CGGVeritas Second Quarter 2012 Results: A Come Back To Growth And Profitability
CGGVeritas (Paris:GA) (NYSE:CGV) announced today its non-audited second quarter 2012 consolidated 1 results. All comparisons are made on a year-on-year basis unless stated otherwise.
- Revenue at $831 million, up 11%
- Strong increase in Operating Income at $85 million, a 10% margin
- Services return to profitability
- Positive Outlook for 2012 confirmed
|Second Quarter 2012 Key Figures|
|In million $||Second Quarter 2012||Second Quarter 2011*|
|Cash Flow from Operations||104||162|
|Free Cash Flow||-129||-7|
|Backlog||1 300||1 310|
CGGVeritas CEO, Jean-Georges Malcor, commented:
“Our Performance Plan continues to bear fruit with the recovery of our marine operations, as illustrated by the very good utilization rate of our fleet since the beginning of the year. Combined with the sustained level of activity in Processing & Imaging, and a more favorable seasonality in Land Acquisition, our marine performance enabled Services to deliver a positive operating income this quarter (typically the weakest quarter in the year), despite the reduced contribution from multi-client sales. Sercel continued to deliver an excellent performance."The commercial visibility is improving: exploration spending is expected to increase by more than 15% this year, and tendering activity in marine acquisition is firming up for the fourth quarter of 2012 and first quarter of 2013. "CGGVeritas remains at the forefront of innovation. We launched in early June the new generation of Sercel streamers, Sentinel ® RD with a reduced diameter. We continue to capitalize on the commercial success of BroadSeis TM and CGGVeritas is returning to the US waters of the Gulf of Mexico with StagSeis TM , a major innovation in marine acquisition and imaging, with its new multi-client survey called IBALT. "Within this context, I am confident in our ability to reach our 2012 objectives.” 1 Effective January 1, 2012, CGGVeritas changed the presentation currency of its consolidated financial statements from the euro to the U.S. dollar to better reflect the profile of an industry with revenues, costs and cash flows primarily generated in U.S. dollars. The first and second quarter 2011 figures shown in this press release have been restated as if the change in the Group presentation currency had been effective since January 1, 2004 (IFRS transition). In the context of our new presentation of cash indicators, first and second quarter 2011 EBITDAs and multi-client Capex figures have been restated. Second Quarter 2012 Results
- Group revenue was $831 million, up 11% year-on-year and up 6% sequentially.
- Group operating income was $85 million, a 10% margin:
- Sercel margin was at 32% driven by sustained demand for land and marine high-resolution surveys.
- Services operating income was positive at $19 million mainly due to our improved operational efficiency in marine and to a more favorable seasonality for our Land activity.
- The contribution from equity investees was at $10 million, mainly related to the good performance of Argas.
- Net income was at $34 million, compared to a loss of $38 million in the second quarter 2011.
- Earnings Before Interest Tax Depreciation and Amortization (EBITDAs) was at $228 million, up 53% year-on-year and up 8% sequentially.
- The operational cash flow was $104 million, down 36% year-on-year, due to opposite changes in working capital during the quarter. The increase in working capital is mainly related to the high level of invoicing in June both at Sercel and Services.
- Total Capex was at $179 million this quarter, industrial capex was at $97 million and multi-client capex reached $82 million as 17% of the fleet was dedicated to multi-client programs.
- After payment of interests and capital expenditure, net free cash flow was negative at $129 million.
- Backlog was at $1.3 billion at the end of June 2012, stable year-on-year, up in Services at $1.130 billion and down at Sercel at $170 million.
- Start of IBALT, our new multi-client GoM survey, using StagSeis the innovative solution for marine acquisition and imaging.
- Signature of a strategic alliance with SMNG, the main Russian geophysical company.
- Group revenue expected to grow 10%-15%.
- 2011-2012 performance plan: $150 million additional operating income target confirmed.
- As planned, 2/3 of original industrial capex spent on H1 (including the upgrade of the Champion vessel).
- H2 capex could potentially be revised up to take advantage of the positive market cycle.
Multi-Client Cash Capex:
- Marine at around $250 million including StagSeis and Land at around $130 million.
- Prefunding confirmed at 80%-85%.
- Positive Free Cash Flow.
|In million $||First Quarter 2012||Second Quarter|
|Group Operating Income||54||85||15|
|Net Debt||1 512||1 600||1 492|
|Net Debt to Equity Ratio||39%||42%||40%|
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