CGGVeritas: CGGVeritas Announces 2007 Fourth Quarter and Full Year Results
28 Fevereiro 2008 - 3:00AM
PR Newswire (US)
PARIS, February 28 /PRNewswire-FirstCall/ -- - Strong Operational
and Financial Performance in Fourth Quarter - 2007 Goals Exceeded
and Healthy Market Outlook for 2008 CGGVeritas (ISIN: 0000120164 -
NYSE: CGV) today announced its fourth quarter 2007 and full year
2007 unaudited financial results (1). All comparisons are made on a
year-on-year basis with pro-forma 2006 figures. During the fourth
quarter 2007: - Group Revenue grew 15% in EUR and 29% in $ to
EUR604 million ($876 million). - Group operating income grew 40% in
EUR and 56% in $ to EUR130 million ($189 million). Sercel and
Services delivered robust quarterly operational performance. Group
operating income margin grew to 22%. - Sercel delivered EUR176
million ($258 million) in revenue and a 33% operating margin with
particularly high external sales of EUR161 million ($236 million)
up 20% in EUR and 35% in $. - Services revenue grew 14% in EUR and
27% in $ to EUR442 million ($641 million). Operating margin
strengthened to 20%. - Net income of EUR67 million ($97 million)
represented over 11% of revenue, corresponding to EUR 2.40 earnings
per share (EPS). - Backlog as of February 1st 2008 increased to a
record $1.780 billion. CGGVeritas Chairman & CEO, Robert Brunck
commented: "In our first year of operation as CGGVeritas, we are
very pleased to report that we surpassed our objectives and
delivered strong results across our company. With the synergies
that have already resulted from the integration of CGGVeritas and
the continued strengthening of our technology leadership we have
clearly created, in 2007, a solid foundation for our future
development. Looking forward at the industry fundamentals and the
strength of the overall geophysical market we continue to gain
confidence that the seismic industry will see strong double digit
growth in 2008 and a positive outlook for several years to come. In
these robust market conditions, with its solid foundation and
worldwide presence, CGGVeritas is in an optimum position to further
extend its leadership and strengthen its competitive operational
and financial performance." Fourth quarter 2007 Overall performance
and highlights Group Revenue was EUR604 million ($876 million).
This 29% growth in $ was driven by strong sales across all product
lines and geographies and supported by a fleet utilization rate of
86%, strong multi-client sales and continued high delivery of land
seismic equipment. Group EBITDAs (1) strengthened to EUR258 million
($374 million), up 23% in EUR and up 38% in $, compared to EUR210
million ($272 million). EBITDAs margin was 43% compared to 40% a
year ago. Group Operating Profit was EUR130 million ($189 million),
up 40% in EUR and up 56% in $, a 22% operating margin, compared to
EUR93 million ($121 million), an 18% margin last year. In Q4 2007
this included a Purchase Price Allocation (PPA) impact of EUR15
million, ($22 million) vs. a PPA of EUR12 million ($15 million) a
year ago. Net Income was EUR67 million ($97 million) compared to
EUR26 million ($34 million), leading to an EPS of EUR2.40 per
ordinary share and $0.69 per ADS. The effective tax rate, not
including the deferred tax on currency translation, was 37.6%. The
Group net debt was at EUR1.107 million ($1.629 million),
representing 46% of total shareholders equity of EUR2.402 million
($3.536 million). Industrial Capex was EUR43 million ($64 million)
and Total Multi-client Capex was EUR93 million ($135 million) to
develop our offshore programs, particularly our leading
wide-azimuth programs in Walker Ridge and Garden Banks in the Gulf
of Mexico (GoM) ), and our onshore surveys in North America. The
average multi-client amortization rate was 50%. The Net Book Value
of the multi-client library stands at EUR435 million ($641 million)
split EUR296 million ($435 million) for our marine multi-client
library and EUR140 million ($206 million) for our land multi-client
library. 2007 Overall performance and highlights Group Revenue was
EUR2.374 billion ($3.251 billion) up 19% in EUR and up 30% in $.
Group EBITDAs reached EUR997 million ($1.366 billion), up 26% in
EUR and up 38% in $, compared to EUR790 million ($992 million).
