CGGVeritas Records 2Q Results in Line with Expectations
CGGVeritas has announced its non-audited second quarter 2009 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All results are reported after restructuring charges unless stated otherwise.
Results in line with expectations
- Group revenue was $779m and although down 11%, outperformed the market with strong results in Sercel, good marine performance, robust contract land in the Middle-East, strong processing performance and increased marine after-sales
- Before restructuring costs, group operating margin was 9%, and net income was $23m
- After restructuring costs, net income was a loss of $32m
- Backlog as of July 1st was $1.3 billion Adjusting to current market conditions
- Reducing our marine fleet from 27 to 20 vessels. Four removed in 2009 and three more by mid 2010. This adjustment generated a one-time restructuring charge of $87m
- Disciplined capital spending plan is on track
- Our marine restructuring and cost reduction plans are expected to reduce our cost base by $350m in 2011 and have a $250m impact in 2010
- Strengthened balance sheet through more favorable covenants and extension of the debt maturity profile with a successful high-yield bond issue of $350 million
CGGVeritas Chairman & CEO, Robert Brunck commented, "The seismic market continued to weaken during the quarter, especially in contract marine as industry capacity reduction lagged demand decrease. In this context, results were supported by robust Sercel sales this quarter, good marine performance, strong land contract in the Middle East, revitalized marine multi-client after-sales and our industry leading imaging technologies.
"The oil price increase since the beginning of the year has generated growing interest in our recent multi-client programs and is a positive sign for the future, but has not yet been sufficient to initiate a rebound in the seismic market. In the second half of the year, the industry has to reduce capacity to adjust to current market conditions. We will take the opportunity, while adjusting our marine capacity, to standardize and high-grade our fleet to increase performance.
"In 2009 we restructured our debt, and remain focused on cash flow with the objective of maintaining our net debt to equity ratio at current levels. For the longer term, we have programs in place, across the organization, that are expected to reduce our cost base by $350m in 2011 and have a $250m impact in 2010."
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