CGGVeritas has announced its third quarter 2008 unaudited financial results. All comparisons are made on a year-on-year basis with third quarter 2007 figures unless otherwise stated.
During the third quarter of 2008 CGGVeritas delivered its strongest quarter on record:
CGGVeritas Chairman & CEO, Robert Brunck commented, "I am very pleased to report record operational and financial performance during the quarter confirming our previously communicated strong second half of 2008. Looking forward, based on very high deliveries of land equipment in Sercel and strengthening multi-client sales in the fourth quarter, I confirm our confidence in achieving our 2008 objectives.
"Despite the current instability of the global financial markets and uncertainties related to an economic slowdown, oil supply continues to be particularly challenging for our customers as reserve replacement rates remain low and decline rates are increasingly high. For this reason, through lowering the risks associated with finding and producing reserves, high-end differentiated seismic provides enhanced value and productivity to our clients.
"With our solid financial position including long term debt maturity, industrial strength and expertise, along with our record backlog of near $2 billion, I am confident in our capacity to deliver robust performance and strength in the market."
Third Quarter 2008 Performance and Highlights
Group Revenue was $1,062 million (€692 million), compared to $829 million (€607 million). The 28% growth in $ was driven by Sercel sales, marine performance, and multi-client sales.
Group Operating Income was $265 million (€173 million), up 69% in $ and up 51% in €, with a 25% operating margin, compared to $157 million (€115 million) and a 19% margin last year.
Group EBITDAs was $467 million (€304 million) up 27% in $ and up 12% in € compared to $369 million (€271 million) last year. EBITDAs margin was 44% this quarter.
Group Net Income was $162 million (€105 million), up 73% in $ and up 53% in € compared to $94 million (€69 million), resulting in earnings of $1.14 per ADS and €0.74 per ordinary share.
The Effective Tax Rate, not including deferred tax on currency translation, was 30%.
Net Free Cash Flow was $65 million (€42 million) and Group Net Debt decreased over the quarter to $1.57 billion (€1.1 billion), corresponding to a 42% net debt / equity gearing ratio.
Industrial Capex was $52 million (€34 million) while multi-client Capex was $146 million (€95 million) as the acquisition of our Garden Banks wide-azimuth (WAZ) in the Gulf of Mexico (GoM) continued to progress well.
Multi-client prefunding was 102%.
The Net Book Value of the multi-client library was stable compared to last quarter and closed at $776 million (€542 million) distributed with $579 million (€405 million) for our marine library and $197million (€138 million) for our land library. The multi-client amortization rate was 54%.
Third Quarter 2008 Business Review
Total Revenue for Sercel was $314 million (€204 million) and external revenue was $300 million (€196 million), up 29% in $ and 15% in €. Internal sales accounted for 4% of total sales. Growing requirement for high resolution high productivity seismic drove Sercel revenue, particularly in land.
Operating Income was $103 million (€67 million), with a 33% operating margin, compared to $99 million (€72 million) and a 34% margin a year ago.
EBITDAs was $112 million (€73 million), with a 36% EBITDAs margin, compared to $106 million (€78 million) and a 36% margin last year.
Revenue for Services was $762 million (€496 million), up 28% in $ and up 14% in € mainly supported by strong growth in marine contract.
Operating Income was $173 million (€113 million), with a 23% operating margin, compared to $98 million (€72 million) and a 17% margin a year ago. Strengthening multi-client sales, especially our WAZ projects and high vessel utilization rates were the main drivers of third quarter performance.
EBITDAs was $367 million (€239 million), a 48% EBITDAs margin compared to $300 million (€220 million) a 50% margin last year.
Multi-client marine revenue was $169 million (€110 million) up 9% in $ and down 4% in €. Marine multi-client Capex reached $118 million (€77 million) as 4 vessels were shooting in the GoM, Brazil and the North Sea in our core areas. Prefunding for marine multi-client was $125 million (€81 million) with a prefunding rate of 106% driven by sales of our leading WAZ programs. After-sales revenue was $44 million (€28 million).
Cash and Balance Sheet
Cash generated by operations increased 21% sequentially to $298 million (€194 million).
Group net free cash flow for the quarter was $65 million (€42 million) and at the end of September 2008, the net debt decreased to $1,572 million (€1,099 million). The net debt to equity ratio was 42%.
The gross debt was $2,026 million (€1,416 million). The main components of the debt are as follows:
Year to Date 2008 Performance and Highlights
Group Revenue was $2,809 million (€1,836 million), up 18% in $ and up 4% in € compared to $2,375 million (€1,771 million) a year ago. Growth was driven by sustained sales of Sercel equipment and a high level of land and marine contract activity in Services.
Group Operating Income was $600 million (€392 million), up 25% in $ and up 10% in €, with a 21% operating margin, compared to $481 million (€359 million) and a 20% margin last year.
Group EBITDAs was $1,150 million (€751 million) compared to $992 million (€739 million), EBITDAs margin was 41%.
Group Net Income was $339 million (€221 million) up 38% compared to $245 million (€182 million) last year, resulting in an EPS of €1.55 per ordinary share and $2.38 per ADS.
The Effective Tax Rate, not including deferred tax on currency translation, was 33%.
Industrial Capex was $189 million (€123 million) while multi-client Capex was $434 million (€283 million).
Prefunding rate was 82% and the amortization rate at the end of September was 51%.
Looking forward, we expect a stronger second half of the year. This is driven by very high levels of confirmed land deliveries in Sercel and the typical strengthening of multi-client sales ahead of lease rounds. Based on this, we confirm our 2008 objectives including a reduction of our net debt to equity ratio to near 35% compared to 46% at the end of 2007.
Our backlog of near $1.9 billion a 15% increase year over year is at a record level and provides us with good visibility well into 2009.
Within the context of the current oil supply challenges and the global financial market conditions, CGGVeritas with its high-end seismic equipment and services and its solid financial position is well positioned for the future.
Most Popular Articles
From the Career Center
Jobs that may interest you