TGS’ Profit Down
TGS reports net revenues of USD 140 million in Q2 2015, compared to USD 205 million in Q2 2014. Earnings before interest and taxes (EBIT) totaled USD 36 million, corresponding to an EBIT margin of 26%.
Net income for Q2 2015 was USD 24.5 million (18% of net revenues), down from USD 61.3 million in Q2 2014. Quarterly earnings per share (EPS) were USD 0.24 fully diluted (USD 0.24 undiluted), which is down 60% from Q2 2014.
TGS’ backlog amounted to USD 242.4 million at the end of Q2 2015, an increase of 8% from Q2 2014 and 26% higher than last quarter. The increase is mainly due to final seismic permits granted in Mexico in Q2, allowing existing prefunding commitments to be recognized as backlog.
The net cash flow from operations for the quarter, after taxes, before investments, totaled USD 86.0 million compared to USD 66.0 million in Q2 2014. A dividend of USD 98.7 million for the 2014 accounting year was paid on 21 May 2015, while dividend withholding taxes of approximately USD 15 million will be paid during July 2015. As of 30 June 2015, the Company’s total cash holdings amounted to USD 175.9 million compared to USD 256.4 million at 31 December 2014.
TGS implemented a Cost Reduction Program in Q1. A key element of this program was a reduction of more than 10% of TGS’ global workforce effective from April. The company expects annual cost savings of approximately USD 10 million from the Cost Reduction Program. In addition to the reduction in headcount, Management has taken actions to recognize additional operational cost savings and the Company will continue to adapt to the challenging market conditions.
“Demand for seismic data continues to be under pressure and the outlook for improvement in the market remains quite uncertain. Despite this uncertainty, TGS continues to be uniquely positioned within our industry with a strong balance sheet combined with a flexible asset-light business model,” TGS’ CEO Robert Hobbs stated. “Our 2015 revenue guidance remains unchanged.”