TGS Revenues Rise, Profit Drops
TGS has confirmed net revenues of USD 298 million in Q4 2014, up 10% from USD 271 million in Q4 2013 and representing a record high for the Company. TGS achieved its 2014 guided revenues with full year net revenues of USD 915 million, up 4% from USD 883 million in 2013.
However, the net income for Q4 2014 was USD 32.0 million, down from USD 84.1 million in Q4 2013. Quarterly earnings per share (EPS) were USD 0.31 fully diluted, which is down 61% from Q4 2013.
For the full year 2014 TGS recorded a net income of USD 216 million, a drop from USD 269 million same time last year.
Reported EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) for the quarter ended 31 December 2014 was USD 248.9 million, which corresponds to 84% of net revenues, up 7%from USD 232.7 million in Q4 2013. Operating profit (EBIT) for the quarter amounts to USD 47.2 million, which is down from USD 120.3 million in Q4 2013. Adjusted for the impairment costs related to the closure of the Reservoir Solutions business and the re-assessment of the fair value of non-current assets, operating profit was USD 111 million (37% of net revenues)
The Company recorded a currency exchange loss of USD 12.0 million in Q4 2014, which is mainly due to unrealized losses related to translating local currency bank accounts into USD.
Near-term uncertainty in exploration spending has increased further with Brent oil price dropping 55% during the last six months. It is anticipated that this drop will negatively impact seismic spending, as energy companies continue their efforts to reduce capital expenditures and become more selective when prioritizing investments such as seismic programs.
Despite these near-term market challenges, TGS believes the long-term future of its business,and particularly the Company’s focused asset light multi-client model, is strong.
“We are very pleased to announce a record fourth quarter and end of year 2014, which helped us to reach our annual guidance despite challenging market conditions. Q4 was marked by continued strong late sales from our high-quality data library and we set a new record for late sales in the quarter. For 2015, we expect continued downward pressure on exploration spending based on lower oil prices. TGS is entering into 2015 with a record high order backlog and will continue to capitalize on the asset-light business model and strong balance sheet,” TGS’ CEO Robert Hobbs stated.
For 2015, TGS’ guidance is as follows:
– TGS expects multi-client investments of approximately USD 420 million and additional Capex of USD 15 million;
– The Companytargets revenues of approximately USD 750 million;
– TGS targets an EBIT of approximatelyUSD260 million;
– The Board will propose to the AGM in May a dividend of NOK 8.5 per share.
TGS’ backlog amounted to USD 293.1 million at the end of Q4 2014, an increase of 4% from Q4 2013 and 13% higher than last quarter. The increase from last quarter is mainly due to signed customer commitments for several onshore seismic projects in North America in Q4.