Comp Gen Geophys (NYSE:GGY)
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CGG Reports Final 2003 Consolidated Results
2003 Net Loss of 10.4 million Euros after Non Recurring Items
PARIS, March 11 /PRNewswire-FirstCall/ -- CGG (SRD: 0000120164; NYSE: GGY)
published today its audited results for the fiscal year 2003.
(in million Euros) Consolidated Statement of Earnings (French GAAP)
Year ended December 31 2003 2002 Q4 2003 Q4 2002
(Unaudited)
Operating revenues 612.4 700.7 157.8 210.6
Operating profit (loss)
before NRI 21.7 54.5 12.9 20.0
Non Recurring Items (11.1) 7.1 3.0 7.1
Operating profit (loss)
after NRI 10.6 61.6 15.9 27.1
Income from equity investments 6.5 6.4 0.7 2.6
Net interest expenses (21.0) (32.6) (5.2) (9.8)
Exchange gains (losses) 4.6 7.9 (0.8) 2.3
Income taxes (3.1) (17.4) 5.3 (6.4)
Goodwill amortization (7.7) (6.3) (1.5) (1.5)
Minority interest (0.3) (2.2) (0.3) (1.3)
Net income (10.4) 17.4 14.1 13.0
Earnings per share in Euros (0.89) 1.49 1.21 1.11
Average number of
shares 11,680,718 11,680,718 11,680,718 11,680,718
Revenues
Total revenues for the year 2003 were 612 million Euros (US$ 689 million) down
13% in Euros and up 4% in US$ compared to 701 million Euros (US$ 665 million)
for 2002.
Total revenues for the fourth quarter 2003 were 158 million Euros (US$ 186),
down 25% in Euros and 13% in US$ compared to 2002 (211 million Euros, US$ 213
million).
Revenues per segment
Total 2003 revenues for Geophysical Services were 413 million Euros (US$ 464
million), down 19% in Euros and 4% in US$ compared to 2002 (508 million Euros,
US$ 483 million).
For the fourth quarter 2003, Geophysical Services revenues were 97 million Euros
(US$ 114 million), down 36% in Euros and down 25% in US$ compared to the same
period in 2002 (151 million Euros, US$ 153 million).
For the year ended December 31, 2003 Sercel's Geophysical equipment total sales
were 217 million Euros (US$ 245 million), down 17% in Euros and stable in US$
compared to 262 million Euros (US$ 247 million) for 2002. For the year ended
December 31, 2003 Sercel's Geophysical equipment external sales were 199 million
Euros (US$ 226 million) up 3% in Euros and 24% in US$ compared to 193 million
Euros (US$ 182 million) in 2002.
For the fourth quarter 2003, Sercel's Geophysical equipment total sales were 65
million Euros (US$ 77 million), up 5% in Euros and 22% in US$ compared to 62
million Euros (US$ 63 million) for the fourth quarter 2002.
Operating Result
The CGG operating profit for 2003 was 10.6 million Euros compared to 61.6
million Euros in 2002.
The CGG operating profit before NRI for 2003 was 21.7 million Euros.
The CGG operating profit for the fourth quarter 2003 was 15.9 million Euros
compared to 27.1 million Euros for the fourth quarter 2002.
Operating loss for Geophysical Services in 2003 was 29.8 million Euros,
including particularly a 17.7 million Euros provision for land restructuring,
compared to an operating profit of 27.4 million Euros in 2002.
Operating profit for Sercel in 2003, which represented 19.7% of revenues, was
42.9 million Euros compared to an operating profit of 51.2 million Euros in
2002.
This decrease in the operating profitability of Geophysical Services results
mainly from the unfavorable Euro/Dollar exchange rate impact, estimated at 20
million Euros, from operating losses in the land acquisition business and from
lower exclusive marine acquisition prices. With 2003 revenues of 109 million
Euros exceeding the investment of 105 million Euros, the multi-client sales
exceeded the investments for the fourth consecutive year. Processing &
Reservoir, in a market increasingly driven by technology and imaging capacity,
has maintained its market share and global performance.
In the Geophysical Equipment market, which was overall stable in 2003 and
characterized by strong demand for land equipment and extremely low demand for
marine equipment, Sercel reinforced its market share, maintained a strong
profitability with a 20% operating margin despite an unfavorable Euro/Dollar
exchange rate impact estimated at 30 million Euros, and increased its commercial
and technological portfolio through acquisitions in China, Australia and
France.
Segment Information
2003 2002 Q4 2003 Q4 2002
Operating revenues
Services 414.4 508.4 96.7 151.1
Products 216.9 262.4 64.9 61.9
Elimination (18.9) (70.1) (3.8) (2.4)
Total 612.4 700.7 157.8 210.6
Operating profit (loss)
Services before NRI (18.7) 20.3 (1.7) 7.2
Services after NRI (29.8) 27.4 2.3 14.3
Products 42.9 51.2 12.5 15.1
Corporate (11.4) (13.2) (3.4) (4.7)
Elimination 8.9 (3.8) 4.5 2.4
Total 10.6 61.6 15.9 27.1
Land acquisition restructuring
The land acquisition restructuring program initiated during the third quarter
2003 was fully implemented and completed by the end of 2003. A number of
international representation offices were closed and 247 people left the
company. This restructuring plan will save approximately 30 million Euros of
fixed costs on a yearly basis, with full effect in the second half of 2004. A
19.3 million Euros charge has been booked in the 2003 accounts, split into 0.9
million Euros for restructuring, 11.8 million Euros for provisions and risks and
6.6 million Euros for depreciation of assets, of which 1.6 million Euros have
been booked as goodwill depreciation. The associated cash disbursement will take
place the first quarter of 2004.
