Regulatory News: CGGVeritas (Paris:GA) (NYSE:CGV) announced today its non-audited first quarter 2012 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. 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 2011 first quarter figures shown in this press release were restated as if the change in the Group presentation currency was effective since the January 1, 2004 (IFRS transition). The 4 th quarter 2011 figures are presented for information purposes only. They correspond to the conversion into USD of the 2011 accounts provided in Euros as released last February. In the context of our new presentation of cash indicators, 2011 first and fourth quarter EBITDAs and multi-client Capex figures were restated.
|First Quarter 2012 Key Figures|
|First Quarter||First Quarter|
|In million $||2012||2011*|
|Cash Flow from Operations||193||198|
|Free Cash Flow||-7||65|
|Backlog||1 565||1 218|
CGGVeritas CEO, Jean-Georges Malcor commented:“ In the first quarter 2012, Group revenue increased year-on-year as Sercel delivered record sales and Services remained stable. Group results improved despite operating marine contracts this quarter which were awarded during the second half of 2011 at historic low prices. Our performance plan is progressing well and bearing fruit as the marine modernization plan reached completion in early April with the Oceanic Champion returning to operations and our vessel production rate was high at 92% this quarter. Our backlog is significantly increasing, confirming the recovery in demand for the high end seismic equipment and services market, with marine prices strengthening year on year and good visibility for our land crews across the year. With our strengthening operational performance and reinforced technical differentiation, CGGVeritas should continue its journey of growth in 2012 while benefiting from both the excellent financial performance of Sercel and an expected significant improvement of Services, especially in the second half of the year.” First Quarter 2012 Results
- Group revenue was $787 million, up 8% year-on-year mainly driven by record high Sercel sales.
- Group operating income was $54 million. Group margin was 7%:
- Sercel margin was high at 33% driven by demand for land and marine high resolution surveys.
- Services margin was negative at 1% mainly due to the continued very low prices in the marine contracts executed this quarter.
- Net income was a loss of $3 million.
- Operational cash flow was $193 million, stable year-on-year.
- After financial costs paid and capital expenditure, including $65 million for the performance upgrade of the Oceanic Champion, free cash flow was negative at $7 million.
- The acquisition of Global Research Company (GRC) on the 18th of January strengthened Sercel’s diversification into high resolution downhole gauges and sensors.
- Backlog strengthened to $1.565 billion at the end of March 2012, up 28% year-on-year
|First Quarter 2012 key figures|
|In million $||Fourth Quarter 2011*||First Quarter|
|Group Operating Income||71||54||23|
|Net Debt||1 411||1 512||1 444|
|Net Debt to Equity Ratio||37%||39%||38%|
RevenueGroup revenue was up 8% year-on-year and down 13% sequentially compared to the fourth quarter which was particularly strong. Services revenue was stable year-on-year, while Sercel reached a quarterly record.
|In millions $||Fourth Quarter||First Quarter|
SercelFirst quarter revenue was up 26% year-on-year and up 7% sequentially. This particularly high level of sales was mainly related to the first land equipment deliveries for high channel count surveys in the Middle East and also to sustained marine streamer sales. Internal sales, which are generally strong in the first quarter, represented 27% of Sercel total revenue as Sentinel and Nautilus were delivered to the Oceanic Champion. Services Revenue was stable year-on-year and down 16% sequentially due to the traditional seasonality of multi-client sales in the fourth quarter.
- Marine contract revenue was down 5% year-on-year and sequentially down 23% mainly related to the higher rate of 23% of our fleet dedicated to multi-client programs. The vessel availability rate1 grew to 84% and the production rate2 to 92% as a result of our strengthening operational performance. The Oceanic Champion, the last of our vessel planned for performance upgrade, left the shipyard on the 31st of March. She is now operating in the North Sea. Our marine performance plan has reached completion with the Vanquish, Oceanic Endeavour, Oceanic Phoenix and Oceanic Champion vessels all returning to operations over the last 18 months with an enhanced configuration of 12 Sentinel solid streamers and Nautilus navigation systems. The Amadeus vessel was effectively transferred to our Vietnamese Joint-Venture on the 27th of March.
- Land contract revenue was down 23% compared to an exceptionally strong first quarter 2011. Sequentially, it is up 91%. Our winter campaign in North America, where we operated 12 crews, was successful, our operations in Saudi Arabia were sustained and our crews are beginning to remobilize in North Africa in a still uncertain geopolitical context. Worldwide demand for shallow water and OBC operations continue to be strong.
- Processing, Imaging & Reservoir revenue was up 6% year-on-year and down 15% sequentially compared to the very strong fourth quarter in 2011. Demand for high-end processing remains at high levels especially in our major centers.
