PGS in Q1 Profit Warning
Norwegian seismic player, Petroleum Geo-Services (PGS) said it expects revenues for Q1 2017 of approximately $155 million ($203 million in Q1 2016), with an EBITDA of approximately $30 million ($79 million in Q1 2016).
According to PGS, the low EBITDA is primarily driven by the relatively low multi-client investment activity in the quarter.
Total multi-client revenues ended at approximately $80 million in Q1 2017. Multi-client pre-funding revenues constitute about half of this amount, representing well above 100% pre-funding on slightly above $30 million capitalized multi-client cash investment in the quarter. Marine contract revenues ended at approximately $60 million.
The company added that it estimates the order book as of March 31, 2017 to be approximately $340 million, the highest level in two years and a significant increase compared to the $215 million reported as of end Q4 2016, and the $204 million at end Q1 2016. Multi-client represents approximately $200 million. The improved order book reflects an increase in secured pre-funding for scheduled Multi-client projects and an increase of volume and pricing of marine contract work.
“Our Q1 numbers are impacted by the challenging market conditions and low multi-client investment activity. Despite the slow start to the year, I am pleased with the high multi-client pre-funding level achieved in Q1 2017 which illustrates our continued ability to generate solid multi-client projects and our investment discipline in this segment. The order book increase represents a strong positive shift which significantly improves revenue visibility and makes me increasingly confident that we will be able to deliver 2017 in accordance with our plan,” says president & CEO, Jon Erik Reinhardsen.
The company is scheduled to present its Q1 2017 results on May 11, 2017.