EBITDA
Adjusted EBITDA in 2003 was 162 million Euros, down 23% compared to 210 million
Euros in 2002 and represented 26% of revenues.
At December 31st 2003 2002 Q4 2003 Q4 2002
Adjusted EBITDA 162.3 210.1 39.6 63.1
Cash flow from operations* 185.7 219.0 46.3 86.5
Capital expenditure (44.4) (130.6) (18.3) (17.2)
Investment in library (109.7) (130.1) (17.7) (30.9)
(*) after change in working capital & proceeds of sale of US land library
Net Result
Net profit for 2003 before NRI was 2.3 million Euros.
The net result for 2003 is a loss of 10.4 million Euros compared to a net profit
of 17.4 million Euros in 2002.
The net profit for the fourth quarter 2003 was 14.1 million Euros compared to
13.0 million Euros in 2002
2003 2002 Q4 2003 Q4 2002
Net Result (10.4) 17.4 14.1 13.0
Earnings per share in Euro (0.89) 1.49 1.21 1.11
Average number of
shares 11,680,718 11,680,718 11,680,718 11,680,718
Shareholder Equity and Net debt
At December 31st 2003, net debt stood at 139 million Euros. The gearing ratio of
the CGG Group at the end of 2003 represented 35% of the equity of 397 million
Euros, a steady improvement compared to the 39% at the end of the third quarter
2003 and the 46% at the end of 2002.
2003 2002
Shareholders' equity 396.6 437.5
Net debt 139.2 201.7
Gearing ratio 35.1% 46.1%
Backlog
As of March 1st 2004, CGG's total backlog stood at US$ 337 million, up 10%
compared to 1st of November 2003 and up 16% compared to the same time last
year.
Robert BRUNCK, chairman and CEO declared:
"While the market in 2003 continued to suffer from the combined effects of very
slow demand and persistent overcapacity, CGGhas further reduced its debt, has
delivered positive earnings before exceptional items and preserved its
technological leadership. The excellent Sercel earnings were responsible to a
large extent for this performance, emphasizing once again the urgent need to see
our Seismic Services operate in a radically different business model. Only a
consolidation of our industry followed by a significant reduction in capacity,
particularly in marine, will bring the changes needed to allow the actors of the
industry to reach satisfactory level of return. This is the reasoning behind our
stake in our competitor PGS. Beyond this strategic horizon, which should clarify
itself one way or another in the near future, it seems that 2004 should see the
start of a resumed growth in our markets. This is an encouraging trend in the
context of an otherwise uncertain euro/dollar parity."
The information included herein contains certain forward-looking statements
within the meaning of Section 27A of the securities act of1933 and section 21E
of the Securities Exchange Act of 1934. These forward-looking statements reflect
numerous assumptions and involve a number of risks and uncertainties as
disclosed by the Company from time to time in its filings with the Securities
and Exchange Commission. Actual results may vary materially.
The Compagnie Generale de Geophysique group is a global participant in the
oilfield services industry, providing a wide range of seismic data acquisition,
processing and geoscience services and software to clients in the oil and gas
exploration and production business. It is also a global manufacturer of
geophysical equipment.
-- Robert BRUNCK, Chairman and CEO, will comment on the results during a
public presentation at 10 am; 10, avenue d'Iena (Hubert Rousselier
Amphitheatre) -- Paris 16th arrondissement.
-- Copies of his presentation for this conference are posted on the
company web site and can be downloaded.
-- A press release is available on our website: http://www.cgg.com/
-- An English language conference call is scheduled at 3 p.m.
(Paris time) -- 8 a.m. (U.S. CT) -- 9 a.m. (U.S. ET)
To take part in the English language conference, simply dial five to
ten minutes prior to the scheduled start time.
- International call-in: 1 719 457 26 04
- U.S. call-in: (888) 857 69 32
You will be asked for the name of the conference: "CGG Year 2003
Results" and the name of the Chairman ofthe Board of Directors:
"Robert Brunck."
-- A French language conference call is scheduled at 4.30 p.m. (Paris
time). To take part in the French language conference, simply dial
five to ten minutes prior to the scheduled start time:
- French call-in number: +33 1 70 99 32 12
- UK call-in number: +44 20 71 62 01 25
You will be asked for the name of the conference: "CGG Year 2003
Results" and the name of the Chairman of the Board of Directors:
"Robert Brunck."
A replay will start 2 hours after the close of the call. To listen to
the replay, dial +44 20 82 88 44 59 (access code 29 33 62 required
from France only).
Both calls (in English and in French) will be broadcast live on CGG's
website and replays will be available for 7 days thereafter.
DATASOURCE: Compagnie Generale de Geophysique
CONTACT: Christophe Pettenati-Auziere, +33-1-64-47-36-75, or Christophe
Barnini, +33-1-64-47-38-10,both for CGG,
Web site: http://www.cgg.com/