exchange rate per euro in the aforementioned range. This expectation is based on the situation at the time of publication of this report and does not include serious negative effects, in particular a further escalation of the tense geopolitical and economic situation.

The 2022 Annual Report of Petro Welt Technologies AG is available for download on the corporate website www.pewete.com.

About Petro Welt Technologies AG

Petro Welt Technologies AG, domiciled in Vienna, is one of the leading and first established oilfield services companies in the CIS and is specialized in services which increase the productivity of new as well as existing oil and gas formations. Following the sale of the operating subsidiaries in Russia and the withdrawal from the Omani market, the company is currently focusing on Kazakhstan.

Contact
Konstantin Huber (Male Huber Friends)
Investor Relations
T: +43 1 503 2 503-29
huber@mhfriends.at

1619799  27-Apr-2023 CET/CEST