CGG Reports Final 2003 Consolidated Results
11 März 2004 - 6:00PM
PR Newswire (US)
CGG Reports Final 2003 Consolidated Results 2003 Net Loss of 10.4
million Euros after Non Recurring Items PARIS, March 11
/PRNewswire-FirstCall/ -- CGG (SRD: 0000120164; NYSE: GGY)
published today its audited results for the fiscal year 2003. (in
million Euros) Consolidated Statement of Earnings (French GAAP)
Year ended December 31 2003 2002 Q4 2003 Q4 2002 (Unaudited)
Operating revenues 612.4 700.7 157.8 210.6 Operating profit (loss)
before NRI 21.7 54.5 12.9 20.0 Non Recurring Items (11.1) 7.1 3.0
7.1 Operating profit (loss) after NRI 10.6 61.6 15.9 27.1 Income
from equity investments 6.5 6.4 0.7 2.6 Net interest expenses
(21.0) (32.6) (5.2) (9.8) Exchange gains (losses) 4.6 7.9 (0.8) 2.3
Income taxes (3.1) (17.4) 5.3 (6.4) Goodwill amortization (7.7)
(6.3) (1.5) (1.5) Minority interest (0.3) (2.2) (0.3) (1.3) Net
income (10.4) 17.4 14.1 13.0 Earnings per share in Euros (0.89)
1.49 1.21 1.11 Average number of shares 11,680,718 11,680,718
11,680,718 11,680,718 Revenues Total revenues for the year 2003
were 612 million Euros (US$ 689 million) down 13% in Euros and up
4% in US$ compared to 701 million Euros (US$ 665 million) for 2002.
Total revenues for the fourth quarter 2003 were 158 million Euros
(US$ 186), down 25% in Euros and 13% in US$ compared to 2002 (211
million Euros, US$ 213 million). Revenues per segment Total 2003
revenues for Geophysical Services were 413 million Euros (US$ 464
million), down 19% in Euros and 4% in US$ compared to 2002 (508
million Euros, US$ 483 million). For the fourth quarter 2003,
Geophysical Services revenues were 97 million Euros (US$ 114
million), down 36% in Euros and down 25% in US$ compared to the
same period in 2002 (151 million Euros, US$ 153 million). For the
year ended December 31, 2003 Sercel's Geophysical equipment total
sales were 217 million Euros (US$ 245 million), down 17% in Euros
and stable in US$ compared to 262 million Euros (US$ 247 million)
for 2002. For the year ended December 31, 2003 Sercel's Geophysical
equipment external sales were 199 million Euros (US$ 226 million)
up 3% in Euros and 24% in US$ compared to 193 million Euros (US$
182 million) in 2002. For the fourth quarter 2003, Sercel's
Geophysical equipment total sales were 65 million Euros (US$ 77
million), up 5% in Euros and 22% in US$ compared to 62 million
Euros (US$ 63 million) for the fourth quarter 2002. Operating
Result The CGG operating profit for 2003 was 10.6 million Euros
compared to 61.6 million Euros in 2002. The CGG operating profit
before NRI for 2003 was 21.7 million Euros. The CGG operating
profit for the fourth quarter 2003 was 15.9 million Euros compared
to 27.1 million Euros for the fourth quarter 2002. Operating loss
for Geophysical Services in 2003 was 29.8 million Euros, including
particularly a 17.7 million Euros provision for land restructuring,
compared to an operating profit of 27.4 million Euros in 2002.
Operating profit for Sercel in 2003, which represented 19.7% of
revenues, was 42.9 million Euros compared to an operating profit of
51.2 million Euros in 2002. This decrease in the operating
profitability of Geophysical Services results mainly from the
unfavorable Euro/Dollar exchange rate impact, estimated at 20
million Euros, from operating losses in the land acquisition
business and from lower exclusive marine acquisition prices. With
2003 revenues of 109 million Euros exceeding the investment of 105
million Euros, the multi-client sales exceeded the investments for
the fourth consecutive year. Processing & Reservoir, in a
market increasingly driven by technology and imaging capacity, has
maintained its market share and global performance. In the
Geophysical Equipment market, which was overall stable in 2003 and
characterized by strong demand for land equipment and extremely low
demand for marine equipment, Sercel reinforced its market share,
maintained a strong profitability with a 20% operating margin
despite an unfavorable Euro/Dollar exchange rate impact estimated
at 30 million Euros, and increased its commercial and technological
portfolio through acquisitions in China, Australia and France.
