Compagnie Generale de Geophysique: Third Quarter 2004 Results
November 16 2004 - 12:00AM
PR Newswire (US)
Compagnie Generale de Geophysique: Third Quarter 2004 Results
Upturn in the Geophysical Services Market Resulting in a Strong
Increase of the Group Operating Result and in a Record High Group
Backlog of US$ 435 Million PARIS, November 16
/PRNewswire-FirstCall/ -- Compagnie Generale de Geophysique (ISIN:
FR0000120164 ; NYSE : GGY) ) published today its consolidated
results for the third quarter of 2004. Q3 2004 Highlights: Revenues
for the third quarter of 2004 were Euros 166.8 million, up 23% in
Euros and 33% in USD compared to the third quarter of 2003. Group
operating profit of Euros 10.7 million compared to a Euros 0.2
million operating profit before NRI in Q3 2003. Geophysical
Services operating profit of Euros 1.6 million compared to a Euros
12.6 million operating loss before NRI in Q3 2003. Sercel operating
margin of 17%. Exceptional currency exchange loss of Euros 3.8
million resulting from the liquidation of Kantwell, the subsidiary
which previously owned the CGG Mistral vessel. Q3 2004 net loss of
Euros 3.2 million compared to a Euros 6.5 million net loss before
NRI in Q3 2003. Record high Group backlog of US$ 435 million.
Chairman and CEO Robert Brunck stated: "This third quarter
constitutes a turning point in our market. For the first time after
five consecutive quarters, Geophysical Services show a positive
operating result. The increase in marine acquisition prices, a good
productivity of the vessels and a high level of after-sales from
our multi-client library contributed to this performance. This
positive trend should further firm up during the coming quarters.
The recent awards and firm leads in land acquisition allow us to
enter into the first half of 2005 with greater confidence on this
specific segment. With Sercel maintaining its very strong
profitability and Geophysical Services benefiting from an increase
in exploration investment, CGG is well poised to further develop
its financial performance in 2005." Revenue and earnings with the
comparative amounts for the corresponding periods of fiscal year
2003 are as follows: Consolidated Statement of Earnings Million
Euros Year to Date Third Quarter 2004 2003 2004 2003 Operating
revenues 488.2 454.6 166.8 135.7 Operating profit (loss) (1) 23.7
(5.3) 10.7 (17.2) Income from equity investments 7.7 5.8 2.9 0.9
Goodwill depreciation (6.4) (6.2) (2.2) (3.2) Net interest expense
(16.7) (15.8) (5.0) (3.6) Exchange gains (losses) 0.9 5.4 (3.2)
(0.7) Income taxes (15.6) (8.4) (6.0) (1.7) Minority interest (0.9)
0.0 (0.4) 0.0 Net income (loss) (7.3) (24.5) (3.2) (25.5) Diluted
earnings per share (Euros) (0.62) (2.07) (0.27) (2.15) (1) The
third quarter 2003 includes non recurring expenses of EUR17.4
million Revenues: At Euros 166.8 million, CGG total revenues for
the third quarter of 2004 were up 23% compared to the third quarter
of 2003 and up 33% in USD. Total revenues for Geophysical Services
for the third quarter 2004 were Euros 101.5 million, up 34% in
Euros, (+45% in USD), compared to the third quarter 2003. Land
acquisition total revenues for the third quarter 2004 fell 8% to
Euros 18.8 million (stable in USD), compared to the third quarter
2003. At the end of September 2004, seven crews were in operation.
Offshore revenues for third quarter 2004 were Euros 55.2 million,
up 110% in Euros and 127% in USD compared to the third quarter
2003. The Offshore SBU achieved a record level of revenues in USD.
Multi-client after sales were high at Euros 14.1 million compared
to the same period last year. The net book value of the offshore
seismic data library at the end of September stood at Euros 143
million. Processing-Reservoir revenues, at Euros 27.5 million for
third quarter 2004, fell 5% in Euros and increased 2% in USD,
compared to the third quarter 2003. For the third quarter 2004,
Sercel total sales were Euros 69.2 million, up 8 % in Euros and up
17% in USD, compared to the third quarter 2003. External sales for
the third quarter 2004 were Euros 65.3 million, up 9% in Euros and
up 19% in USD. At the end of September 2004, CGG total revenues
stood at Euros 488.2 million, a 7% increase in Euros and 19% in USD
compared to the first nine months of 2003. Total revenues for
Geophysical Services were Euros 271.9 million, down 14% in Euros
and 5% in USD compared to the same period last year. Sercel total
revenues were Euros 228.9 million, up 51% in Euros and up 66% in
USD compared to the same period last year. At the end of September
2004, Sercel external sales were Euros 216.3 million, up 57% in
Euros and 73% in USD compared to the same period last year.
Operating Result : For the third quarter 2004, the Group operating
result is a profit of Euros 10.7 million compared to an operating
loss of Euros 0.2 million before NRI for the third quarter 2003.
