CGG (Compagnie Generale de Geophysique): First Quarter 2005 Results
12 Mai 2005 - 8:00AM
PR Newswire (US)
CGG (Compagnie Generale de Geophysique): First Quarter 2005 Results
Revenues in $ up 25% at $252 M PARIS, May 12 /PRNewswire-FirstCall/
-- Compagnie Generale de Geophysique (ISIN: 0000120164 - NYSE: GGY)
published today its consolidated results for the first quarter of
2005. Pursuant to European regulation ndegrees1606/2002 dated July
19, 2002, the consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRSs) and its interpretations adopted by the International
Accounting Standards Board (IASB). These are the Group's first IFRS
consolidated financial statements. They include comparative
information for the period of 2004 using the same standards. Q1
2005 highlights: Revenues for the first quarter of 2005 are up 18%
in Euros and up 25% in USD compared to the first quarter of 2004,
representing a record first quarter for both Sercel and Geophysical
Services. Geophysical Services operating result (not including
Argas) at break even, an improvement of nearly EUR 7M. Sercel
operating income of EUR15.7M representing a 20% operating margin.
Group operating result and Group net result both stable year on
year at respectively EUR13.9M and EUR 5.0M, despite a negative
EUR/$ exchange rate effect estimated at EUR4.0M. Refinancing of
existing $150M Senior Notes through a new $165M issue (yield 7,5%
compared to 105/8% and maturity 2015 vs 2007). Record Group backlog
of $485M as of May 1st 2005, a 60% increase year on year.
Consolidated Statement of Earnings (non audited) Million Euros
Period ended March 31st IFRS 2005 2004 Operating revenues 190.4
161.8 Gross margin 40.5 34.2 Operating profit (loss) 13.9 14.9
Income (loss) from equity investments 3.8 2.1 Cost of financial
debt (5.4) (6.0) Other financial items 0.9 (1.4) Income taxes (8.1)
(4.6) Net income (loss) 5.1 5.0 Net income loss attributable to
Group share 5.0 5.0 Earnings per share (Euros) 0.43 0.43 Revenues:
At Euros 190 million (USD 252 million), revenues for the first
quarter of 2005 are up 18% in Euros and 25% in USD compared to
Euros 162 million (USD 202 million) for the first quarter of 2004.
Per segment: Total revenues for Geophysical Services for the first
quarter 2005 are Euros 113 million (USD 150 million), up 37% in
Euros and 45% in USD compared to Euros 83 million (USD 104 million)
for the first quarter of 2004. Land revenues are Euros 23 million
(USD 30 million), down 8% in euros and stable in $ when compared to
the first quarter of 2004 revenues of Euros 25 million (USD 31
million). After the trough of the second semester of 2004, the land
acquisition SBU with ten crews in operation will return in the
second quarter of 2005 to a level of activity in line with the
objective of its restructuring plan. Offshore revenues at Euros 67
million (USD 89 million) for the first quarter 2005 are up 92% in
Euros and 104% in dollars compared to Euros 35 million (USD 44
million) for the first quarter of 2004. This strong improvement
reflects the price increase in the exclusive marine market, the
excellent productivity of the fleet and the good level of
multi-client after-sales, which doubled year on year. The net book
value of the offshore seismic data library at the end of March 2005
is Euros 119 million. For the first quarter 2005, Processing and
Reservoir revenues are Euros 24 million (USD 32 million), up 2 % in
Euros and 9% in USD compared to Euros 23 million (USD 29 million)
for the first quarter of 2004 in a market stimulated by the demand
in marine acquisition. For the first quarter 2005, Sercel total
sales are Euros 81 million (USD 107 million), up 3 % in USD,
compared to the already high level of sales in the first quarter of
2004 of USD 103 million (Euros 83 million). External sales for the
first quarter 2005 are Euros 77 million (USD 102 million). Sercel
in the first quarter took already advantage of its good positioning
in a market characterised by a steady high demand for land
equipment and an increasing demand for marine equipment. Operating
Income: The Group Operating Income for the first quarter 2005 is a
Euros 13.9 million profit compared to a Euros 14.9 million profit
for the first quarter of 2004 which benefited from a Euros 5.9
