OREANDA-NEWS. June 03, 2010. Integra released 1Q10 operating results and the set of IFRS financials. Drilling volumes fell 7% YoY to 33,000 meters, while the number of drilling rigs dropped from 11 in 1Q09 to only 1. The number of workover operations fell 19% YoY to 632, reported the press-centre of OTKRITIE Financial Corporation.    

The company’s seismic segment was more successful, showing 27% YoY growth in seismic shot points. Relatively robust results were also achieved in cementing operations (+29% YoY). Due to the development of the new business segments, the company’s revenue rose 9.7% YoY to USD 210m. EBITDA for 1Q10 showed a 19% YoY rise (to USD23m), with the EBITDA margin increasing from 10% (1Q09) to 11%.

View: The rise in revenue reflected YoY growth in the company’s formation evaluation (+37%) and technological service (+34%) segments. Although the company guides for increases in EBITDA and EBITDA margin YoY, we see a little progress in its efforts to improve financials. Moreover, the company’s operating results and financials underperformed its competitors, which posted stronger results.

Valuation and Action: We view the news as a short-term negative for Integra, although the stock trades at a 35% discount to other domestic oilfield service companies on consensus 2010E P/E. We do not have a rating or target price for the stock.