DGAP-Adhoc: Deutsche Rohstoff AG: Further dividend increase planned

Deutsche Rohstoff AG: Further dividend increase planned
Full year 2018 financials and annual report online/Net profit of EUR 4.1 million in the first quarter of 2019 /Guidance for 2019/2020 published

Mannheim. In fiscal year 2018, Deutsche Rohstoff Group generated sales of EUR 109,1 million (previous year: EUR 53.7 million), EBITDA of EUR 97.9 million (previous year: EUR 36.1 million) and consolidated net income of EUR 17.9 million (previous year: EUR 7.7 million; all figures German Gaap HGB and audited).
The Executive Board and Supervisory Board will propose to the Annual General Meeting to be held in Mannheim on 4 July 2019 that a further increased dividend of EUR 0.70 per share be distributed (previous year: EUR 0.65). Deutsche Rohstoff AG is thus expected to pay a rising dividend for the fifth consecutive year.

Significant aspects of the 2018 financial year and the consolidated financial statements:

• Sales increased by more than 100%. Oil and gas production doubled year-on-year to 3.5 million barrels of oil equivalent ("BOE"), equivalent to production of around 9,600 BOE per day.
• EBITDA (earnings before interest, taxes, depreciation and amortization), on of the company's key performance indicator, increased more than 250% year-on-year. EBIT (Earnings before interest and taxes) increased six-fold to EUR 32.7 million.
• Other operating income of EUR 19.1 million resulted primarily from the sale of the major assets of the subsidiary Salt Creek Oil & Gas in the amount of USD 60 million.
• In the USA, investments of around USD 110 million were made in new wells at Cub Creek and Elster Oil & Gas in late 2017 and early 2018. Operating cash flow (sales after operating costs, local taxes and royalties) of the two companies from all wells amounted to USD 103 million in 2018.
• The equity ratio rose from 26,5% to 32,8%.
• Depletion at the US subsidiaries Cub Creek and Elster was lower than expected during the year due to the reserve estimate as at 31 December 2018. For reasons of prudence, the Management Board nevertheless made an impairment of EUR 13.2 million at Cub Creek Energy.
• The financial result of EUR -13.4 million was significantly influenced by interest expenses of EUR 6.7 million and write-downs on securities in non-current and current assets of EUR 7.2 million. In particular, the devaluation of Northern Oil and Gas's shares to the price as of December 31, 2018 of EUR 2.26 per share had a significant effect with expenses of EUR 5.2 million.
• Cash and cash equivalents (bank balances and securities held as current assets) doubled year-on-year to EUR 60 million.
• In the course of the year, the company was able to place a convertible bond in the amount of EUR 10.7 million. The bond 2013/2018 with an interest rate of 8% was fully redeemed in July 2018.

First quarter 2019

According to preliminary figures (HGB, unaudited), the Group generated sales of EUR 14.7 million, EBITDA of EUR 12.8 million and consolidated net income of EUR 4.1 million in the first quarter of 2019.

• Average production was around 6,300 BOE per day, total production 566,000 BOE . Oil accounted for 253,000 barrel of total BOE.
• The revaluation of Northern Oil & Gas shares to their price on March 31, 2019 had a significant positive effect of EUR 2.4 million.

The complete quarterly figures will be published on 9 May.

Forecast 2019 and 2020:

For fiscal year 2019, the Management Board expects consolidated sales of EUR 40 to 50 million and EBITDA of EUR 25 to 35 million, and sales of EUR 75 to 85 million and EBITDA of EUR 55 to 65 million, respectively, for fiscal year 2020. For both years, the Executive Board anticipates a positive net profit for the group. The forecast is based on the assumption of an average oil price of 58 USD/barrel and an EUR/USD exchange rate of 1.14. For a definition of EBITDA, please refer to the homepage of Deutsche Rohstoff AG at https://rohstoff.de/en/apm/.

The forecast for the year 2019 is based only on sales of the currently already producing wells, for 2020 additionally on the production of 11 more wells from the Olander drilling site. Possible further acquisitions are not included in the planning for either year. Drilling from the Olander drill site will commence in early June 2019 and production is expected to commence in early 2020.

Thomas Gutschlag, CEO of Deutsche Rohstoff, commented: "In 2018 we benefited from the very high investments in new wells at Cub Creek and Elster and from the almost simultaneous start of production of all new wells in the first quarter. Revenues, EBITDA and net profit more than doubled, even more than tenfold compared to 2016. Due to the high returns in 2018, the Group can rely on solid financial resources. We have also significantly reduced balance sheet risks by taking extensive write-downs on Cub Creek and the securities we hold. The start to the new year was positive, which is why we are confident for the year as a whole. Shareholders will again benefit this year from an increased dividend if the Annual General Meeting follows our proposal."

The Annual Report for 2018 of the Deutsche Rohstoff Group can now be downloaded from the company's website at www.rohstoff.de

Mannheim, 6 May 2019

Deutsche Rohstoff identifies, develops and divests attractive resource projects in North America, Australia and Europe. The focus is on the development of oil and gas opportunities within the United States. Metals, such as gold, copper, rare earth elements, tungsten and tin complete our portfolio. For more information please visit www.rohstoff.de.

Contact

Deutsche Rohstoff AG
Dr. Thomas Gutschlag
Tel. +49 621 490817 0
info@rohstoff.de