Compagnie Generale de Geophysique: Third Quarter 2003 Results
13 November 2003 - 5:00PM
PR Newswire (US)
Compagnie Generale de Geophysique: Third Quarter 2003 Results 11%
increase of YTD revenues expressed in USD Third quarter: PARIS,
Nov. 13 /PRNewswire-FirstCall/ -- Compagnie Generale de Geophysique
(NYSE: GGY; ISIN: FR0000120164) published today its consolidated
results for the third quarter of 2003. Revenue and earnings with
the comparative amounts for the corresponding periods of fiscal
year 2002 are as follows: Consolidated Statement of Earnings
Million of Euros Year to Date Third Quarter 2003 2002 2003 2002
Operating revenues 454.6 490.1 135.7 153.8 Operating profit (loss)
before NRI 12.1 34.5 0.2 17.6 Non Recurring Items (17.4) 0.0 (17.4)
0.0 Operating profit (loss) after NRI (5.3) 34.5 (17.2) 17.6 Income
(loss) from equity investments 5.8 3.8 0.9 2.6 Goodwill
depreciation (6.2) (4.8) (3.2) (1.5) Net interest expense (15.8)
(22.8) (3.6) (8.5) Exchange gains (losses) 5.4 5.6 (0.7) 0.9 Income
taxes (8.4) (11.0) (1.7) (6.2) Minority interest 0.0 (0.9) 0.0
(0.8) Net income (loss) (24.5) 4.4 (25.5) 4.1 Diluted earnings per
share (Euros) (2.07) 0.38 (2.15) 0.35 Revenues: At Euros 135.7
million, revenues for the third quarter of 2003 decrease 12%
compared to the third quarter of 2002 and are stable in USD. At
Euros 454.6 million, CGG total revenues at the end of September
decrease 7% in Euros and increase 11% in USD compared to the first
9 months of 2002. Total revenues for Geophysical Services for the
third quarter 2003 are Euros 76.0 million, down 39% in Euros, (-31%
in USD), compared to the third quarter 2002. At the end of
September 2003, total revenues for Geophysical Services are Euros
316.7 million, down 11% in Euros and up 6% in USD compared to the
same period last year. The Land acquisition total revenues for the
third quarter 2003 decreased 53% to Euros 20.6 million, (-47% in
USD), compared to the third quarter 2002. 7 crews were in operation
at the end of September. The Offshore revenues with Euros 26.3
million for the third quarter 2003 was down 48% in Euros and down
41% in USD, compared to the third quarter 2002. Multi-clients after
sales were very low during this quarter. The net book value of the
offshore seismic data library at the end of September is Euros 147
million. The Processing-Reservoir revenues, with Euros 29.1 million
for the third quarter 2003, decreased 4% in Euros and increased 9%
in USD, compared to the third quarter 2002. For the third quarter
2003, Sercel total sales were Euros 63.8 million, up 11 % in Euros
and up 26% in USD, compared to the third quarter 2002. External
sales for the third quarter 2003 were Euros 59.7 million, up 104%
in Euros and up 131% in USD. At the end of September 2003, Sercel
total revenues were Euros 152.0 million, down 24% in Euros compared
to the same period last year (-9% in USD). At the end of September
2003, Sercel external sales were Euros 137.9 million, up 3% in
Euros and 26% in USD. Operating Result before NRI: For the third
quarter 2003, the operating result before NRI is a Euros 0.2
million profit compared to Euros 17.6 million operating profit last
year. This strong decrease in the operating result is exclusively
attributable to the geophysical services and reflects the 2003
competitive environment of the geophysical services market, further
aggravated by a strong $/EUR exchange negative impact. For the
third quarter 2003, the operating result of the Geophysical
Services before NRI is a loss of Euros 12.6 million compared to an
operating profit of Euros 11.2 million for the third quarter 2002.
The very low level of after sales and the very weak land
acquisition market explain this poor operating performance. For the
third quarter 2003, the operating result of Sercel is a profit of
Euros 13.8 million, representing 22% of revenues, compared to an
operating result of Euros 10.8 million for the third quarter 2002.
