Compagnie Generale de Geophysique: Third Quarter 2005 Results
November 10 2005 - 12:01AM
PR Newswire (US)
Operating Result of EUR13M up 25% PARIS, November 10
/PRNewswire-FirstCall/ -- Compagnie Generale de Geophysique (ISIN:
0000120164 - NYSE: GGY) published today its unaudited consolidated
results for the third quarter of 2005. Pursuant to European
regulation no. 1606 dated July 19, 2002, the consolidated financial
statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and its interpretations
adopted by the International Accounting Standards Board (IASB).
They include comparative information for the period of 2004 using
the same standards. Q3 2005 highlights: - Third quarter 2005 Group
revenues of Euros 216.7 million, up 30% compared to the third
quarter of 2004. - Group operating profit of Euros 13.0 million
compared to Euros 10.4 million in Q3 2004. - Geophysical Services
operating profit of Euros 2.5 million. - Sercel record quarterly
revenues of USD 118 million with operating margin close to 20%. -
Group net income of Euros 5.8 million before specific financial
charge compared to a net profit of Euros 4.2 million in Q3 2004. -
Specific financial charge of Euros 23.3 million related to the IFRS
accounting treatment of the convertible bond, as communicated by
the Group on October 17, 2005, leading to a negative net result of
Euros 17.5 million. - Record Group backlog of USD 756 million as of
November 1st 2005, a 74% year on year increase. Comments and
Perspectives : CGG Chairman & CEO, Robert BRUNCK, commented:
"The Company activity did strengthen during the third quarter with
Sercel's sales at a record high and a sustained market demand in
all the Geophysical Services segments. Our offshore fleet operating
during the summer principally in North Sea had to face
exceptionally bad weather conditions, which had a negative impact
on our operational marine performance. However, the outlook for the
fourth quarter 2005 remains excellent for both Sercel and
Geophysical Services and we are confident that we will reach our
2005 operating profit target. Our backlog is at a record level and
is of excellent quality. During the last industry convention in
Houston, Sercel has launched the 428 XL its new generation of land
acquisition systems and its new marine solid streamer, the
Sentinel, for which several orders have already been received. The
integration process of Exploration Resources is developing in line
with expectations. The CGG Group is thus in a good position to reap
the benefits of the favourable market conditions we see ahead of us
in 2006 and later." IFRS Consolidated Statement of Earnings Million
Euros YTD 2005 YTD 2004 Q3 2005 Q3 2004 Operating revenues 600.4
488.2 216.7 166.8 Gross profit 133.0 96.2 46.0 38.3 Operating
income (loss) 42.5 26.2 13.0 10.4 Equity in income (loss) of
affiliates 9.6 7.7 2.9 2.9 Cost of financial debt (26.7) (16.8)
(7.1) (5.5) Variance on derivative on convertible bonds (38.0)
(23.3) Other financial income 1.3 (1.4) 0.6 2.2 (loss) Income taxes
(18.2) (15.0) (3.6) (5.8) Net income (loss) (29.5) 0.7 (17.5) 4.2
Net income (loss) per (2.51) 0.06 (1.50) 0.36 share / diluted in
Euros Weighted average number of 11.765.118 11.681.218 11.698.623
11.681.718 shares outstanding Revenues: At Euros 217 million, Group
revenues for the third quarter of 2005 were up 30% in Euros and in
USD compared to the third quarter of 2004. Total Group revenues at
the end of September 2005 were Euros 600 million, up 23% in Euros
and up 27% in USD, compared to the same period of last year.
