CGGVeritas announced that its Board of Directors approved the fourth quarter and full year 2008 consolidated accounts. All comparisons are made on a year-on-year basis unless otherwise stated.
Q4 2008 Financial Performance
Group revenue was up 19% to $1.041 billion. Group operating income reached $199 million, up 6%, a 19% operating margin.
Net income was $164 million, up 69%. Earnings per ADS was $1.19. Expressed in Euros, net income was up 77% to €119 million. Earnings per share (EPS) was €0.86.
Net free cash flow was $293 million.
Operating income includes a nonrecurring charge of $34 million related to unrealized losses on investment in OHM.
Wavefield was consolidated into the accounts as of December 31st following the successful completion of our exchange offer on December 19th.
Group revenue was up 18% to $3.850 billion. Group operating income rose 19% to $800 million. Operating margin reached 21% of revenue.
Net income increased by 47% to $503 million. Per ADS, net earnings reached $3.57. Net income in Euros was €340 million, up 36%, reaching 13% of consolidated revenue. Earnings per share (EPS) was €2.41.
Operating cash flow for the year was $1.310 billion, up 48%. Free cash flow after capital spending, financial charges and before acquisitions was $452 million.
CGGVeritas Chairman & CEO, Robert Brunck commented, "I am very pleased to report that in 2008, despite a more challenging market during the last part of the year, we were able to achieve record performance, meet all our financial objectives, further grow the company mainly through the acquisition of Wavefield and strengthen our position.
"The technological and commercial leadership of Sercel is more and more established. Customers around the world are increasingly selecting our Services highly-advanced technologies, such as: HPVATM and V1TM in Land, our high-end marine acquisition, unique wide-azimuth data library in the Gulf of Mexico and our RTM and CBM software technology for depth processing and imaging.
"We currently expect that E&P spending will be reduced by around 10 to 15% in 2009. Outlook for seismic can be characterized by a softer market with low visibility especially in the second half. We are well prepared to manage these constraints by reducing our cost structure and adjusting our marine capacity.
"Current global economic conditions should not lead us to underestimate underlying oil and gas fundamentals, which support the worldwide longer term need to increase reserve replacement rates and the efficiency of reservoir management. In 2009, while addressing carefully the short term uncertainties, we will preserve the ability to develop long term opportunities through technology leadership, the quality of our products and services and the value of the expertise of our personnel.
Our top priorities are the following:
A rigorous discipline in managing cost, operational capacity and capital spending:
Strengthen technology leadership:
"We enter the year with a solid balance sheet, low financial leverage, long term debt maturity and a flexible and well balanced portfolio of high-end seismic capabilities."
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