The chief executive of international oilfield service group Expro said yesterday it continued to perform extremely well, despite one of its owners writing down the value of its investment in the company.
Graeme Coutts was speaking after private-equity house Candover Investments said it had reduced the book value of its £69.5million investment in Expro by 50% to £34.7million.
Candover said in its annual results yesterday that Expro’s operations were critical to the development of oil and gas reservoirs and were used by multinational oil majors plus state-owned national oil companies.
It added: “However, the sharp drop in the oil price since July 2008, coupled with a weakening in the medium-term outlook for oil exploration and production, has resulted in a decline in the public market comparables, and we have written our investment down by 50%, despite the increase in profits in 2008.
“Expro is not immune to the factors governing global recession and the management team are focused on preparing the business for the expected tougher trading conditions.”
The £1.81billion sale of Expro to private-equity interests went through last July and led to its London-listed shares being cancelled.
The consortium made up of Candover, Goldman Sachs Capital Partners and AlpInvest Partners was successful in its move for the company, despite interest from US giant Halliburton.
Reading-based Expro employs about 700 in Aberdeen out of a global workforce of more than 4,000.
Aberdonian Mr Coutts told the Press and Journal yesterday that the move by Candover had nothing to do with the performance of Expro.
He said: “It’s all to do with the stock market. When the recession is over, Candover will write up the value of the Expro stake.
“Our current trading is similar to what it was at this time last year. We continue to perform extremely well.
“The effect of the Candover position on Expro is minimal. More than 50% of Expro is owned by Goldman Sachs and it has very deep pockets. We continue to invest in the business. We haven’t been cutting staff.
“We will protect our people as much as we can by transferring them to big growth areas such as west Africa, but if we have to trim the ship we will.”
Candover said yesterday that its net asset value per share had fallen 50% to £10.26 at the end of 2008, compared with £20.65 at the end of 2007. It said the decline was driven principally by significant falls in comparable public company earnings multiples, which were used to value investments.