The third quarter 2004 operating result would have increased by an
additional Euros 6 million with a stable EUR/$ exchange rate. For
the third quarter 2004, the operating result from Geophysical
Services shows a profit of Euros 1.6 million compared to an
operating loss of Euros 12.6 million before NRI for the third
quarter 2003. Strong vessels productivity and the high level of
after-sales in multi-client significantly contributed to the return
of Geophysical Services to a profitable situation, despite the
still low level of activity in land acquisition. Including Argas,
Services improved their EBIT margin to a EUR 4.5 million profit.
For the third quarter 2004, the operating result of Sercel shows a
profit of Euros 11.7 million, representing 17% of revenues,
compared to an operating result of Euros 13.8 million for the third
quarter 2003. The sustained international demand in Land and Marine
acquisition products supported this good operational performance.
For the first nine months of 2004, the Group operating result is a
profit of Euros 23.7 million, a significant increase compared to
the Euros 12.1 million profit before NRI at the end of September
2003. This operating profit does not include a positive
contribution of Euros 7.7 million by subsidiaries, principally
Argas, consolidated under the equity method compared to a positive
contribution of Euros 5.8 million at the end of September 2003.
Segment information Million Euros Year to Date Third Quarter 2004
2003 2004 2003 Operating revenues Services 273.5 317.7 101.7 76.5
Products 228.9 152.0 69.2 63.8 Elimination (14.2) (15.1) (4.1)
(4.6) Total 488.2 454.6 166.8 135.7 Operating profit (loss)
Services (1) (16.4) (31.1) 1.6 (30.0) Products 45.5 30.4 11.7 13.8
Corporate (10.1) (8.0) (4.2) (2.7) Elimination 4.7 3.4 1.6 1.7
Total after NRI 23.7 (5.3) 10.7 (17.2) (1) The third quarter 2003
includes non recurring expenses of EUR17.4 million Operating Result
Before Depreciation and Amortization (ORBDA): The Operating Result
Before Depreciation and Amortization, "ORBDA", previously
denominated "Adjusted EBITDA" in our previous 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 ORBDA for the third
quarter 2004 stood at Euros 40.5 million, 24.3% of revenues. The
ORBDA at the end of September stood at Euros 111.3 million, 22.8%
of revenues. Million Euros Year to Date Third Quarter 2004 2003
2004 2003 ORBDA 111.3 122.7 40.5 22.3 Summary of cash-flows: Year
to Date Third Quarter Million Euros 2004 2003 2004 2003 Cash-flow
from operations 99.0 84.9 36.0 9.6 Cash-flow after change in
working capital 64.8 135.8 4.3 17.1 Capital expenditures (37.2)
(26.1) (11.9) (7.5) Investment in multi-client library (39.8)
(92.0) (12.4) (25.3) Net Result: The net group consolidated result
for the third quarter 2004 includes an exceptional currency
exchange loss of Euros 3.8 million for the liquidation of Kantwell,
the subsidiary owner of the Mistral vessel. The net group
consolidated result for the third quarter 2004 shows a Euros 3.2
million loss, compared to the Euros 6.5 million net loss before NRI
for the third quarter 2003. At the end of September, the net group
consolidated result shows a loss of Euros 7.3 million compared to a
net loss of Euros 5.5 million before NRI at the end of September
2003. Equity and net debt: Million Euros YTD 2004 End of 2003
Shareholders' equity 396.2 396.6 Net Debt 185.8 139.2 Gearing ratio
46.9% 35.1% Backlog: The backlog as of November 1st 2004 stands at
US$ 435 million, a record high level for the Group and a 43%
increase compared to last year. 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. Compagnie Generale de Geophysique 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. A press release and a full report including
financial tables will be available on our website
http://www.cgg.com/ at 8 a.m. on this date. - An English language
conference call is scheduled at 3 p.m. (Paris time) - 8:00 am (US
CT) - 9.00 am (US ET) To take part in the English language
conference, simply dial five to ten minutes prior to the scheduled
start time. International call in +1-719-457-2617 US call in
+1(800)-231-9012 Replay Number +1-719-457-0820 / +1-888-203-1112
You will be asked for the name of the conference "CGG Q3 2004
Results" - A French language conference call is scheduled at 4.30
p.m. (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 +33-1-70-99-32-12 UK call-in number
+44-20-71-62-01-25 Replay number +44(0)208-288-44-59 (access code
29 33 62) You will be asked for the name of the conference "CGG Q3
2004 Results". Copies of the presentation for this conference will
be posted on the company web site and can be downloaded. Both calls
(in English and in French) will be broadcast live on CGG's website
and replays will be available for 7 days thereafter. DATASOURCE:
Geophysique CONTACT: Contacts: Christophe PETTENATI-AUZIERE +
33-1-64-47-36-75, Christophe BARNINI +33-1-64-47-38-10 Email :
Internet : http://www.cgg.com/
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