KCA Deutag results - weaker than expected

Call is at 2pm but first glance at the numbers is slightly worrying. EBITDA improved to $74.4m in Q2 2019, compared to our $70m projection and Q2 2018 level of $50.3m. But the gain is mainly down to Bentec, their engineering business for onshore drilling, making $12m in EBITDA from the delivery of 3 rigs to their Ukrainian client. Problem is this segment, Bentec, has very little visibility and has been unable to replenish the order book.

On the other segments. EBITDA from offshore has remained relatively stable at $19m, slightly down on our $20m projections. However, onshore or Land Drilling has further declined - adjusting for the acquisition of Dalma, Q2 2019 was $46m versus our expected $49m and previous quarter of $49m, and 2Q 2018 of $56m. Land drilling is the biggest segment and seeing this segment underperforming is worrying. Limited guidance given on future utilisation.

Net Debt figures improve, but still leaves it 6.3x leveraged before synergies and c. 5.9x after synergies

Call at 2pm