CGGVeritas Sees 16% Increase in YOY Revenue
CGGVeritas announced its non-audited second quarter 2011 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All second half 2010 results are reported before restructuring and impairment.
- Group Revenue was $750MM, up 16% year-on-year and 3% sequentially.
- Group Operating Income was $16MM:
- Sercel continued to deliver strong performance with Operating Income at $76MM, a margin of 29%.
- Services Operating Income was a loss of $29MM mainly related to North American seasonality in Land, operational interruptions and continued overcapacity in the marine market.
- Multi-client marine and Processing & Imaging contributions were particularly strong.
- Net Income was negative at $38MM, including one-off $17m refinancing costs.
- Net Free Cash Flow was negative at $7MM this quarter and positive at $58MM for the first half of the year.
- Net Debt to Equity ratio was 40%.
- Debt maturity was extended to 2021 and Term Loan B was fully repaid with the issuance of our $650 million Senior Note.
- As planned in our Performance Program, following their upgrades, the Oceanic Phoenix and Oceanic Endeavour returned to operations. Our ship management partnership with Eidesvik was established and a support vessel charter agreement with Bourbon was signed. The Commander was decommissioned at the end of May.
- BroadSeisTM, our advanced marine solution continued to see growing acceptance, and we further developed our newly established commercial joint ventures.
- Our cost reduction program is progressing well in the context of rising fuel cost and the weakening US dollar.
Backlog as of July 1st sequentially strengthened, up 7% to $1.31 billion.
Post Closing Events
Strategic agreement signed with Spectrum, a Norwegian multi-client company, for the contribution by CGGVeritas of our 2D Multi-client marine library for a consideration in cash and a 25% equity position in Spectrum.
CGGVeritas CEO, Jean-Georges Malcor commented, "During the quarter, Sercel delivered excellent performance and Services, despite the impact of Land seasonality, continued to see the signs of a progressively strengthening second half of the year.
"North American Land activity was seasonally low as we repositioned our crews from Canada and the Arctic to the lower 48 for an expected robust summer campaign. Increasing demand for our marine multi-client data in advance of the announced Gulf of Mexico and Brazil lease sales was confirmed, a promising trend for both future multi-client sales and the progressive balancing of over-capacity in marine.
"Our performance plan is progressing well in a context that remains impacted by rising fuel cost and a weakening US dollar. We continued to manage our balance sheet proactively with the significant extension of debt maturity, and in the first half of the year generated positive net free cash flow.
"Looking forward, we expect Sercel to continue to deliver strong financial performance and, while difficult conditions remain in the marine market, Services should benefit from our performance program and from the increasing demand for multi-client data in the second half of the year and particularly near year-end."
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