millions positive impact of other revenues (compared to Euros 0.9
millions in Q1 05) of which in particular insurance proceeds. The
Group Operating Income including Argas equity result for the first
quarter 2005 is Euros 17.7 million compared to Euros 17.0 million
in the first quarter 2004. With a better contribution from the
Offshore SBU, the Geophysical Services operating income is at break
even in the first quarter 2005 compared to an operating loss of 6.8
million in the first quarter 2004. Sercel's operating income for
the first quarter of 2005 represents 20% of revenues, in line with
2004 average profitability but down compared to the first quarter
2004, which represented a 28% exceptional operating margin, as a
result of a very favourable products mix. Segment information
Million Euros Period ended March 31st IFRS 2005 2004 Operating
revenues Services 113.6 83.9 Products 80.6 82.8 Elimination (3.8)
(4.9) Total 190.4 161.8 Operating profit (loss) Services 0.1 (6.8)
Products 15.7 23.0 Corporate (2.8) (2.5) Elimination 0.9 1.2 Total
13.9 14.9 Net Result: Net result for the first quarter 2005 is a
stable Euros 5.0 million profit stable compared to the first
quarter 2004, despite a negative EUR/$ exchange rate impact of
EUR4.0 million, and increased income taxes. 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 ORBDA for the first quarter 2005 is
Euros 48.5 million, representing 26% of revenues and a 25% increase
year on year. Summary of cash-flows Million Euros Period ended
March 31st IFRS 2005 2004 Net Cash after cost of net debt* 39.7
29.1 Net Cash before cost of net debt* 46.5 35.6 Cash flow provided
by operating activities 17.8 41.3 Capital expenditures (13.5)
(14.2) Investment in library (6.3) (18.0) * Before changes in
working capital Balance Sheet items: As of March 31st 2005, net
equity is Euros 443 million and net debt Euros 133 million,
representing a 30% gearing ratio. During the first quarter, the
company successfully closed its offering of USD165 million of 71/2%
Senior Notes due 2015. The net proceeds will be used to redeem and
pay accrued interest on all outstanding aggregate principal of our
existing 10 5/8 % Senior Notes due 2007. The charge associated with
this reimbursement, split for 2/3 in reimbursement premium and for
1/3 in recording of the unamortized balance of issuance fees,
amounts to EUR8.5 million. It will be booked in Q2 accounts. As a
result of the overall refinancing of the 2007 Senior Notes done
since the beginning of the year, the annual costs savings in
interest expenses will slightly exceed EUR5 million. Equity and Net
Debt Million Euros IFRS 31/03/2005 31/12/2004 Shareholders' equity
442.8 428.8 Net debt 133.4 122.5 Gearing ratio 30.1% 28.6% Backlog:
The backlog as of May 1st 2005 was USD 485 million up 60% compared
to May 1st 2004. 2005 perspectives: The first quarter 2005 results
are in line with the company's forecasts. The market demand for
geophysical services and equipment is confirmed by the substantial
increase in backlog. The company objectives for 2005 especially the
significant improvement in the profitability of Geophysical
Services, are supported by this favourable market trend. 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. - Robert
Brunck, Chairman and CEO, will comment on the results during the
shareholders meeting at 9:30 am - Maison de la Mecanique - 39, 41
rue Louis Blanc - Courbevoie, France. - An English language
conference call is scheduled at 3 p.m. (Paris time) - 8 am (US CT)
- 9 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 +1-719-457-2679 - US call-in 800-500-01-77
- Replay +1-719-457-0820 & 888-203-1112 - code 9441943 You will
be asked for the name of the conference: "CGG Q1 2005 Results" and
the name of the CEO: "Robert Brunck". Slides of the presentation
for this conference call will be posted on the company web site and
can be downloaded. This conference call will be broadcast live on
CGG's website and replays will be available for a month thereafter.
Contact: Christophe Barnini, +33-1-64-47-38-10 DATASOURCE:
Compagnie Generale de Geophysique (CGG) CONTACT: Christophe
Barnini, +33-1-64-47-38-10
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