CGG Reports Non-Audited Results for Third Quarter

CGG announced its non-audited third quarter 2013 consolidated results. All comparisons are made on a year-on-year basis with CGG 2012 results before the Fugro Geoscience acquisition.

– Q3 Revenue up 6% and EBIT at $95 million

– Group revenue at $908 million, up 6%

– Lower Equipment sales due to temporary weakness in demand for seismic equipment

– Low land acquisition activity

– Weaker multi-client after-sales after strong Q2

– High multi-client prefunding rate at 79%

– Reported Group EBIT at $73.2 million

– Group EBIT margin at 10.4% before NRFI (8.1% reported)

-Net income of $4 million

– End of September Revenue up 14% and EBIT at $350 million

– Group revenue at $2.810 billion, up 14%

– Revenue down 21% in Equipment, up 28% in Acquisition and up 40% in Geology, Geophysics & Reservoir (GGR)

– Reported Group EBIT at $352.6 million and Group EBIT margin at 12.5%, 26.3% in Equipment, 6.6% in Acquisition and 25.0% in GGR

– Net income of $119 million corresponding to an EPS of $0.64 (€0.49) up 56%

– Backlog at the end of October stood at $1.25 billion with fleet utilized 96% in Q4, and 75% Q1 2014

– 2013 Expectations

– Group revenue expected to be up 15%-17%

– Group EBIT margin expected to be up and between 12%-13% including a 28% EBIT margin for the Equipment Division

– Multi-client capex revised up to $450-$500 million with a prefunding rate expected above 75%

– Industrial capex targeted at $300-$350 million

– Positive free cash flow generation, before Fugro Geoscience transaction negative cash elements

– Improved Return On Capital Employed

CGG CEO, Jean-Georges Malcor, commented:

“After a solid H1, which was better than expected, we are now seeing a tougher H2 due to a temporary weakness in demand for seismic equipment and softer contract marine market conditions. At the end of September, our revenue was up 14% with an EBIT margin of 12.5%. Although our Q4 performance, driven by equipment and multi-client sales, will be typically stronger than Q3, we now expect our full year 2013 revenue to be up 15% to 17%. The 2013 EBIT margin should however increase year-on-year and remain high between 12% and 13%, thanks to good operational performance and cost management.

Looking ahead into 2014, CGG should continue on its path of profitable growth. The successful launch of Sercel’s 508XTsystem, representing a step-change technology in land acquisition technology and the confirmation of tenders for land acquisition mega crews in H2 should enable Equipment division to grow. In Acquisition, the recent award of large marine contracts in Angola and Mexico, as well as an expected solid North Sea season give us confidence into 2014. GGR should continue to increase its level of activity and deliver high profitability thanks notably to its high-end technologies in Geology, Subsurface Imaging, Reservoir Characterization and well prefunded multi-clients programs.”

Press Release, November 07, 2013