Compagnie Generale de Geophysique: Third Quarter 2003 Results

Compagnie Generale de Geophysique: Third Quarter 2003 Results
11% increase of YTD revenues expressed in USD Third quarter:


PARIS, Nov. 13  /PRNewswire-FirstCall/ -- Compagnie Generale de Geophysique
(NYSE: GGY; ISIN: FR0000120164) published today its consolidated results for the
third quarter of 2003. Revenue and earnings with the comparative amounts for the
corresponding periods of fiscal year 2002 are as follows:

                    Consolidated Statement of Earnings

   Million of Euros             Year to Date               Third Quarter
                             2003          2002         2003          2002

   Operating revenues       454.6         490.1        135.7         153.8
   Operating profit (loss)
    before NRI               12.1          34.5          0.2          17.6
   Non Recurring Items      (17.4)          0.0        (17.4)          0.0
   Operating profit (loss)
    after NRI                (5.3)         34.5        (17.2)         17.6
   Income (loss) from equity
    investments               5.8           3.8          0.9           2.6
   Goodwill depreciation     (6.2)         (4.8)        (3.2)         (1.5)
   Net interest expense     (15.8)        (22.8)        (3.6)         (8.5)
   Exchange gains (losses)    5.4           5.6         (0.7)          0.9
   Income taxes              (8.4)        (11.0)        (1.7)         (6.2)
   Minority interest          0.0          (0.9)         0.0          (0.8)
   Net income (loss)        (24.5)          4.4        (25.5)          4.1

   Diluted earnings per
    share (Euros)           (2.07)         0.38        (2.15)         0.35


  Revenues:


At Euros 135.7 million, revenues for the third quarter of 2003 decrease 12%
compared to the third quarter of 2002 and are stable in USD. At Euros 454.6
million, CGG total revenues at the end of September decrease 7% in Euros and
increase 11% in USD compared to the first 9 months of 2002.

Total revenues for Geophysical Services for the third quarter 2003 are Euros
76.0 million, down 39% in Euros, (-31% in USD), compared to the third quarter
2002. At the end of September 2003, total revenues for Geophysical Services are
Euros 316.7 million, down 11% in Euros and up 6% in USD compared to the same
period last year.

The Land acquisition total revenues for the third quarter 2003 decreased 53% to
Euros 20.6 million, (-47% in USD), compared to the third quarter 2002. 7 crews
were in operation at the end of September.

The Offshore revenues with Euros 26.3 million for the third quarter 2003 was
down 48% in Euros and down 41% in USD, compared to the third quarter 2002.
Multi-clients after sales were very low during this quarter. The net book value
of the offshore seismic data library at the end of September is Euros 147
million.

The Processing-Reservoir revenues, with Euros 29.1 million for the third quarter
2003, decreased 4% in Euros and increased 9% in USD, compared to the third
quarter 2002.

For the third quarter 2003, Sercel total sales were Euros 63.8 million, up 11 %
in Euros and up 26% in USD, compared to the third quarter 2002. External sales
for the third quarter 2003 were Euros 59.7 million, up 104% in Euros and up 131%
in USD.

At the end of September 2003, Sercel total revenues were Euros 152.0 million,
down 24% in Euros compared to the same period last year (-9% in USD). At the end
of September 2003, Sercel external sales were Euros 137.9 million, up 3% in
Euros and 26% in USD.

Operating Result before NRI:

For the third quarter 2003, the operating result before NRI is a Euros 0.2
million profit compared to Euros 17.6 million operating profit last year. This
strong decrease in the operating result is exclusively attributable to the
geophysical services and reflects the 2003 competitive environment of the
geophysical services market, further aggravated by a strong $/EUR exchange
negative impact.

For the third quarter 2003, the operating result of the Geophysical Services
before NRI is a loss of Euros 12.6 million compared to an operating profit of
Euros 11.2 million for the third quarter 2002. The very low level of after sales
and the very weak land acquisition market explain this poor operating
performance.

For the third quarter 2003, the operating result of Sercel is a profit of Euros
13.8 million, representing 22% of revenues, compared to an operating result of
Euros 10.8 million for the third quarter 2002. The increasing international
demand in Land acquisition products supported this strong operational
performance.

For the first nine months of 2003, the operating result before NRI is a profit
of Euros 12.1 million, a significant decrease compared to the profit of Euros
34.5 million at the end of September 2002. This operating profit does not
include a positive contribution of Euros 5.8 million from subsidiaries
consolidated under the equity method, principally Argas, compared to a positive
contribution of Euros 3.8 million at the end of September 2002.