Revenues per segment: Total revenues for Geophysical Services for
the third quarter 2005 were Euros 139 million, up 37% in Euros and
in USD compared to the third quarter of 2004. Exploration Resources
is consolidated, starting September 1st with a revenue contribution
of Euros 9 million. Land revenues were Euros 34 million, up 80% in
Euros and in USD when compared to the third quarter of 2004. During
this quarter, 11 crews were in operation. Offshore revenues of
Euros 76 million for the third quarter of 2005 were up 37% in Euros
and in USD compared to the third quarter of 2004. Multi-client
after sales of Euros 24.1 million were up 55% year on year. At the
end of September, the net book value of the multi-client library
was Euros 101 million. For the third quarter 2005, Processing and
Reservoir revenues were Euros 30 million, up 9 % in Euros and in
USD compared to the third quarter of 2004. Total revenues for
Geophysical Services at the end of September 2005 were Euros 385
million up 41% in Euros and 46% in USD compared to the same period
last year. For the third quarter of 2005, Sercel total sales were
Euros 97 million, up 41% in Euros and in USD, compared to the third
quarter of 2004. External sales for the third quarter of 2005 were
Euros 77 million up 18% in Euros and in USD. Total revenues for
Sercel at the end of September 2005 were Euros 256 million, up 12%
in Euros and up 15% in USD compared to the same period last year.
External sales at the end of September 2005 were Euros 216 million.
Operating Income: The Group Operating Profit for the third quarter
of 2005 was Euros 13.0 million compared to Euros 10.4 million
operating profit for the third quarter of 2004. With Argas
contribution, this profit for the third quarter 2005 is Euros 15.9
million compared to Euros 13.4 million for the same period last
year. The Geophysical Services operating profit for the third
quarter of 2005 was Euros 2.5 million compared to a Euros 1.9
million operating profit for the third quarter of 2004. Including
Argas contribution, this profit for the third quarter 2005 is Euros
5.4 million compared to Euros 4.8 million for the same period last
year. Sercel operating profit for the third quarter of 2005 was
Euros 19.2 million compared to Euros 10.9 million for the third
quarter 2004, corresponding to close to 20% operating margin. The
Group Operating Profit at the end of September 2005 was Euros 42.5
million compared to Euros 26.2 million operating profit at the end
of September 2004. With Argas contribution, this profit at the end
of September 2005 is Euros 52.1 million compared to Euros 34.0
million at the end of September 2004. Segment information Million
Euros IFRS YTD 2005 YTD 2004 Q3 2005 Q3 2004 Operating revenues
Services 385.0 273.1 139.6 101.6 Products 256.0 228.9 97.1 69.1
Elimination (40.6) (13.8) (20.0) (3.9) Total 600.4 488.2 216.7
166.8 Operating income (loss) Services 11.5 (15.5) 2.5 1.9 Products
49.3 46.5 19.2 10.9 Corporate (8.9) (9.2) (2.5) (3.7) Elimination
(9.4) 4.4 (6.2) 1.3 Total 42.5 26.2 13.0 10.4 Net Result : The
Group net result for the third quarter of 2005 was a loss of Euros
17.5 million compared to a net income of Euros 4.2 million for the
third quarter of 2004. Not including the Euros 23.3 million
specific financial charge related to the IFRS accounting treatment
of the convertible bond (variance on derivative of the convertible
bonds), as communicated by the Group on October 17, 2005, the net
result for the third quarter 2005 is a profit Euros 5.8 million.
The Group net result at the end of September 2005 was a loss of
Euros 29.5 million compared to a net income of Euros 0.7 million
for the same period last year. Not including the Euros 38.0 million
specific financial charge related to the IFRS accounting treatment
of the convertible bond (variance on derivative of the convertible
bonds), the net result at the end of September 2005 is a profit of
Euros 8.5 million. These specific financial charges have no effect
on the Group operating result, or on cash flows. Group net result
Millions Euros End of September Q3 IFRS 2005 2004 2005 2004 Net
income before variance on derivative of CB 8,5 0,7 5,8 4,2 Variance
on derivative of the convertible bonds (CB) (38.0) 0.0 (23.3) 0.0
Net income (loss) (29,5) 0,7 (17,5) 4,2 Operating Result Before
Depreciation and Amortization : The Operating Result Before
Depreciation and Amortization, "ORBDA", previously denominated
"Adjusted EBITDA" in our former financial reports, is defined as
operating income (loss) excluding non-recurring revenues (expenses)
plus depreciation, amortization and additions (deductions) to
valuation allowances of assets and add-back of dividends received
from equity companies. The notion of ORBDA serves as a reference
for CGG debt covenants and is consequently communicated for that
purpose. The ORBDA for the third quarter of 2005 was at Euros 49.4
million, representing 22.7% of revenues and a 23% increase year on
year. The ORBDA at the end of September 2005 was at Euros 146.4
million, representing 24% of the revenues and up 24% year on year.
