CGG 2005 Results
09 March 2006 - 5:02PM
PR Newswire (US)
Operating Result of EUR75.1 Million up 64% PARIS, March 9
/PRNewswire-FirstCall/ -- Compagnie Generale de Geophysique (ISIN:
0000120164 - NYSE: GGY) published today its unaudited consolidated
results for the fourth 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. 2005 highlights: - 2005 Group revenues of Euros
870 million (USD 1,081 million) up 27% in Euros and USD compared to
2004. - Group operating profit of Euros 75.1 million, up 64%
compared to Euros 45.7 million in 2004. - Geophysical Services:
Revenues of Euros 552 million (USD 686 million), up 42% year on
year in Euros and USD and an operating profit of Euros 25.2 million
not including the Euros 12.7 million Argas contribution. - Sercel:
Revenues of Euros 379 million (USD 470 million) up 21% year on year
in Euros and USD and an operating profit of Euros 79.8 million, a
21.1% operating margin. - Acquisition of Exploration Resources
entirely refinanced through the December rights issue and the add
on to the 2015 Senior Notes completed in February 2006. - Including
Euros 11.5 million specific financial charges related to the IFRS
accounting treatment of the convertible bond and Euros 32.5 million
financial charges related to non recurring financing and
refinancing operations completed in 2005, the Group net loss was
Euros 6.8 million. - Record Group backlog of USD 990 million as of
March 1st 2006, a 108 % year on year increase. Q4 2005 highlights:
- Fourth quarter 2005 Group revenues of Euros 262 million (USD 312
million) up 34% in Euros and up 23% in USD compared to the fourth
quarter of 2004. - Group operating profit of Euros 30.1 million
representing a 11.5% operating margin. - Geophysical Services:
Revenues of Euros 161 million (USD 191 million) and operating
profit of Euros 11.1 million not including the Euros 2.9 million
Argas contribution. - Sercel: Revenues of Euros 123 million (USD
146 million) and operating profit of Euros 30.5 million, a 24.8%
operating margin. - Group net profit of Euros 20.1 million
including a Euros 26.5 million specific financial profit related to
the IFRS specific accounting treatment of the convertible bond and
Euros 21.5 million non recurring financial charges. - Issuance of
5.2 millions new shares as a result of the conversion of 82% of the
2012 convertible bonds in November and of the December rights
issue. Comments and Perspectives : CGG Chairman & CEO, Robert
BRUNCK, commented: "With a strong fourth quarter as anticipated,
the CGG Group has exceeded one billion dollars in revenues in 2005,
while increasing significantly its operating profitability. We
enter into 2006 with a reinforced position in Marine, with a sound
balance sheet, after having fully completed the refinancing of our
Exploration Resources acquisition, and a record high backlog. In a
very favourable market trend impacting positively all segments of
our activities, CGG's financial performance should mark a
significant improvement in 2006." IFRS Consolidated Statement of
Earnings Million Euros 2005 2004 Q4 2005 Q4 2004 Operating revenues
869.9 687.4 262.4 196.4 Gross profit 201.8 133.8 66.3 37.6
Operating income(loss) 75.1 45.7 30.1 19.5 Equity income (loss) of
affiliates 13.0 10.3 3.4 2.6 Cost of financial debt (42.3) (27.8)
(15.6) (11.0) Variance on derivative on convertible bonds (11.5)
(23.5) 26.5 (23.5) Other financial income (14.5) 0.8 (15.8) 2.2
(loss) Income taxes (26.6) (10.9) (8.1) 4.2 Net income (loss) (6.8)
(5.4) 20.5 (6.0) Net income (loss) per (0.64) (0.55) 1.55 (0.56)
common share Weighted average common 12,095,925 11,681,406
12,941,857 11,681,968 shares Revenues 2005 and fourth quarter 2005:
Total Group revenues at the end 2005 were Euros 869.9 million (USD
1,081 million), up 27% in Euros and in USD, compared to the same
period of last year (Euros 687.4 million, USD 854.8 million). Group
revenues for the fourth quarter of 2005 were Euros 262.4 million
(USD 312.3 million), up 34% in Euros and up 23% in USD compared to
2004 (Euros 196.4 million, USD 254.4 million). Revenues 2005 and
fourth quarter 2005 per segment: Total revenues for Geophysical
Services for 2005 were Euros 552.3 million (USD 686.2 million), up
42% in Euros and in USD compared to the fourth quarter of 2004
(Euros 388.1 million, USD 482.5 million). Revenues resulting from
the integration of Exploration Resources as of September 1st, are
Euros 28.8 million. Land revenues were Euros 119.8 million (USD
148.8 million) up 55% in Euros and in USD when compared to 2004
(Euros 77.3 million, USD 95.8 million). Offshore 2005 revenues of
Euros 319.5 million (USD 397.1 million) were up 55% in Euros and in
USD compared to 2004 (Euros 205.8 million, USD 256.2 million). In
2005, the CGG fleet was extended through both the upgrade to 3D
capability of the Laurentian and the progressive integration of
Exploration Resources vessels, which shall extend well into 2006.