                           Segment information
   Million of Euros             Year to Date               Third Quarter
                             2003          2002         2003          2002
   Operating revenues
   Services                 317.7         357.3         76.5         124.6
   Products                 152.0         200.5         63.8          57.3
   Elimination              (15.1)        (67.7)        (4.6)        (28.1)
   Total                    454.6         490.1        135.7         153.8
   Operating profit (loss)
   Services before NRI      (13.7)         13.1        (12.6)         11.2
   Services after NRI       (32.1)         13.1        (31.0)         11.2
   Products                  30.4          36.1         13.8          10.8
   Corporate                 (8.0)         (8.5)        (2.7)         (3.1)
   Elimination                4.4          (6.2)         2.7          (1.3)
   Total after NRI           (5.3)         34.5        (17.2)         17.6

  Land acquisition restructuring / NRI:


The land acquisition restructuring program should be completed by late 2003 /
early 2004. This plan anticipates a redundancy of overall 270 personnel as well
as the closure of a number of international representation offices,
corresponding to approximately Euros 30 million of fixed costs savings on a
yearly basis, with full effect in the second half of 2004. A Euros 19 million
provision has been booked in the Q3 accounts as Non Recurring Item (NRI), split
Euros 10.2 million for provisions and risks and Euros 8.8 million for
depreciation of assets, of which Euros 1.6 million have been booked as goodwill
depreciation

Adjusted EBITDA:

The adjusted EBITDA for the third quarter 2003 is Euros 22.3 million, 16% of the
revenues reflecting in particular the low level of multi-clients sales. The
adjusted EBITDA at the end of September is Euros 122.7 million, 27% of the
revenues.

                          Summary of cash-flows
   Million of Euros             Year to Date               Third Quarter
                             2003          2002         2003          2002
   Cash flow from
    operations              135.8         132.5         17.7          58.5
   Capital expenditures     (26.1)       (113.4)        (7.6)        (46.2)
   Investment in library    (92.0)        (99.2)       (25.3)        (38.8)

   Adjusted EBITDA          122.7         147.0         22.3          52.1


  Net Result:


The net group consolidated result after NRI, for the third quarter is a Euros
25.5 million loss, compared to the Euros 4.1 million profit of the third quarter
2002. At the end of September, the net group consolidated result after NRI is a
loss of Euros 24.5 million compared to a profit of Euros 4.4 million at the end
of September 2002.

                           Equity and net debt
   Million of Euros                                YTD 2003    End of 2002
   Shareholders' equity                               395.8          437.5
   Net Debt                                           152.6          201.7
   Gearing ratio                                      38.5%          46.1%


  Equity stake in PGS:


Further to the approval by a US Court on October 21st 2003 of the PGS financial
restructuring program, CGG will own, 868 000 shares, i.e, 4.35% of PGS capital
for a cumulated total investment of approximately USD 19.0 million.

Backlog:

The backlog as of November 1st 2003 stands at USD 305 million, an increase of
33% compared to the USD 230 millions at September 1st. This increase comes in
particular from Sercel with a USD 118 million high record backlog, and from the
offshore acquisition contract order book.

The information included herein contains certain forward-looking statements
within the meaning of Section 27A of the securities act of 1933 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.

A press release and a full report including financial tables will be available
on our website http://www.cgg.com/ at 8 a.m. on this date.

  -- A French language conference call is scheduled at 3 p.m. (Paris time).
     To take part in the French language conference, simply dial ten to
     fifteen minutes prior to the scheduled start time.

            French call-in number   [phone]
            UK call-in number       [phone]
            Replay number           44 208 288 44 59 (access code 29 33 62)
                                    required from France only).

  You will be asked for the name of the conference "CGG Q3 2003 Results".

  -- An English language conference call is scheduled at 4 p.m. (Paris time)
     - 9:00 am (US CT) - 10.00 am (US 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 2679
            US call in              [phone]
            Replay Number           1 719 457 0820  /  888 203 1112

  You will be asked for the name of the conference "CGG Q3 2003 Results"



Copies of the presentation for this conference will be posted on the company web
site and can be downloaded.

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, [phone], or Christophe

Barnini, [phone], or , both of Compagnie Generale de

Geophysique 



Web site:  http://www.cgg.com/ 

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