ANNUAL GENERAL MEETING
VIENNA 27.06.2023
CEO PEWETE AG
DENIS STANKEVICH
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1st HY 2022: challenging environment
In the first half of 2022,
PeWeTe was confronted with a challenging market environment due
to its operating activities in Russia. Nevertheless, the Group was able to report a positive development.
Revenue stands at EUR 152.2 million, up by 44.4% year on year due to the positive operational performance.
Well Services and Stimulation segment
posted a 72.0% increase in revenue to EUR
73.1 million for the first six months of 2022.
The gross profit margin improved to
13.5%, up from
10.3% in the same period of the previous year.
Drilling, Sidetracking, and IPM segment also
delivered +28.6% to revenue at EUR
73.2 million (HY1 2021: EUR 56.9 million).
The strong operational
result led to an
EBIT margin of 4.4% in the reporting period.
Despite sanctions and drastic restriction of Financial transactions, The Group managed to keep traditionally highest level of
liquidity and operational efficiency.
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Geopolitical situation
EU introduced certain stringent sanctions restrictions in respect of operations and transactions directly affecting the Company, its top managers and its Russian subsidiaries and their operations.
Russia introduced certain stringent counter- sanctions restrictions in respect of operations and transactions directly affecting the Company, its top managers, its Russian subsidiaries and their top managers.
70% of Company's services in Russia
constitute contracts with Russian energy companies either
controlled by the Russian Federation
(directly or indirectly) or otherwise included in EU sanctions lists.
40% to 80 %
(depending on the type of services) of
equipment used
for oil services performed by the Company and its subsidiaries in Russia is
imported from EU and the USA. 35 % of spare
parts and consumables are also imported from EU.
In order to manage Russian operations the
Company requires local Russian top managers having
knowledge of the market. Such people are mostly Russian citizens/residents and are subject to Russian legislation.
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EU sanctions
According to Art 5aa General Sanctions Regulation it is
The significant part of clients of the Company's Russian subsidiaries fall under categories prohibited above and thus the Company and its Russian subsidiaries cannot continue rendering services to them.
Legal background - EU sanctions
The relevant EU sanction measures are set out in Council Regulation (EU) No 833/2014 (as amended, "General Sanctions Regulation"), and Council Regulation (EU) No 269/2014 (as amended, the "Personal Sanctions Regulation").
prohibited to directly or indirectly engage in any transaction with:
- legal person, entity or body established in Russia, which is publicly controlled or with over 50% public ownership or in which Russia, its Government or Central Bank has the right to participate in profits or with which Russia, its Government or Central Bank has other substantial economic relationship, as listed in Annex XIX General Sanctions Regulation;
- legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50% by an entity listed in Annex XIX General Sanctions Regulation; or
- legal person, entity or body acting on behalf or at the direction of an entity referred to in point (a) or (b) of this paragraph.
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EU sanctions
Prohibition of investments in the Russian energy sector
Export related sanctions
Asset freeze sanctions on Russian banks
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The Company's investment program in respect of the purchase of new equipment for the operations of its Russian subsidiaries, its technical servicing, etc cannot be performed any longer,
which puts the operations performed by the Russian subsidiaries at risk. Besides, normal operations of the Russian subsidiaries using their existing equipment become virtually impossible in the absence of technical support from the Company or EU contractors
Financing the Russian energy sector is prohibited. The Russian subsidiaries of the Company and
their clients are companies "operating in the energy sector" Thus, the Company cannot grant loans or credits (or other similar financing or investments) to its Russian subsidiaries
Providers of software and
hardware like Microsoft, Siemens, VMWare, Cisco, TeamViewer, Hewlett Packard, Lenovo and others used by the Russian subsidiaries
ceased supporting
their software and refuse to extend licenses in the territory of Russia
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Disclaimer
Petro Welt Technologies AG published this content on 28 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 June 2023 08:26:10 UTC.