Multi-client sales were Euros 133.5 million, up 24% in Euros and in
USD year on year. Multi-clients after sales of Euros 97.2 million
were up 41% year on year in Euros and in USD. 2005 Processing and
Reservoir revenues were Euros 113.0 million (USD 140.4 million) up
8 % in Euros and in USD compared to 2004 (Euros 105.0 million, USD
130.4 million). Total revenues for Geophysical Services for the
fourth quarter 2005 were Euros 160.7 million (USD 191.3 million) up
42% in Euros and 30% in USD compared to the fourth quarter of 2004
(Euros 113.4 million, USD 146.8 millions). Land revenues for the
fourth quarter 2005 were Euros 31.6 million (USD 37.6 million) up
94% in Euros and 79% in USD when compared to the fourth quarter of
2004 (Euros 16.3 million, USD 21.1 million). 12 crews were in
operation during this quarter. Offshore revenues for the fourth
quarter 2005 were Euros 97.3 million (USD 115.8 million), up 42% in
Euros and 31% in USD compared to the fourth quarter of 2004 (Euros
68.5 million, USD 88.6 million). Multi-client sales were Euros 47.1
million including Euros 24.5 million of after sales. Processing and
Reservoir revenues for the fourth quarter 2005 were Euros 31.8
million (USD 37.9 million), up 11 % in Euros and 2% in USD compared
to same period last year (Euros 28.6 million, USD 37.1 million).
Total revenues for Sercel at the end of 2005 were Euros 378.8
million (USD 469.8 million) up 21% in Euros and in USD compared to
the same period last year (Euros 313.6 million, USD 389.9 million).
2005 External sales were Euros 317.6 million (USD 394.8 million).
For the fourth quarter of 2005, Sercel total sales were Euros 122.9
million (USD 146.2 million), up 45% in Euros and 33% in USD when
compared to the fourth quarter of 2004 (Euros 84.7 million, USD
109.7 million). External sales for the fourth quarter of 2005 were
Euros 101.7 million (USD 121 million). 2005 and fourth quarter 2005
Group Operating Income: The Group Operating Profit at the end of
2005 was up 64% at Euros 75.1 million compared to Euros 45.7
million operating profit in 2004. This operating profit does not
take into account a positive contribution of Euros 12.7 million
from Argas. The Group Operating Profit for the fourth quarter of
2005 was up 54% at Euros 30.1 million compared to Euros 19.5
million operating profit for same period last year. This operating
profit does not take into account a positive contribution of Euros
2.9 million from Argas. 2005 and fourth quarter 2005 Group
Operating Income per sector: The Geophysical Services 2005
operating profit was Euros 25.2 million compared to a Euros 19.8
million operating loss in 2004, representing a Euros 45 million
year on year improvement. This operating profit does not take into
account a positive contribution of Euros 12.7 million from Argas.
In 2005, the land acquisition business unit kept improving its
operational performances. Multi-clients sales increased
substantially, thus demonstrating the very good quality of our
library. At the end of December 2005, the net book value of the
multi-client library stood at Euros 94 million. Offshore activity
was affected in 2005 by unfavourable weather conditions in the
North Sea and by a lower than anticipated utilization rate of our
vessels resulting from numerous transits and immobilizations.
Processing and Reservoir activity increased its profitability
throughout the year in a growing market gradually benefiting from
increasing marine volumes. The Geophysical Services operating
profit for the fourth quarter of 2005 was Euros 11.1 million (not
including a Euros 2.9 million contribution from Argas) compared to
a Euros 4.3 million operating loss for the fourth quarter of 2004.