EBITDAs margin was 42%, two points above our 40% announced
objective. Group Operating Profit was EUR489 million ($670 million)
up 38% in EUR and up 50% in $, a 21% operating margin compared to
EUR354 million ($445 million) an 18% margin last year. In 2007 this
included a PPA impact of EUR48 million, ($65 million) vs. a PPA
impact of EUR38 million ($47 million) in 2006. Net Income was
EUR250 million ($342 million) compared to EUR116 million ($146
million), leading to an EPS of EUR9.12 per ordinary share and $2.50
per ADS. The 2007 effective tax rate, not including the deferred
tax on currency translation, was 37.0%. Industrial Capex was EUR231
million ($316 million) and Multi-client Capex was EUR371 million
($509 million). Average multi-client amortization rate was 53%.
Comparison with CGGVeritas proforma 2006 In million euros
Consolidated Statement of Income Fourth Quarter YEAR 2007 2006 2007
2006 Exchange rate 1.451 1.292 1.369 1.256 Operating revenue 603.6
523.0 2374.1 1990.2 Sercel 175.7 188.6 789.5 610.1 Services 442.2
387.9 1694.6 1510.7 Elimination (14.3) (53.5) (110.0) (130.6) Gross
profit 196.1 170.6 753.0 602.9 Operating profit 130.4 93.1 489.1
354.4 Sercel 57.5 60.7 266.2 174.2 Services 86.3 66.6 304.9 242.0
Corporate and Elimination (13.4) (34.2) (82.0) (61.8) Income from
equity investments 1.8 1.2 4.3 10.1 EBITDAs 258.0 209.9 997.3 789.7
Sercel 62.5 66.1 286.0 192.3 Services 206.4 175.1 784.1 659.1 Net
income 67.3 26.1 249.6 116.2 Industrial Capex & development
costs 43.1 36.2 230.5 195.8 Multi-client Capex 93.0 64.4 371.4
224.5 Net Debt / Equity gearing ratio 46% 50% 46% 50% Earnings per
share (in Euros) 2.40 0.93 9.12 4.24 In million US dollars
Consolidated Statement of Income Fourth Quarter YEAR 2007 2006 2007
2006 Exchange rate 1.451 1.292 1.369 1.256 Operating revenue 876.0
677.7 3250.7 2499.9 Sercel 257.8 242.8 1079.5 766.3 Services 640.5
503.0 2320.2 1897.6 Elimination (22.3) (68.1) (149.0) (164.0) Gross
profit 284.2 220.3 1031.0 757.2 Operating profit 188.6 120.6 669.6
445.2 Sercel 84.6 77.9 364.4 218.8 Services 124.3 86.1 417.5 304.0
Corporate and Elimination (20.3) (43.5) (112.3) (77.6) Income from
equity investments 2.5 1.6 5.9 12.7 EBITDAs 374.0 272.0 1365.5
991.9 Sercel 91.9 84.9 391.5 241.6 Services 298.8 226.7 1073.6
827.9 Net income 97.3 34.0 341.8 146.0 Industrial Capex &
development costs 64.3 54.3 315.6 268.1 Multi-client Capex 135.1
92.6 508.5 307.4 Net Debt / Equity gearing ratio 46% 50% 46% 50%
Earnings per share (in dollars) 3.47 1.22 12.49 5.33 Fourth quarter
2007 Business review Sercel Sercel external sales were at a high
level of EUR161 million ($236 million) up 20% in EUR and up 35% in
$, driven by continued strong land equipment deliveries. Total
revenue for Sercel was EUR176 million ($258 million) down 7% in EUR
and up 6% in $. EBITDAs was EUR63 million ($92 million) a 36%
EBITDAs margin, compared to EUR66 million ($85 million) a 35%
margin last year. Operating Profit was EUR58 million ($85 million)
a 33% operating margin, compared to EUR61 million ($78 million) a
32% margin a year ago. Services Revenue for Services was EUR442
million ($641 million) up 14% in EUR and up 27% in $ supported by
strong activity across all business lines. We launched the Vanquish
bringing the full fleet of 20 vessels into operations late
November. Contract marine and land performed well and multi-client
after sales were strong. EBITDAs was EUR206 million ($299 million),
a 47% EBITDAs margin compared to EUR175 million ($227 million) and
a 44% margin last year. Operating Profit including PPA impact was
EUR86 million ($124 million) a 20% operating margin, compared to
EUR67 million ($86 million) a 17% margin a year ago. - Marine
contract revenue was EUR136 million ($198 million) up 20% in EUR
and up 34% in $. We operated 65% of our high-end 3D fleet on
contract, spread throughout the Eastern Hemisphere, in both EAME
and Asia Pacific including a multi-azimuth contract offshore Egypt.
