CGG Announces Third Quarter 2011 Results
Strengthening Results in Q3
Early Impact of our Performance Plan
Revenue up 21%
Operating Income at $98m, a 12% margin
Net Income of $41m
PARIS, France – November 9, 2011 – CGGVeritas (ISIN: 0000120164 – NYSE: CGV) announced today its non-audited third quarter 2011 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise.
Strengthening Financial Results
- Group Revenue was $797 million, up 21% year-on-year and 6% sequentially.
- Group Operating Income was $98 million, a 12% margin.
- Sercel delivered excellent results with Operating Income at $87m, a 32% margin.
- Services strengthened significantly with Operating Income at $53m, a 9% margin, mainly driven by strong Marine performance in the continued low priced environment.
- Net Income was $41 million compared to a loss of $33 million in the third quarter 2010.
Group Operating Cash Flow was $119 million up 45% year-on-year and $486 million for the first nine months of the year, up 54%.
- Net Free Cash Flow was negative at $66 million for the quarter and negative at $8 million for the first nine months of the year compared to a negative Net Free Cash Flow of $213m for the first nine months of 2010.
- Net Debt to Equity ratio was stable at 41% compared to the end of 2010.
Positive Impacts of Performance Plan
- Strong vessel utilization rates with vessel availability at 91% and vessel production at 93%.
- Vessel upgrade plan on schedule:
- The new X-BOW Oceanic Sirius, designed for 20 streamers, was delivered on October 3rd, 2011.
- The upgraded Oceanic Phoenix and Endeavour were back in operations. The Endeavor completed the first BroadSeisTM wide-azimuth project ahead of schedule.
- The Champion, the last of our vessels targeted for the performance program was delivered to the shipyard for major upgrade.
- The commercial success of BroadSeisTM was confirmed with more than 10 surveys acquired since the beginning of the year, including the first BroadSeisTM wide-azimuth.
- The strategic agreement with Spectrum was finalized. The disposal of our 2D marine library generated a capital gain of $19 million this quarter and CGGVeritas now owns a 25% stake in the company.
Backlog at the end of the quarter was $1.24 billion
Third Quarter 2011 Key figures
|Second Quarter||Third Quarter|
|In million $||2011||2011||2010|
Group Operating Income
|Net Debt to Equity Ratio||40%||41%||41%|
CGGVeritas CEO, Jean-Georges Malcor Commented:
“We are pleased to report that our results strengthened this quarter. Sercel continued to deliver superior performance and Services benefited from the early impact of our performance plan including strong fleet utilization rates, the growing success of BroadSeis and the continued development of our partnerships. We maintain our focus on performance improvements, cost reduction, and technological and commercial differentiation.
Looking forward, in the longer term and within the context of current global economic uncertainties, strong underlying oil and gas fundamentals are expected to translate to continued high levels of seismic demand. In the short term, while land mobilization ahead of an expected strong winter season and marine seasonal transits should moderate contract activity, planned lease sales should drive strong multi-client sales in the fourth quarter, especially near year-end. Based on this and an anticipated strong fourth quarter for Sercel, we remain confident to achieve our 2011 objectives.
In 2012, we will continue to pursue our performance plan in a seismic market which is expected to further strengthen for high-end technologies and solutions. Specifically, we expect demand for seismic equipment to remain strong, activity to build globally in key basins and marine overcapacity to progressively be absorbed.”
CGGVeritas (www.cggveritas.com) is a leading international pure-play geophysical company delivering a wide range of technologies, services and equipment through Sercel, to its broad base of customers mainly throughout the global oil and gas industry. CGGVeritas is listed on the Euronext Paris SA (ISIN: 0000120164) and the New York Stock Exchange (in the form of American Depositary Shares. NYSE: CGV).
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