This operating profit takes into account a Euros 5 million negative
impact resulting from increased amortization charges following the
purchasing accounting of Exploration Resources assets. In 2006,
with the planned progressive introduction of additional marine
capacity, Exploration Resources will reach its financial
performance objectives. Sercel 2005 operating profit was Euros 79.8
million corresponding to a 21.1% operating margin, compared to a
Euros 64.5 million operating profit in 2004. In 2005, Sercel has
maintained its market share and launched a new generation of land
and marine acquisition equipments. Sercel operating profit for the
fourth quarter of 2005 was Euros 30.5 million, a 24.8% operating
margin compared to Euros 18.0 million for the fourth quarter 2004,
corresponding to a 21.2% operating margin. Segment information
Million Euros IFRS 2005 2004 Q4 2005 Q4 2004 Operating revenues
Services 552.9 389.3 161.4 113.3 Products 378.8 313.6 122.9 84.8
Elimination (61.8) (15.5) (21.4) (1.9) Total 869.9 687.4 263.1
196.4 Operating income (loss) Services 25.2 (19.8) 11.1 (4.3)
Products 79.8 64.5 30.5 18.0 Corporate (15.8) (13.0) (6.9) (3.6)
Elimination (14.1) 14.0 (4.6) 9.3 Total 75.1 45.7 30.1 19.4 Net
Result : The 2005 net result was a loss of Euros 6.8 million
compared to a net loss of Euros 5.4 million in 2004. This result is
positive at Euros 37.2 million, (Euros 22.4 million comparable in
2004) before Euros 11.5 million specific financial charges related
to the IFRS accounting treatment of the convertible bond and Euros
32.5 million financial charges related to non recurring financing
and refinancing operations completed in 2005. The net result for
the fourth quarter of 2005 was a profit of Euros 20.1 million
compared to a loss of Euros 6.5 million for the same period last
year. 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 at the end of
2005 was at Euros 229.5 million, representing 26.4%% of the
revenues and up 33% year on year. The ORBDA for the fourth quarter
of 2005 was at Euros 81 million, representing 31% of revenues and a
48% increase year on year. Million Euros IFRS 2005 2004 Q4 2005 Q4
2004 ORBDA 229.5 172.8 80.6 54.3 Summary of cash-flows: IFRS
Million Euros 2005 2004 Q4 2005 Q4 2004 Net cash before changes in
working 204.0 149.7 82.8 56.2 capital Net cash flow provided by
operating 182.4 126.9 73.1 49.9 activities Total purchases of
tangible & (134.5) (56.3) (53.2) (13.0) intangible assets
Investment in multi -clients library (32.0) (51.1) (12.8) (12.4)
Balance Sheet items : As at the end of 2005, after the conversion
of 82% of the 2012 convertible bonds and the right issue in cash,
the net shareholders' equity was Euros 699 million and the net
financial debt was Euros 297 million, representing a 42.4% gearing
ratio. The total number of shares outstanding on December 31st,
2005 was 17.1 millions. The refinancing of Exploration Resources
acquisition was fully completed in February 2006, with the issuance
of a USD 165 million add-on to the 7.50% Senior notes due 2015.
Equity and Net Debt Million Euros IFRS 31/12/ 2005 31/12/2004
Shareholders' equity 698.5 393.2 Net financial debt 297.2 121.8
Gearing ratio 42.4% 31.0% Backlog : The backlog as of March 1st
2006 was at the record level of USD 990 million, up 108% compared
to USD 475 million on March 1st 2005.
---------------------------------------- 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 reservoir services and software to its
clients in the oil and gas exploration and production industry. It
is also a global manufacturer of geophysical equipment through its
subsidiary Sercel. - Robert BRUNCK, Chairman and CEO, will comment
on the results during a public presentation at 10:00 am - at Palais
Brongniart - Place de la Bourse (entry in front of Ndegrees40 rue
Notre Dame des Victoires) PARIS 2nd. An English language conference
call is scheduled today at 4:00 p.m. (Paris time) - 9:00 am (US CT)
- 10:00 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 4342201 You will be asked for the title
of the conference: "CGG 2005 Results" and the name of the Chairman
& CEO: "Robert Brunck". Slides of the presentation for these
conferences are posted on the company web site and can be
downloaded before the conference call. - These conferences will be
broadcast live on CGG's website http://www.cgg.com/ and replays
will be available for one month thereafter. DATASOURCE: Compagnie
Generale de Geophysique (CGG) CONTACT: Contact : Christophe BARNINI
+33-1-64-47-38-10
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