ORBDA Million Euros End of September Q3 IFRS 2005 2004 2005 2004
ORBDA 146.4 118.4 49.4 40.0 Summary of cash-flows: Cash flows IFRS
Million Euros YTD 2005 YTD 2004 Q3 2005 Q3 2004 Net cash before
changes in working 118.7 93.5 39.1 33.8 capital Net cash flow
provided by operating 109.3 77.0 31.4 3.9 activities Total
purchases of tangible and (82.4) (40.5) (32.1) (13.0) intangible
assets Investment in multi-clients surveys (19.2) (39.8) (4.2)
(12.4) Balance Sheet items: As of September 30th 2005, net equity
was Euros 390.9 million after the specific IFRS accounting
treatment of the convertible bonds which requires the Company to
recognize a non current liability of Euros 72 million. After the
acquisition of Exploration Resources net financial debt was Euros
500.5 million, representing a 128% gearing ratio. Equity and Net
Debt Million Euros IFRS 30/09/ 2005 31/12/2004 Shareholders' equity
390,9 395,6 Net financial debt 500,5 121,8 Gearing ratio 128% 30,8%
Backlog : The backlog as of November 1st 2005 was at the record
level of USD 756 million, up 74% compared to November 1st 2004.
Contact: Christophe BARNINI +(33)-1-64-47-38-10 /
+(33)-1-64-47-38-11 The information included herein contains
certain forward-looking statements within the meaning of Section
27A of the securities act of 1933 and section 21E of the Securities
Exchange Act of 1934. These forward-looking statements reflect
numerous assumptions and involve a number of risks and
uncertainties as disclosed by the Company from time to time in its
filings with the Securities and Exchange Commission. Actual results
may vary materially. The Compagnie Generale de Geophysique group is
a global participant in the oilfield services industry providing a
wide range of seismic data acquisition. processing and geoscience
services and software to clients in the oil and gas exploration and
production business. It is also a global manufacturer of
geophysical equipment through its subsidiary Sercel.. - A detailed
financial statement in French and English is available on our
website: http://www.cgg.com/ . - An English language conference
call is scheduled today at 3:30 p.m. (Paris time) - 8.30 am (US CT)
- 9.30 am (US ET). To take part in the English language conference,
simply dial ten to fifteen minutes prior to the scheduled start
time. - International call-in +1-(719)-457-2679 - US call-in
(800)-500-0177 - Replay +1-(719)-457-0820 & (888)-203-1112 pass
code 6854522 - A French language conference call is scheduled at
5:00 pm (Paris time). To take part in the French language
conference, simply dial ten to fifteen minutes prior to the
scheduled start time. - French call-in number +33-1-70-99-32-08 -
UK call number +44-(0)20-71-62-00-25 - Replay numbers
+44-(0)20-70-31-40-64 & +33-1-70-99-35-29 (access code 68 12
24) You will be asked for the title of the conference: "CGG Q3 2005
Results" and the name of the Chairman of the Board of Directors:
"Robert Brunck". - Slides of the presentation for these conferences
are posted on the company web site and can be downloaded. - These
conferences will be broadcast live on CGG's website
http://www.cgg.com/ and replays will be available for a week
thereafter. +-1-64-47-38-11 (GGY) DATASOURCE: Compagnie Generale de
Geophysique (CGG) CONTACT: Contact: Christophe BARNINI,
+(33)-1-64-47-38-10
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