Enteq Upstream: on track, looking to the future
Enteq Upstream PLC (LON:NTQ) recently released its annual general meeting (AGM) statement, with an update on current trading. The company confirms that revenue and underlying earnings (EBITDA) for the six months (H1) ending September 30 will be in line with previous management expectations. The company ended the period with a positive net cash balance of US$8.8mln, which we regard as sufficient to trade through the current oil & gas industry slowdown and to continue financing new product developments.
Geographically as expected the company reports a decline in North American revenues, which now represent 25% of group total versus 64% a year earlier. North American rig count is a key demand indicator, and this remains very subdued. There is an ongoing revenue headwind from equipment rental contracts rolling off.
Encouragingly, the uplift in overseas revenues (i.e. revenues outside North America) has continued to provide support. In particular, the company highlights an order worth US$1.0mln in China that was announced in May, and an order worth US$0.9mln in Saudi Arabia that was announced in August. Both of these could potentially lead to further orders in those regions, in our view.
Quick facts: Enteq Upstream PLC
Price: 16.4999 GBX
Market Cap: £11.13 m
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