- Land contract revenue was EUR79 million ($115 million) up 54% in
EUR and up 70% in $. The land market remained strong and we
operated 21 crews on average in our select locations with 14 crews
in the Eastern Hemisphere and 7 crews in the Western Hemisphere. -
Processing & reservoir revenue was EUR63 million ($92 million)
down 8% in EUR and up 3% in $ from a strong quarter a year ago. We
operated 49 processing and imaging centers worldwide at the end of
December, including 14 dedicated client centers. - Multi-client
revenue was EUR163 million ($236 million) up 6% in EUR and up 19%
in $. Amortization rates were near 50%. Multi-client marine revenue
was EUR130 million ($188 million) up 19% in EUR and 32% in $.
Marine multi-client Capex was EUR71 million ($104 million). The
Vision and the Vanquish commenced work on the Garden Banks
multi-vessel wide-azimuth survey in the GoM. Prefunding was at
EUR51 million ($75 million) and the prefunding ratio was 72%.
After-sales revenue was particularly high at EUR79 million ($113
million) driven by a strong demand for our conventional data
library in the GoM and Brazil. Multi-client land revenue was EUR33
million ($48 million) down 25% in EUR and down 15% in $. Prefunding
was EUR20 million ($28 million) and the prefunding ratio was 90%.
Land multi-client Capex was EUR22 million ($31 million) as 4 crews
operated in Canada and the US. After-sales revenue was EUR14
million ($20 million). 2007 Business review Sercel External revenue
was up 42% in EUR and 55% in $ at EUR680 million (US$931 million).
Total revenue was EUR790 million (US$1.080 billion) up 29% in EUR
and 41% in $ with internal sales accounting for 14% of Sercel
revenue. Growth was driven by a very strong demand for land seismic
equipment and a sustained level of demand for marine equipment.
EBITDAs was EUR286 million ($392 million) a 36% EBITDAs margin,
compared to EUR192 million ($242 million) a 32% margin last year.
Operating Profit was EUR266 million ($364 million) a 34% operating
margin, showing a sharp increase year-on-year when compared to
EUR174 million ($219 million) and a 29% margin a year ago. Services
Revenue for Services was EUR1.694 billion ($2.320 billion) up 12%
in EUR and up 22% in $, driven by strengthening market conditions,
continued upward price mobility, our 83% vessel utilization rate
and growing demand for multi-client data. EBITDAs was EUR784
million ($1.074 billion), a 46% EBITDAs margin compared to EUR659
million ($828 million) and a 44% margin last year. Operating Profit
was EUR305 million ($417 million), an 18% operating margin,
compared to EUR242 million ($304 million) a 16% operating margin a
year ago. In 2007 this included a PPA impact of EUR48 million, ($65
million) vs. a PPA impact of EUR38 million ($47 million) in 2006. -
Marine contract revenue was EUR531 million ($727 million) up 15% in
EUR and up 25% in $. Two large high-capacity 3D vessels joined the
fleet, the Vision in early July and the Vanquish in late November.
We upgraded two 2D vessels to 3D (4 streamer configurations) and
upgraded the Geo-Challenger to 12 streamers. Lastly, the Group
ordered two high-end seismic X-Bow(R) vessels from Eidesvik
Offshore for delivery in 2010. - Land contract revenue was EUR327
million ($448 million) up 21% in EUR and up 32% in $. In 2007,
CGGVeritas continued to focus on key areas where its local
excellence is widely acknowledged. Including ARGAS, we had an
average of 22 crews operating worldwide. - Processing &
reservoir revenue was EUR263 million ($360 million) up 2% in EUR
and up 11% in $. Global demand for sophisticated imaging services
continued to strengthen, driven by growing volumes of land and
marine data. - Multi-client revenue was EUR589 million ($806
million) up 13% in EUR and up 23% in $. Capex was EUR371 million
($509 million), prefunding was 81% and the amortization rate was
53%. Multi-client marine revenue was EUR455 million ($623 million),
up 7% in EUR and 17% in $. Prefunding was EUR230 million ($315
million) and the prefunding ratio was 86%. Marine multi-client
Capex was EUR269 million ($368 million) as 40% of the 3D fleet
operated on multi-client programs mainly in the GoM and in Brazil.
