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CGGVeritas (Paris:GA) (NYSE:CGV) announced today its non-audited third quarter 2012 consolidated
1 results. All comparisons are made on a year-on-year basis unless stated otherwise.
Third quarter results
Revenue totaled $855 million, up 7%
Operating income increased by 17% to $114 million, a 13% margin
Services operating income was at $62 million, a 10% margin
Sercel operating income was at $93 million, a 33% margin
Acquisition of Fugro’s Geoscience Division on track
The closing of the acquisition of Fugro’s Geoscience Division is still expected by the end of the year or by early 2013
This acquisition remains currently subject to the approval of anti-trust authorities in the United Kingdom, in Norway, in Turkey and in Australia and to the work’s council consultation
The Rights Issue of 414 million euros launched last September 26 th was successful, having been 195% oversubscribed
Signature of a collaborative relationship agreement with Baker Hughes
CGGVeritas announces today a collaborative relationship agreement with Baker Hughes on the shale plays in order to develop a complete range of services using reservoir models with calibrated seismic data
This collaboration could help oil and gas companies to accurately pinpoint reservoir “sweet spots” and optimize well placement and completion design earlier in the asset lifecycle for more efficient well construction and more productive wells
CGGVeritas CEO, Jean-Georges Malcor, commented:“As expected, quarter after quarter, CGGVeritas continues to strengthen its results, reflecting the improvement in our operational performance as well as the increase in marine prices.The acquisition of Fugro’s Geoscience Division is on track. Our capital increase with preferential subscription rights was favorably received by our shareholders who recognize that this operation will transform CGGVeritas into a fully integrated company in Geology, Geophysics and Reservoir.We are also very pleased by the collaborative relationship agreement with Baker Hughes in the shale plays. This agreement is in line with our strategy of positioning our company on the entire value chain of Geoscience and to fully benefit from this favorable phase of the cycle.For the end of the year, our multi-client activity should benefit from the recent announcement of lease sales in the Gulf of Mexico and Brazil and from the 27th round awards in the North Sea, after two exceptionally weak quarters. In this context, and with a fourth quarter expected to be strong across our activities, we confirm our 2012 objectives.Looking forward, the current buoyant commercial climate bodes well for this favorable cycle continuing for the seismic industry in 2013. ”
1Effective 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, second and third 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, second and third quarter 2011 EBITDAs and multi-client Capex figures have been restatedThird Quarter 2012 Results
Third Quarter 2012 Key Figures
In million $
Cash Flow from Operations
Free Cash Flow
Group revenue was $855 million, up 7% year-on-year and up 3% sequentially.
Group operating income was $114 million, up 17% year-on-year and up 35% sequentially and representing a 13% margin:
Sercel operating income totaled $93 million, which was stable sequentially and its margin stood at 33%.
Services operating income increased significantly to $62 million, mainly due to the increase in marine prices. This represented a 10% margin, the highest since the first quarter of 2009.
The contribution from equity investees was at $13 million, up 25% sequentially. This is mainly due to the strong performance of Argas, particularly the favorable start of the KJO contract, which was originally expected to be operated by Ardiseis.
Net income totaled $48 million, compared to $40 million in the third quarter of 2011.
Earnings Before Interest Tax Depreciation and Amortization (EBITDAs) was at $278 million, up 12% year-on-year and up 22% sequentially.
Cash flow from operations was $171 million, up 51% year-on-year.
Total Capex represented $196 million this quarter, Industrial Capex represented $70 million and Multi-Client Capex reached $126 million with 28% of the fleet being dedicated to multi-client programs. The level of multi-client prefunding was 71% this quarter.
After payment of interest and high capital expenditure especially in our multi-client activity, net free cash flow was negative at $39 million.
Backlog was at $1.280 billion at the end of September 2012, slightly up year-on-year, up in Services at $1.070 billion and down at Sercel at $210 million.