- Multi-client revenue was up 52% year-on-year mainly related to strong after-sales in the Gulf of Mexico and the North Sea. Capex was $76 million. The depreciation rate averaged 71%, with 92% in land and 65% in marine, a high rate due to geographical sales mix this quarter. Net Book Value at the end of March 2012 was $536 million compared to $527 million at the end of December 2011.
- Multi-client marine revenue was up 95% year-on-year. Capex was $52 million and was focused on offshore Brazil. Prefunding revenue was low at $22 million, a rate of 42%, as some prefunding was postponed to the second quarter. After-sales were particularly strong for a first quarter and reached $65 million with high levels of client interest for our North Sea and Gulf of Mexico data, ahead of lease sales.
- Multi-client land revenue was down 9% year-on-year. Capex was $24 million dedicated to the pursuit of our Marcellus and Alaska programs. Prefunding revenue was $21 million, a rate of 87%. After-sales were $6 million.
|Fourth Quarter||First Quarter|
|In millions $||2011*||2012||2011*|
Group Operating Income was $54 million. Operating margin was 7%.
|Fourth Quarter||First Quarter|
|Group Operating Income||71||54||23|
|Sercel Operating Income||98||116||95|
|Services Operating Income||11||-8||-26|
Financial ChargesFinancial charges were $42 million:
- Cost of debt was $39 million, including $7 million paid during the quarter
- Other financial items were $3 million including the unfavorable impact of currency translation
- Industrial Capex was $126 million, up 59% year-on-year
- Multi-client Capex was $76 million up 85% year-on-year with a 56% prefunding rate
|In million $||First Quarter|
Free Cash FlowAfter financial interests paid during the quarter and Capex, free cash flow was negative at $7 million compared to $65 million in the first quarter of 2011. Balance Sheet Group gross debt was $1.975 billion, at the end of March 2012. Available cash was $462 million after the $50 million cash out related to the acquisition of GRC. Group net debt was $1.512 billion, up 7% from $1.411 billion at the end of 2011. Net debt to equity ratio, at the end of March 2012, was 39% compared to 37% at the end of December 2011. First Quarter 2012 Comparisons with First Quarter 2011
|Consolidated Income Statement||Fourth Quarter||First Quarter|
|Exchange rate euro/dollar||1.364||1.318||1.363|
|Corporate and Elimination||-37.3||-54.0||-45.6|
|Net Financial Costs||-27.6||-41.9||-59.1|
|Deferred Tax on Currency Translation||-3.2||2.8||5.2|
|Income from Equity Investments||6.9||3.6||2.0|
|Earnings per share (€)||0.08||-0.04||-0.20|
|Earnings per ADS ($)||0.11||-0.06||-0.27|
- Jean-Georges MALCOR, CEO, will comment on the first quarter results today May 10, during the shareholders meeting at 9:30 AM – at the Auditorium Etoile Saint Honoré – 21, 25 rue Balzac - Paris 8ème.
- An English language conference call is scheduled today at 3:00 PM (Paris time) – 2:00 PM (London time) – 8:00 AM (US CT) – 9:00 AM (US ET).
|- US Toll-Free||1-877-317-6789|
|- International call-in||1-412-317-6789|
|- Replay||1-877-344-7529 & 1-412-317-0088 –|
|Conference # 10009283|
- Copies of the presentation are posted on the Company website www.cggveritas.com and can be downloaded.
- The conference call will be broadcast live on the CGGVeritas website www.cggveritas.com and a replay will be available for two weeks thereafter.
