This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

CGGVeritas Second Quarter 2012 Results: A Come Back To Growth And Profitability

Regulatory News:

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*

Revenue 831 751
EBITDAs 228 149
Operating Income 85 15
Net Income 34 -38
Cash Flow from Operations 104 162
Free Cash Flow -129 -7
Backlog 1 300 1 310

*Restated figures

 

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.

Post Closing Events

  • 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.

Positive Outlook for 2012 confirmed

  • Group revenue expected to grow 10%-15%.
  • 2011-2012 performance plan: $150 million additional operating income target confirmed.
  • Industrial Capex:
    • 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.

Second Quarter 2012 Financial Results

Second Quarter 2012 key figures

In million $   First Quarter

2012

  Second Quarter
    2012   2011*
Group Revenue   787   831   751
Sercel   348   285   266
Services   531   599   533
Group Operating Income   54   85   15
Margin   7%   10%   2%
Sercel   116   92   76
Margin   33%   32%   28%
Services   -8   19   -29
Margin   -1%   3%   -5%
Net Income   -3   34   -38
Margin   0%   4%   -5%
Net Debt   1 512   1 600   1 492
Net Debt to Equity Ratio   39%   42%   40%

*Restated figures

1 of 14

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,018.91 -20.58 -0.12%
S&P 500 1,990.31 -2.06 -0.10%
NASDAQ 4,541.08 +8.9760 0.20%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs