25% chance EMEA oil and gas sector revenue could fall in 2014 – Fitch
There was a 25% chance that revenues in the European, Middle Eastern and African oil and gas sector could fall in 2014, based on the assumption of a normal distribution, Fitch Ratings warned on Thursday.
The ratings agency added that, should there be revenue growth in the oil and gas sector in this region, it would likely remain in the single digits for the next couple of years.
“Our analysis of the potential impact of different oil prices and economic growth rates shows that a Brent crude price of $100/bl is necessary for the industry as a whole to maintain positive revenue growth in 2014 under US gross domestic product (GDP) growth scenarios of 1.8% to 3.4%,” Fitch said.
Therefore, Fitch’s central forecast, based on market consensus expectations for oil prices and US GDP, was for average oil and gas sector revenue growth to be flat in 2013, increasing to 5.5% in 2014 and remaining in single digits in 2015.
Meanwhile the agency said that, earnings before interest, tax, depreciation and amortisation (Ebitda) tended to follow the same trend as revenue growth but with more volatility.
“If revenue remains flat in 2014, Ebitda is likely to fall. The impact on cash flow would be moderate for investment-grade issuers, but could be more severe for companies with very low speculative-grade ratings that are more exposed to earnings volatility.
“Therefore, falling average sector revenue would probably not affect the ratings of investment-grade companies; however, noninvestment-grade companies are more vulnerable, and in some of the weaker cases rating outlooks could be revised to negative if revenues fall steeply,” Fitch said.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
The Beneficiation Academy is a certified training institution that follows all compliance legislation and is accredited with various Sector...
VISIT SHOWROOM
Sulzer South Africa, established in 1922, partners with critical industries like power, oil & gas, water, mining, and chemicals to boost...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
