Deutsche Rohstoff AG, Saturn Oil + Gas, Siemens Energy - Weak demand offers opportunities

Deutsche Rohstoff AG - Achieves record results

The recent oil price correction has also impacted fundamentally promising companies like Deutsche Rohstoff AG. Since the peak in May, this has meant a fall in the share price of around 15% to EUR 37.90. However, the recently published half-year results show that this level could offer an attractive long-term entry opportunity, especially if oil prices rise again.

The core business of the Deutsche Rohstoff Group is the production of crude oil and natural gas in the US. The Mannheim-based company also has holdings in strategic and battery metals such as rare earths and tungsten. For the first half of the year, the Company reported record revenue of EUR 112.20 million and EBITDA of EUR 83.80 million, compared to EUR 56.00 million in the same period of the previous year. The operating cash flow from oil production in the US and income from the investment portfolio amounted to EUR 84.9 million, compared to EUR 71.10 million in the previous year.

With the positive performance in the first six months, the forecast for the full year 2024 has been confirmed. The Company's management anticipates revenue in a range between EUR 210 million and EUR 230 million and EBITDA between EUR 160 million and EUR 180 million based on a WTI oil price of USD 75, a gas price of USD 2/mcf and a EUR/USD exchange rate of 1.12.

The analysts at mwb research gave the Company a "Buy" rating with a target price of EUR 55.70 in their latest study on the occasion of the second quarter figures.

Saturn Oil & Gas - Elevated to a new level

The Canadian oil and gas producer Saturn Oil & Gas also set new standards with its second-quarter figures. The team led by CEO John Jeffrey reported a record average production of 30,128 barrels of oil equivalent per day (boe/d), compared to 25,988 boe/d in the second quarter of 2023. As a result, revenues grew to CAD 208.9 million, up from CAD 176.0 million in the same period of 2023, while adjusted EBITDA of CAD 106.0 million also set a new record compared to CAD 92.9 million in the second quarter of 2023.

The recent takeover highlights that this is not the end of the story in terms of the production rate. The Calgary-based company secured additional properties located at the existing drilling fields in southern Saskatchewan, Canada, with a daily production of around 13,000 barrels of oil equivalent per year. Additionally, the Company made a significant move by securing financing that includes CAD 100 million from an equity raise and CAD 885 million from a bond issued at 9.625% per annum for the next five years. With this financing mix, the Company freed itself from the previous 17% interest-bearing loan, thereby reducing its debt costs by 40%.

The improved debt conditions and the increase in free cash flow also impressed the analysts at Ventum Capital Markets in their latest report. The experts see a potential multiplication opportunity for the up-and-coming energy company and gave it a "Buy" rating with a target price of CAD 7.50. The share is currently trading at CAD 2.62.

Siemens Energy - Analysts divided

According to the latest figures for the third quarter, the Munich-based company reported a significant improvement in earnings compared to the same period of the previous year. However, earnings per share remained negative at minus EUR 0.16. A year earlier, Siemens Energy posted a loss of minus EUR 3.42 per share. Analysts had previously forecast that Siemens Energy would report earnings of EUR 0.471 per share in the 2024 balance sheet. Revenue also improved by 17.20% from EUR 7.51 billion to EUR 8.80 billion.

The somewhat mixed figures subsequently divided the analyst community. The experts at HSBC, for example, see a robust order intake, improved cash flow and lower losses at Gamesa as a signal for a potential revaluation of the share, raising their price target from EUR 30 to the current EUR 33 and issuing a "Buy" rating.

JPMorgan takes a more negative view of the situation at the energy technology giant. Analyst Akesh Gupta left the share at "Sell" with a price target of EUR 13 in an analysis on Monday. This would mean more than a halving from the current level.

As a result of the correction in the oil markets, promising oil producers like Saturn Oil & Gas and Deutsche Rohstoff AG have also retraced and, according to analysts, offer attractive entry opportunities due to their fundamental valuations. Siemens Energy reported a significant improvement in its quarterly figures, but financial experts were divided in their assessment of the Munich-based company's future prospects.