Petroleum Geo-Services ASA: Third Quarter 2017 Results
Highlights Q3 2017
* Rune Olav Pedersen appointed new President & CEO with effect from September
1, 2017
* Revenues of $207.6 million, compared to $224.1 million in Q3 2016
* EBITDA of $108.6 million, compared to $112.7 million in Q3 2016
* EBIT, excluding impairments and other charges, a loss of $30.4 million,
compared to a loss of $5.4 million in Q3 2016
* Impairments and other charges of $82.9 million related to stacked vessels
and specific MultiClient surveys, and in addition a write down of remaining
deferred tax asset
* MultiClient pre-funding revenues of $101.8 million with a corresponding pre-
funding level of 124%, compared to $84.3 million and 134% in Q3 2016
* MultiClient late sales of $47.8 million, compared to $63.2 million in Q3
2016
* Cash flow from operations of $118.4 million, compared to $80.4 million in Q3
2016
* Liquidity reserve of $224.2 million, compared to $417.3 million in Q3 2016
"Our MultiClient business continues to deliver solid revenues. The pre-funding
level of 124% achieved in Q3 is driven by GeoStreamer MultiClient projects
offshore Canada and in the North Sea. MultiClient late sales were satisfactory
considering the impacts of Hurricane Harvey and that we did not benefit from any
particular license rounds this quarter.
The improved pricing for marine contract projects in Q3 compared to last year
was offset by a challenging project in Asia Pacific, resulting in unsatisfactory
financial results for our marine contract activities in the quarter.
The order book decreased sequentially as a result of high production and low
order intake, however the negative trend ceased in October and subsequent to
quarter end we have secured several projects for execution in Q4 and Q1 2018.
We are taking measures to be able to deliver positive cash flow after debt
service in the current challenging environment by implementing a centralized,
simplified and streamlined organizational structure, combined with a reduced
baseline for 3D capacity and improved flexibility for vessels and imaging. These
initiatives will reduce our gross cash cost by at least $100 million in 2018,
compared to our operating costs this year."
Rune Olav Pedersen,
President and Chief Executive Officer
Outlook
PGS expects the improved cash flow among clients, combined with growing
limitations on streamer availability in the industry, to benefit marine 3D
seismic market fundamentals longer-term. There is a risk that a market recovery
will take some time. Increased seasonal variations will impact activity and
pricing in the coming winter season.
Based on the current operational projections and with reference to disclosed
risk factors, PGS expects full year 2017 gross cash cost to be below $700
million.
MultiClient cash investments are expected to approximate $225 million, with a
pre-funding level above 100%.
Approximately 45% of the 2017 active 3D vessel time is expected to be allocated
to MultiClient acquisition.
Capital expenditure for 2017 is expected to approximate $150 million, of which
approximately $89 million relates to the delivery of Ramform Hyperion in Q1
2017.
The order book totaled $167 million at September 30, 2017 (including $115
million relating to MultiClient), compared to $248 million at June 30, 2017 and
$190 million at September 30, 2016. Order intake improved in October and
subsequent to 30 September the Company has received awards amounting to
approximately $55 million.
+---------------------------------+---------------+---------------+------------+
| | | | |
| | | | Year ended |
| | Quarter ended | Nine months |December 31,|
|Key Financial Figures | September 30, | ended | |
|(In USD millions, except per | | September 30, | |
|share data) +-------+-------+-------+-------+------------+
| | | | | | |
| | 2017 | 2016 | 2017 | 2016 | 2016 |
+---------------------------------+-------+-------+-------+-------+------------+
|Revenues | 207.6| 224.1| 602.9| 610.2| 764.3|
+---------------------------------+-------+-------+-------+-------+------------+
|EBITDA | 108.6| 112.7| 251.3| 260.2| 313.3|
+---------------------------------+-------+-------+-------+-------+------------+
|EBIT ex. impairment and other | (30.4)| (5.4)|(122.6)| (71.9)| (137.5)|
|charges, net | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|EBIT as reported |(113.3)| (11.5)|(224.4)| (87.8)| (180.3)|
+---------------------------------+-------+-------+-------+-------+------------+
|Income (loss) before income tax |(136.1)| (24.2)|(276.6)|(143.9)| (262.8)|
|expense | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Net income (loss) to equity |(189.9)| (29.0)|(328.6)|(137.7)| (293.9)|
|holders | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Basic earnings per share ($ per | (0.56)| (0.12)| (0.97)| (0.58)| (1.21)|
|share) | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Net cash provided by operating | 118.4| 80.4| 197.8| 256.2| 320.9|
|activities | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Cash investment in MultiClient | 82.0| 63.0| 159.4| 153.1| 201.0|
|library | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Capital expenditures (whether | 16.6| 19.0| 131.1| 179.9| 208.6|
|paid or not) | | | | | |
+---------------------------------+-------+-------+-------+-------+------------+
|Total assets |2,644.3|2,988.5|2,644.3|2,988.5| 2,817.0|
+---------------------------------+-------+-------+-------+-------+------------+
|Cash and cash equivalents | 24.2| 77.3| 24.2| 77.3| 61.7|
+---------------------------------+-------+-------+-------+-------+------------+
|Net interest bearing debt |1,113.2|1,208.6|1,113.2|1,208.6| 1,029.7|
+---------------------------------+-------+-------+-------+-------+------------+
A complete version of the Q3 2017 earnings release and presentation can be
downloaded from www.newsweb.no and www.pgs.com.
FOR DETAILS, CONTACT:
Bård Stenberg, VP IR & Corporate Communications
Phone: +47 67 51 43 16
Mobile: +47 99 24 52 35
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Petroleum Geo-Services ("PGS" or "the Company") is a focused Marine geophysical
company that provides a broad range of seismic and reservoir services, including
acquisition, imaging, interpretation, and field evaluation. The Company's
MultiClient data library is among the largest in the seismic industry, with
modern 3D coverage in all significant offshore hydrocarbon provinces of the
world. The Company operates on a worldwide basis with headquarters in Oslo,
Norway.
PGS has a presence in 17 countries with regional centers in London, Houston and
Kuala Lumpur. Our headquarters is in Oslo, Norway and the PGS share is listed on
the Oslo stock exchange (OSE: PGS).
For more information on Petroleum Geo-Services visit www.pgs.com.
****
The information included herein contains certain forward-looking statements that
address activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future. These statements are
based on various assumptions made by the Company, which are beyond its control
and are subject to certain additional risks and uncertainties. The Company is
subject to a large number of risk factors including but not limited to the
demand for seismic services, the demand for data from our multi-client data
library, the attractiveness of our technology, unpredictable changes in
governmental regulations affecting our markets and extreme weather conditions.
For a further description of other relevant risk factors we refer to our Annual
Report for 2016. As a result of these and other risk factors, actual events and
our actual results may differ materially from those indicated in or implied by
such forward-looking statements. The reservation is also made that inaccuracies
or mistakes may occur in the information given above about current status of the
Company or its business. Any reliance on the information above is at the risk of
the reader, and PGS disclaims any and all liability in this respect.
This information is subject to the disclosure requirements pursuant to section
5 -12 of the Norwegian Securities Trading Act.