After-sales were EUR225 million ($308 million) vs. EUR280 million
($351 million). Average marine amortization rate was 49%. Marine
library Net Book Value was EUR296 million ($435 million).
Multi-client land revenue was EUR134 million ($184 million) up 42%
in EUR and up 54% in $. Prefunding was EUR70 million ($95 million)
and the prefunding ratio was 67%. Land multi-client Capex was
EUR102 million ($140 million) with 3 crews in N. America.
After-sales were EUR65 million ($89 million), up 33% in EUR and 45%
in $. Average land amortization rate was 67%. Land library Net Book
Value was EUR140 million ($206 million). 2008 Market overview and
objectives Looking forward in 2008 we expect the overall
geophysical market to remain robust with about 15% growth
worldwide. At CGGVeritas our objective is to grow at least in line
with the market. Based on a EUR/$ exchange rate of 1.45, our
operating margin targets are to be above 30% for Sercel and above
20% for Services. As an outcome of our integration, synergies are
expected to reach $80 million in 2008 and their full impact in
2009. Our net debt to equity ratio objective is to be below 35% by
end of 2008. Within the normal quarterly fluctuations of our
business, we expect approximately 2/3 of our fleet to be dedicated
to contract work and 1/3 of our fleet to be on highly prefunded
multi-client programs with an average amortization rate to remain
in the 50% range. Our continued growth will be supported by an
estimated Capex of EUR170 million ($250 million) for industrial
assets and upgrades and EUR310 million ($450 million) for
continuing the expansion of our leading marine and land
multi-client library including our wide-azimuth programs in the
GoM. Comparison with CGG standalone In million euros Consolidated
Statement of Income Fourth Quarter YEAR 2007 2006 2007 2006
Exchange rate 1.451 1.292 1.369 1.256 Operating revenue 603.6 374.0
2374.1 1329.6 Sercel 175.7 188.6 789.5 610.1 Services 442.2 188.7
1694.6 792.0 Elimination (13.3) (3.3) (110.0) (72.5) Operating
profit 130.4 71.4 489.1 289.0 Sercel 57.5 60.7 266.2 174.2 Services
86.3 20.5 304.9 150.3 Corporate and Elimination (13.4) (9.8) (82.0)
(35.5) Income from equity investments 1.8 1.2 4.3 10.1 EBITDAs
258.0 124.6 997.3 483.1 Sercel 62.5 66.1 286.0 192.3 Services 206.4
65.3 784.1 326.0 Net income 67.3 37.6 249.6 158.7 Earnings per
share (in Euros) 2.40 2.12 9.12 9.04 Other information Robert
BRUNCK, Chairman and CEO, will comment on the results during a
public presentation today, February 28th 2008 at 10:00 am - at
Maison du Barreau - 2 & 4 rue de Harlay - Paris 1st. An English
language conference call is also scheduled today at 3:00 pm (Paris
time) - 2.00 pm (London time) - 8:00 am (US CT) - 9:00 am (US ET).
- International call-in: +1-647-427-3417 - US call-in:
+1-888-241-0558 - Replay: +1-402-220-4283 & +1-800-839-9868 -
code 34937269 The presentation is available on our website and can
be downloaded. To take part in the conference call, simply dial
five to ten minutes prior to the scheduled start time to register
for the call and to check your connection is working properly. You
will be asked for the name of the conference: "CGGVeritas 2007 year
end results". CGGVeritas will also provide a streaming audio
webcast of the conference call accessible for two weeks following
the conference call on our website at http://www.cggveritas.com/ on
a listen-only basis. About CGGVeritas CGGVeritas
(http://www.cggveritas.com/) is a leading international pure-play
geophysical company delivering a wide range of technologies,
services and equipment through Sercel, to its broad base of
customers mainly throughout the global oil and gas industry.
CGGVeritas is listed on the Eurolist of Euronext Paris SA (ISIN:
0000120164) and the New York Stock Exchange (in the form of
American Depositary Shares, NYSE: CGV). 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. Investor Relations Contacts
Paris: Houston: Christophe Barnini Hovey Cox Tel: +33-1-64-47-38-10
Tel: +1-832-351-8821 E-Mail: E-Mail: DATASOURCE: CGGVeritas
CONTACT: Investor Relations Contacts: Paris: Christophe Barnini,
Tel: +33-1-64-47-38-10, E-Mail: ; Houston: Hovey Cox, Tel:
+1-832-351-8821, E-Mail:
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