Anton Oilfield says staff cut plan on track as it receives more orders
Mainland drilling services provider upbeat on expectation of more orders in second quarter
Anton Oilfield Services has no plans to raise its workforce-reduction target from the present 25 per cent because it expects to receive more new orders in the second quarter of this year than in the same period last year, company chairman Luo Lin says.
The Beijing-based company, one of the mainland's largest non-state-owned drilling services providers, was on track to reach its staff-trimming target as part of efforts to return to the black, he said after its annual shareholders meeting on Tuesday.
"We still have some employee reduction to do, but it will involve a small number of positions, because we have been receiving more orders," he said. "Further reductions will depend on our operating conditions."
Luo said Anton was expected to receive more new orders in the second quarter of this year than in the same period last year, without giving figures, and was aiming to have flat or slightly higher revenues this year compared to last year. New orders fell 60 per cent year on year in the first quarter to 471 million yuan (HK$588.6 million).
He said orders were expected from Iraq and the Americas, and new unconventional oil and gas projects on the mainland.
"The market is still in the doldrums, but the panic period from oil price's sharp fall has passed," he said of the wider industry environment. "It is hard to say whether we will see a marked rebound in technology-based services.
"While the recovering oil price has helped, many of the orders we have been getting are those that we have been chasing in the past half year or longer."
The company said earlier this month it had slashed its headcount by 1,091, or 23.4 per cent, since July last year, reducing it to 3,571. It estimates savings of 186.8 million yuan on labour costs this year as a result.
If it achieves its 25 per cent staff-reduction target for the 12 months to June 30, its headcount will fall by another 74 to 3,497.
Anton posted a net loss of 198.2 million yuan for last year, compared with a net profit of 382.6 million yuan in 2013, as a 50 per cent plunge in oil prices saw its customers slash spending on the drilling of wells and related services.
In a research report earlier this month, Macquarie Securities analysts said Anton's management was expecting revenues in the second quarter of this year to be flat or lower compared with the first quarter. That implied revenues in the first half of the year would be "at best around 20 per cent" of analysts' consensus forecast, they said.
"However, early indications are that Anton could see record new orders in the second quarter driven by international oil companies choosing lower-cost Chinese oilfield service providers in the Middle East," they wrote.
Anton is forecast to post a net loss of 51 million yuan this year and a profit of 63 million yuan next year, according to the average estimate of 21 analysts polled by Thomson Reuters.
