HOUSTON: Oilfield services giant Schlumberger NV issued a bullish forecast for 2021 on Friday as second-quarter profit topped estimates due to surging margins, with a rebound in oil prices boosting demand for its software and equipment.
Energy services firms are benefiting from a resumption of drilling driven by rising crude prices, which are up 18 percent in the latest quarter and 42 percent since the start of 2021.
Still, oilfield activity levels remain far below pre-pandemic levels and oil demand could face a threat as a resurgence of infections from coronavirus variants prompts fresh restrictions in some parts of the world.
Schlumberger officials offered an optimistic outlook for the rest of the year, and said they expect further growth and margin expansion in the company’s North American and international operations.
International revenue could rise at a double-digit percentage rate compared with year-ago levels, officials said.
Double-digit sequential revenue growth was posted in Qatar, UAE, and East Asia from higher reservoir performance and well construction activity, Schlumberger said in a statement.
ADNOC Offshore awarded Schlumberger a large, five-year contract, valued at $381 million, for integrated rigless services for the artificial islands offshore UAE, the first contract awarded by ADNOC to integrate all rigless services, including high-rate stimulation, production logging, surface testing, and coiled tubing.
In Iraq, Schlumberger was awarded a contract, valued at $480 million, to drill 96 wells in southern Iraq for ExxonMobil, which operates the giant West Qurna 1 Field owned by Basra Oil Company.
In the Kingdom of Bahrain, Schlumberger has been awarded a three-year, production enhancement contract-valued at $150 million in the Bahrain Field.
Its North American business, which fell 1 percent versus a year ago, could “surprise to the upside” due to spending by private operators, Chief Executive Olivier Le Peuch said.
“Industry projections of oil demand reflect the anticipation of a wider vaccine-enabled recovery, improving road mobility, and the impact of various economic stimulus programs,” Le Peuch said, cautioning the COVID-19 pandemic continues to threaten the demand recovery.
US oil output may not reach pre-pandemic levels until after 2022, Le Peuch said, adding that international supply and demand conditions would push oil and gas activity beyond 2019 levels in the next two to three years.
Rival Halliburton this week also delivered a bullish outlook for the oil industry recovery, while Baker Hughes missed earnings expectations following a hit from restructuring charges.
Schlumberger reported net income of $431 million, or 30 cents per share, for the three months to June 30, compared with $299 million, or 21 cents per share, in the first quarter. Wall Street analysts had anticipated earnings of 26 cents per share, according to Refinitiv IBES.
Operating margins nearly doubled to 14.3 percent, the highest since 2018, led by big gains in its software and reservoir performance units. Those gains, which marked the fourth consecutive quarter of margin expansion, reflected past cost-cutting and big year-over-year software revenue increases.
Analysts for investment firm Tudor Pickering Holt & Co. said the results were strong, but lamented that Schlumberger’s stock — along with other oilfield companies — had continued to underperform.
Middle East helps Schlumberger to profit beat as margins soar on revenue gains
https://arab.news/gsaar
Middle East helps Schlumberger to profit beat as margins soar on revenue gains
- Schlumberger gives optimistic outlook for the rest of the year
- Double-digit sequential revenue growth was posted in Qatar, UAE, and East Asia
Closing Bell: Saudi main index rises to close at 11,251
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 84.27 points, or 0.75 percent, to close at 11,251.81.
The total trading turnover of the benchmark index was SR5.38 billion ($1.43 billion), as 188 of the stocks advanced and 67 retreated.
Similarly, the Kingdom’s parallel market Nomu gained 157.22 points, or 0.67 percent, to close at 23,643.74. This comes as 44 of the stocks advanced while 32 retreated.
The MSCI Tadawul Index gained 10.88 points, or 0.72 percent, to close at 1,517.43.
The best-performing stock of the day was Saudi Kayan Petrochemical Co., whose share price surged 9.96 percent to SR5.30.
Other top performers included Ataa Educational Co., whose share price rose 9.94 percent to SR57.50, as well as Rabigh Refining and Petrochemical Co., whose share price surged 5.74 percent to SR7.55.
Saudia Dairy and Foodstuff Co. recorded the most significant drop, falling 5.93 percent to SR220.50.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. also saw its stock prices fall 2.77 percent to SR43.56.
Zahrat Al Waha for Trading Co. also saw its stock prices decline 2.30 percent to SR2.55.
On the announcement front, Multi Business Group Co. reported its annual financial results for the year ended Dec. 31. According to a Tadawul statement, the firm recorded a net profit of SR352,172 during the year, down 98 percent from the previous year.
The company attributed the decline primarily to a 2 percent drop in building contracting revenues and a 73 percent decrease in gross profit.
Multi Business Group Co. ended the session at SR9.90, down 1 percent.
Hamad Mohammed Bin Saedan Real Estate Co. announced the signing of a memorandum of understanding with Saudi Awwal Bank to enhance collaboration in financing solutions, advance real estate development projects, and expand access to customer financing programs.
Hamad Mohammed Bin Saedan Real Estate Co. ended the session at SR6.67, up 1.21 percent.
