CGGVeritas Posts 1st Quarter 2009 Results
CGGVeritas announced its non-audited first quarter 2009 consolidated accounts. All comparisons are made on a year-on-year basis unless otherwise stated.
A solid quarter despite weakening demand
- Group revenue including Wavefield was relatively stable at $851m
- Group operating margin: 15%
- Net income margin of: 8%
- Backlog was $1.4 billion as of May 1, 2009 down 25% sequentially, as a result of reduced market demand and clients postponing spending decisions
Accelerating adjustments to address 2009 market conditions
- Rigorous cost reduction programs activated across the organization
- Plan to remove three 3D vessels and one 2D vessel from the market in 2009
- Disciplined capital spending to focus on our priority for healthy net free cash flow
- Maintained R&D spending levels and increased focus on advanced technology
CGGVeritas Chairman & CEO, Robert Brunck commented, "Based on our discipline, strengthened marine position and market leadership we achieved solid performance in the first quarter despite deteriorating market conditions. During the quarter Sercel continued to deliver industry leading performance and Services, despite significant reductions in global multi-client spending, was resilient with strong land and marine performance as well as the continued strengthening of our advanced imaging.
"Looking forward we expect the typical second quarter seasonality. Since visibility remains particularly low for the rest of the year, we are implementing cost savings and adjusting capacity to strengthen our ability to deliver optimal performance and focus on our priority of a healthy net free cash flow in 2009.
"Longer term, I am confident in our outlook for the industry and believe that CGGVeritas is well positioned to continue to strengthen its leadership."
Q1 2009 Financial Results
Group Revenue remained nearly flat, down 2% in $ and up 11% in €. Sercel sales decreased as expected and multi-client after sales were particularly low. Contract marine performed well with high utilization rates and the addition of Wavefield to our fleet.
Revenue was down 29% in $ and 18% in €. Internal sales, typical to the first quarter, were high at 20%. Land equipment sales remained stable at high levels and marine sales were low this quarter.
Revenue was up 7% in $ and 21% in €. Growth was supported by the addition of Wavefield, high vessel utilization and strong processing performance. Global multi-client sales were low, with Gulf of Mexico wide-azimuth prefunding remaining high at 95%.
- Marine contract revenue growth was strong, up 57% in $ and up 78% in €. Over the quarter the fleet availability rate was 93% and the production rate was 89%. 82% of the high-end 3D fleet operated on contract and the Wavefield Voyager joined our fleet in late January.
- Land contract revenue was down 14% in $ and 3% in €. We operated 17 crews worldwide, including Argas crews in Saudi Arabia. During the quarter work began on our industry first ultra high channel count survey in Qatar, winter crews were active in Canada and Alaska and we won a multi-year acquisition survey in Saudi Arabia.
- Processing & imaging revenue was up 4% in $ and up 18% in € as demand for our high-end depth imaging technologies, such as CBM and RTM remained high.
- Multi-client revenue was down 48% in $ and 41% in €. The amortization rate averaged 65%, with 78% in land and 62% in marine, a trend expected to continue through 2009.
Multi-client marine revenue was down 41% in $ and 32% in €. Capex was $74 million (€57 million) as 2 vessels were active, one in the Gulf of Mexico completing the wide-azimuth Garden Banks survey and the other in Brazil where we initiated an extension program of our Santos cluster survey around the Tupi discovery. Prefunding was $55 million (€42 million) with a rate of 74%. After-sales were low worldwide at $15 million (€11 million).
Multi-client land revenue was down 69% in $ and 65% in €. Capex eased as planned to $17 million (€13 million). Prefunding was $5 million (€3 million) with a rate of 27% as crews mobilized for new programs. After-sales were $8 million (€6 million).
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