The increasing international demand in Land acquisition products
supported this strong operational performance. For the first nine
months of 2003, the operating result before NRI is a profit of
Euros 12.1 million, a significant decrease compared to the profit
of Euros 34.5 million at the end of September 2002. This operating
profit does not include a positive contribution of Euros 5.8
million from subsidiaries consolidated under the equity method,
principally Argas, compared to a positive contribution of Euros 3.8
million at the end of September 2002. Segment information Million
of Euros Year to Date Third Quarter 2003 2002 2003 2002 Operating
revenues Services 317.7 357.3 76.5 124.6 Products 152.0 200.5 63.8
57.3 Elimination (15.1) (67.7) (4.6) (28.1) Total 454.6 490.1 135.7
153.8 Operating profit (loss) Services before NRI (13.7) 13.1
(12.6) 11.2 Services after NRI (32.1) 13.1 (31.0) 11.2 Products
30.4 36.1 13.8 10.8 Corporate (8.0) (8.5) (2.7) (3.1) Elimination
4.4 (6.2) 2.7 (1.3) Total after NRI (5.3) 34.5 (17.2) 17.6 Land
acquisition restructuring / NRI: The land acquisition restructuring
program should be completed by late 2003 / early 2004. This plan
anticipates a redundancy of overall 270 personnel as well as the
closure of a number of international representation offices,
corresponding to approximately Euros 30 million of fixed costs
savings on a yearly basis, with full effect in the second half of
2004. A Euros 19 million provision has been booked in the Q3
accounts as Non Recurring Item (NRI), split Euros 10.2 million for
provisions and risks and Euros 8.8 million for depreciation of
assets, of which Euros 1.6 million have been booked as goodwill
depreciation Adjusted EBITDA: The adjusted EBITDA for the third
quarter 2003 is Euros 22.3 million, 16% of the revenues reflecting
in particular the low level of multi-clients sales. The adjusted
EBITDA at the end of September is Euros 122.7 million, 27% of the
revenues. Summary of cash-flows Million of Euros Year to Date Third
Quarter 2003 2002 2003 2002 Cash flow from operations 135.8 132.5
17.7 58.5 Capital expenditures (26.1) (113.4) (7.6) (46.2)
Investment in library (92.0) (99.2) (25.3) (38.8) Adjusted EBITDA
122.7 147.0 22.3 52.1 Net Result: The net group consolidated result
after NRI, for the third quarter is a Euros 25.5 million loss,
compared to the Euros 4.1 million profit of the third quarter 2002.
At the end of September, the net group consolidated result after
NRI is a loss of Euros 24.5 million compared to a profit of Euros
4.4 million at the end of September 2002. Equity and net debt
Million of Euros YTD 2003 End of 2002 Shareholders' equity 395.8
437.5 Net Debt 152.6 201.7 Gearing ratio 38.5% 46.1% Equity stake
in PGS: Further to the approval by a US Court on October 21st 2003
of the PGS financial restructuring program, CGG will own, 868 000
shares, i.e, 4.35% of PGS capital for a cumulated total investment
of approximately USD 19.0 million. Backlog: The backlog as of
November 1st 2003 stands at USD 305 million, an increase of 33%
compared to the USD 230 millions at September 1st. This increase
comes in particular from Sercel with a USD 118 million high record
backlog, and from the offshore acquisition contract order book. 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. 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. -- A French language conference call is scheduled at 3 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 44 208 288 44 59 (access code 29 33
62) required from France only). You will be asked for the name of
the conference "CGG Q3 2003 Results". -- An English language
conference call is scheduled at 4 p.m. (Paris time) - 9:00 am (US
CT) - 10.00 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 2679 US call in (800)
500 0177 Replay Number 1 719 457 0820 / 888 203 1112 You will be
asked for the name of the conference "CGG Q3 2003 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: Compagnie Generale
de Geophysique CONTACT: Christophe Pettenati-Auziere,
+33-1-64-47-36-75, or Christophe Barnini, +33-1-64-47-38-10, or ,
both of Compagnie Generale de Geophysique Web site:
http://www.cgg.com/
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