|UNAUDITED INTERIM CONSOLIDATED STATEMENT OF OPERATIONS|
|Three months ended March 31,|
|Amounts in millions of U.S.$, except per share data or unless indicated|
|Other income from ordinary activities||1.2||0.9|
|Total income from ordinary activities||787.8||729.5|
|Cost of operations||(649.2)||(632.9)|
|Research and development expenses, net||(21.8)||(20.1)|
|Marketing and selling expenses||(22.0)||(18.5)|
|General and administrative expenses||(47.1)||(47.0)|
|Other revenues (expenses), net||6.1||12.1|
|Expenses related to financial debt||(39.5)||(44.9)|
|Income provided by cash and cash equivalents||0.9||0.5|
|Cost of financial debt, net||(38.6)||(44.4)|
|Other financial income (loss)||(3.3)||(14.7)|
|Income (loss) of consolidated companies before income taxes||11.9||(36.0)|
|Deferred taxes on currency translation||2.8||5.2|
|Other income taxes||(21.8)||(8.1)|
|Total income taxes||(19.0)||(2.9)|
|Net income (loss) from consolidated companies||(7.1)||(38.9)|
|Share of income (loss) in companies accounted for under equity method||3.6||2.0|
|Net income (loss)||(3.5)||(36.9)|
|Attributable to :|
|Owners of CGGVeritas||$||(8.7)||(40.5)|
|Owners of CGGVeritas (1)||€||(6.6)||(29.7)|
|Weighted average number of shares outstanding||151,864,165||151,561,798|
|Dilutive potential shares from stock-options (2)||-||-|
|Dilutive potential shares from performance share plan (2)||-||-|
|Dilutive potential shares from convertible bonds (2)||-||-|
|Dilutive weighted average number of shares outstanding adjusted when dilutive||151,864,165||151,561,798|
|Net income (loss) per share|
|ANALYSIS BY OPERATING SEGMENTS|
|Three months ended March 31, 2012|
|(in millions of US$)||Services||Equipment||and||Total|
|Revenues from unaffiliated customers||531.1||255.5||-||786.6|
|Other income from ordinary activities||-||-||-||-|
|Total income from ordinary activities||531.1||347.8||(92.3)||786.6|
|Operating income (loss)||(7.7)||115.5||(54.0)||53.8|
|UNAUDITED INTERIM CONSOLIDATED BALANCE SHEET|
|March 31, 2012||December 31, 2011|
|Amounts in millions of U.S.$, unless indicated|
|Cash and cash equivalents||462.3||531.4|
|Trade accounts and notes receivable, net||848.1||876.0|
|Inventories and work-in-progress, net||386.5||361.5|
|Income tax assets||115.2||119.4|
|Other current assets, net||198.8||157.0|
|Assets held for sale, net||23.4||64.5|
|Total current assets||2,034.3||2,109.8|
|Deferred tax assets||186.8||188.8|
|Investments and other financial assets, net||52.0||24.7|
|Investments in companies under equity method||158.8||131.7|
|Property, plant and equipment, net||1,217.3||1,183.2|
|Intangible assets, net||914,6||865,1|
|Total non-current assets||5,245.6||5,081.7|
|LIABILITIES AND EQUITY|
|Current portion of financial debt||81.5||64.5|
|Trade accounts and notes payable||475.5||386.4|
|Accrued payroll costs||163.7||185.7|
|Income taxes liability payable||103.0||159.7|
|Advance billings to customers||45.2||51.0|
|Provisions – current portion||36.8||34.6|
|Other current liabilities||288.5||272.3|
|Total current liabilities||1,200.2||1,160.2|
|Deferred tax liabilities||104.3||110.8|
|Provisions – non-current portion||106.0||106.7|
|Other non-current liabilities||51.9||49.8|
|Total non-current liabilities||2,149.3||2,138.9|
|Common stock 252,090,578 shares authorized and 151,871,998 shares with a €0.40 nominal value issued and outstanding at March 31, 2012 and 151,861,932 at December 31, 2011||79.8||79.8|
|Additional paid-in capital||2,669.5||2,669.3|
|Net income (loss) for the period attributable to the owners of CGGVeritas||(8.7)||(28.2)|
|Cumulative income and expense recognized directly in equity||(6.5)||(11.5)|
|Cumulative translation adjustment||7.1||(27.6)|
|Equity attributable to owners of CGGVeritas SA (1)||3,838.1||3,805.3|
|TOTAL LIABILITIES AND EQUITY||7,279.9||7,191.5|
|(1)||Effective January 1, 2012, we changed the presentation currency of our consolidated financial statements from the euro to the U.S. dollar to better reflect the profile of our revenues, costs and cash-flows, which are primarily generated in U.S. dollars, and hence, to better present the financial performance of the Group. As a change in presentation currency is a change of accounting policy, all comparative financial information has been restated into U.S. dollars.|
|The currency translation adjustment was set to nil as of January 1, 2004 on transition to IFRS and has been re-presented on the basis that the Group has reported in U.S dollars since that date.|
|The functional currency of the parent company remains the euro. The currency translation adjustment resulting from the parent company is presented in other reserves.|
|Historical consolidated financial statements as of Dec.31, 2011 in euros||Historical consolidated financial statements of Dec.31, 2011 converted into dollar U.S (a)||Restatements (b)||Restated consolidated financial statements as of Dec.31, 2011 to U.S dollar|
|Common stock, additional paid-in capital, retained earnings and other||2,883.1||3,730.5||+102.4||3,832.9|
|Cumulative translation adjustment||55.8||72.2||(99.8)||(27.6)|
|Equity attributable to owners of CGGVeritas||2,938.9||3,802.7||+2.6||3,805.3|