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Strong Improvement In CGGVeritas Third Quarter 2012 Results

Stocks in this article: CGV GA


Total revenue rose by 3% year-on-year and was stable sequentially. External revenue increased by 8%. Total equipment sales were well distributed between the Americas, Europe, CIS, China and Asia Pacific. 47% of total sales were dedicated to marine equipment driven by the delivery of a large number of Sentinel ® solid streamer sections while land equipment sales remained at a high level. As of October 1 st, Sercel backlog was down following strong marine sales during the month of September. Internal sales totaled $62 million and represented 22% of total revenue.


Revenue was up 7% year-on-year and up 6% sequentially. This growth in revenue is mainly due to a strong operational performance, an increase in marine prices and a sustained level of activity in land and processing.

  • Marine contract revenue was down 12% year-on-year and down 11% sequentially due to a larger share of our fleet being dedicated to our multi-client activity. This quarter was characterized by the positive impact of price increases and by the continued improvement in our marine operating performance with our vessel production rate 2 above or equal to 90% for the third consecutive quarter. During the quarter, four 3D vessels were operating in the North Sea on BroadSeis TM projects. Two vessels were operating in West Africa, four in Asia including one in the China Sea for a BroadSeis TM acquisition program. In America, the Alize vessel continued with its program in the Mexican waters of the Gulf of Mexico and one vessel was operating off French Guyana.Four vessels were dedicated to multi-client activities this quarter. The Viking ended its acquisition program in Brazil. The Oceanic Vega and Sirius began acquiring the first multi-client program deploying StagSeis TM, the new CGGVeritas marine acquisition solution offering full azimuth coverage and long-offsets for deep subsalt imaging, in the Mexican waters of the Gulf of Mexico. The Oceanic Endeavour completed a multi-client survey off Angola.
  • Land contract revenue was up 102% year-on-year and 23% sequentially.This quarter, eleven crews operated in North America including four crews operating on multi-client programs and thirteen in the rest of the world. Activity was sustained in Alaska and in the Lower 48. We continued with our strategy to focus on high-end land activity by leaving South America where we terminated our activities in Columbia. Our operations in North Africa have started-up in Tunisia and Algeria. In the Middle-East, our land and Ocean Bottom-Cable (OBC) operations maintained high productivity and we were awarded a contract for an acquisition program between Kuwait and Saudi Arabia (‘the KJO contract’). Originally expected to be executed by Ardiseis, a majority-owned subsidiary, this contract is finally operated by Argas, the corresponding operating income - $3 million this quarter – being then recorded within the income of companies accounted for under equity method.
  • Processing, Imaging & Reservoir revenue was up 9% year-on-year and 9% sequentially. Demand for high-end processing is increasing, supported by high-resolution surveys and by the growth of BroadSeis TM surveys. The BroadSeis TM pricing premium is shared between marine and processing. This high level of activity in Processing, Imaging & Reservoir indicates our recent strategic decision to acquire of Fugro’s Geoscience Division.
  • Multi-client revenue was almost stable year-on-year and up 35% sequentially. Capex was $126 million with a prefunding rate of 71%, despite some clients postponing formal commitments to the next quarter. With a depreciation rate averaging 80%, this quarter, the Net Book Value at the end of September 2012 totaled $613 million compared to $560 million at the end of June 2012.
    • Marine multi-client revenue was at $52 million, down 37% year-on-year. Prefunding revenue was $33 million and after-sales were at $20 million. Capex was $87 million and was concentrated on Brazil, Angola and the Gulf of Mexico where we started our IBALT multi-client program with our new StagSeis TM technology. With a depreciation rate at 73% this quarter, the Net Book Value at the end of September 2012 totaled at $476 million.
    • Land multi-client revenue significantly increased to $64 million, up 77% year-on-year. Prefunding revenue was at $57 million and after-sales were at $8 million. Capex was $39 million dedicated with the continuation of our Marcellus program where we registered a very strong operational performance. With a depreciation rate at 85%, the Net Book Value at the end of September 2012 totaled at $137 million.

2 - The vessel production rate , a metric measuring the effective utilization of the vessels once available; this metric is related to the entire fleet, and corresponds to the available time reduced by the operational downtime, all then divided by available time.

Group EBITDAs was $278 million, up 12% year-on-year and up 22% sequentially with a 32% margin.

  Second Quarter   Third Quarter
In million $   2012   2012   2011*
Group EBITDAs   228   278   248
Margin   27%   32%   31%
Sercel EBITDAs   103   105   100
Margin   36%   37%   36%
Services EBITDAs   150   210   187
Margin   25%   33%   32%

*Restated figures

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