Seismic Firm TGS to Cut 10th of Workforce, Slashes Guidance
OSLO, April 13 (Reuters) – Norwegian seismic oil and gas explorer TGS cut its full-year revenue guidance on Monday and said it would lay off a tenth of its workforce as energy companies slash spending after a halving in crude oil prices.
TGS, which scans the rock beneath the seas for oil and gas deposits, said its market had weakened and the low crude price could mean further worsening as some energy firms have still not yet finalised their 2015 spending plans.
"Demand for seismic data has significantly deteriorated over the first three months of 2015 and the outlook for improvement in the market remains quite uncertain," Oslo-based TGS said in a statement.
TGS now sees its full-year revenue at around $630 million, below its previous guidance for $750 million and down by almost a third from last year's $915 million. In the first quarter, it sees revenue down 23 percent at $172 million.
It did not given an operating profit target but said the figure would be negatively affected by lower revenue, partly offset by its cost reduction plans.
The firm said it would cut 10 percent of its workforce in April and expects to reduce costs by $10 million through various measures. The layoffs will, however, result in a $4 million one-off cost to be booked in the second quarter.
The firm said its cash flow remained solid and it plans to move to a quarterly dividend payment from the first quarter of 2016, from its current practice of paying annual dividends.
It will release first-quarter results on April 23.
(Reporting by Balazs Koranyi; Editing by David Holmes)
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