The pandemic costs the oil field equipment supplier a third of its sales.
The Austrian oil field supplier Schoeller-Bleckmann Oilfield (SBO) is active in one of the industries that are hardest hit by the corona pandemic. “The greatest global economic crisis since the Second World War has an impact on energy consumption, which is largely covered by oil and gas,” says SBO CEO Gerald Grohmann. And this has plummeted in the past few months.
Low oil price
The Lower Austrians feel that too. Sales in the 2020 financial year collapsed by a third to 291 million euros, the result turned from plus 48 million euros to minus 31 million euros. If you factor out the value adjustments and exchange rate losses, however, the bottom line is a black zero, emphasizes Grohmann. A result he is proud of in such a difficult year.
Due to the low oil price, the oil companies are no longer investing in production, which means that the oil field equipment suppliers lose their orders. Due to the corona pandemic, oil demand fell by nine million barrels per day in 2020. In other crises, such as the financial and economic crisis of 2008 / '09, it was “only” one to two million barrels a day.
The declines had the greatest impact on the SOO location in the USA, says Grohmann. The number of employees there has been reduced by 40 percent. Temporary workers have been cut in Austria and plant closings are not on the agenda. SBO currently has around 1,100 employees, a year ago it was 1,500.
Grohmann expects energy consumption to rise increasingly in 2021. “The fourth quarter of 2020 was already better than the second and third, we are already seeing a slight upward trend.” When industrial production and economic life start up again, demand for oil and gas will rise again. The first half of the year will still be characterized by the pandemic.
For Grohmann, who has headed SBO for 20 years, the volatility in the oil and gas business is nothing new. Only one thing has changed in the past few years: economic upturns and downturns now alternate faster than before. With a liquidity cushion of EUR 300 million, however, he sees SBO as well positioned.