Segment Information 2003 2002 Q4 2003 Q4 2002 Operating revenues
Services 414.4 508.4 96.7 151.1 Products 216.9 262.4 64.9 61.9
Elimination (18.9) (70.1) (3.8) (2.4) Total 612.4 700.7 157.8 210.6
Operating profit (loss) Services before NRI (18.7) 20.3 (1.7) 7.2
Services after NRI (29.8) 27.4 2.3 14.3 Products 42.9 51.2 12.5
15.1 Corporate (11.4) (13.2) (3.4) (4.7) Elimination 8.9 (3.8) 4.5
2.4 Total 10.6 61.6 15.9 27.1 Land acquisition restructuring The
land acquisition restructuring program initiated during the third
quarter 2003 was fully implemented and completed by the end of
2003. A number of international representation offices were closed
and 247 people left the company. This restructuring plan will save
approximately 30 million Euros of fixed costs on a yearly basis,
with full effect in the second half of 2004. A 19.3 million Euros
charge has been booked in the 2003 accounts, split into 0.9 million
Euros for restructuring, 11.8 million Euros for provisions and
risks and 6.6 million Euros for depreciation of assets, of which
1.6 million Euros have been booked as goodwill depreciation. The
associated cash disbursement will take place the first quarter of
2004. EBITDA Adjusted EBITDA in 2003 was 162 million Euros, down
23% compared to 210 million Euros in 2002 and represented 26% of
revenues. At December 31st 2003 2002 Q4 2003 Q4 2002 Adjusted
EBITDA 162.3 210.1 39.6 63.1 Cash flow from operations* 185.7 219.0
46.3 86.5 Capital expenditure (44.4) (130.6) (18.3) (17.2)
Investment in library (109.7) (130.1) (17.7) (30.9) (*) after
change in working capital & proceeds of sale of US land library
Net Result Net profit for 2003 before NRI was 2.3 million Euros.
The net result for 2003 is a loss of 10.4 million Euros compared to
a net profit of 17.4 million Euros in 2002. The net profit for the
fourth quarter 2003 was 14.1 million Euros compared to 13.0 million
Euros in 2002 2003 2002 Q4 2003 Q4 2002 Net Result (10.4) 17.4 14.1
13.0 Earnings per share in Euro (0.89) 1.49 1.21 1.11 Average
number of shares 11,680,718 11,680,718 11,680,718 11,680,718
Shareholder Equity and Net debt At December 31st 2003, net debt
stood at 139 million Euros. The gearing ratio of the CGG Group at
the end of 2003 represented 35% of the equity of 397 million Euros,
a steady improvement compared to the 39% at the end of the third
quarter 2003 and the 46% at the end of 2002. 2003 2002
Shareholders' equity 396.6 437.5 Net debt 139.2 201.7 Gearing ratio
35.1% 46.1% Backlog As of March 1st 2004, CGG's total backlog stood
at US$ 337 million, up 10% compared to 1st of November 2003 and up
16% compared to the same time last year. Robert BRUNCK, chairman
and CEO declared: "While the market in 2003 continued to suffer
from the combined effects of very slow demand and persistent
overcapacity, CGGhas further reduced its debt, has delivered
positive earnings before exceptional items and preserved its
technological leadership. The excellent Sercel earnings were
responsible to a large extent for this performance, emphasizing
once again the urgent need to see our Seismic Services operate in a
radically different business model. Only a consolidation of our
industry followed by a significant reduction in capacity,
particularly in marine, will bring the changes needed to allow the
actors of the industry to reach satisfactory level of return. This
is the reasoning behind our stake in our competitor PGS. Beyond
this strategic horizon, which should clarify itself one way or
another in the near future, it seems that 2004 should see the start
of a resumed growth in our markets. This is an encouraging trend in
the context of an otherwise uncertain euro/dollar parity." The
information included herein contains certain forward-looking
statements within the meaning of Section 27A of the securities act
of1933 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
a public presentation at 10 am; 10, avenue d'Iena (Hubert
Rousselier Amphitheatre) -- Paris 16th arrondissement. -- Copies of
his presentation for this conference are posted on the company web
site and can be downloaded. -- A press release is available on our
website: http://www.cgg.com/ -- An English language conference call
is scheduled at 3 p.m. (Paris time) -- 8 a.m. (U.S. CT) -- 9 a.m.
(U.S. 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 26 04 - U.S. call-in: (888) 857 69
32 You will be asked for the name of the conference: "CGG Year 2003
Results" and the name of the Chairman ofthe Board of Directors:
"Robert Brunck." -- A French language conference call is scheduled
at 4.30 p.m. (Paris time). To take part in the French language
conference, simply dial five to ten 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 You will be asked for the name of the
conference: "CGG Year 2003 Results" and the name of the Chairman of
the Board of Directors: "Robert Brunck." A replay will start 2
hours after the close of the call. To listen to the replay, dial
+44 20 82 88 44 59 (access code 29 33 62 required from France
only). 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: Compagnie Generale de Geophysique CONTACT:
Christophe Pettenati-Auziere, +33-1-64-47-36-75, or Christophe
Barnini, +33-1-64-47-38-10,both for CGG, Web site:
http://www.cgg.com/
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