Continued Increase in Contract Rates
Highlights Q2 2023
* Produced Revenues of $186.4 million, compared to $209.7 million in Q2 2022
* Produced EBITDA of $113.1 million, compared to $129.4 million in Q2 2022
* Produced EBIT (ex. Impairments and other charges, net) of $23.2 million,
compared to $50.1 million in Q2 2022
* Revenues and Other Income according to IFRS of $156.0 million, compared to
$273.6 million in Q2 2022
* Cash flow from operations of $99.4 million, compared to $43.7 million in Q2
2022
* Commenced acquisition of PGS first offshore wind site characterization
survey
* Secured another multi-season MultiClient project in the Norwegian Sea,
evidencing renewed exploration interest in the region
"We achieved a MultiClient pre-funding level of 127% of capitalized cash cost in
the quarter, and we continue to deliver improving rates and margins on our
contract work. The strong acquisition revenues are achieved despite weather
related challenges for our vessels working on the Norwegian continental shelf in
the early part of the Europe season, and a delayed yard stay for the Ramform
Sovereign. Further, I am pleased to see a meaningful increase in MultiClient
late sales, which more than doubled from the first quarter this year.
Our New Energy business continues to progress and in Q2 we commenced acquisition
of our first offshore wind site characterization survey in the Irish Sea. Our
offshore wind site characterization offering has attracted considerable client
interest, and we recently announced another large contract in the US by a
leading renewable energy company with mobilization scheduled for August and
completion scheduled for February next year.
Our order book remains at a high level, and we are now in the process of booking
capacity for the early part of the winter season. We expect the contract bidding
activity to increase driven by the highest volume of sales leads since December
2014.
We refinanced earlier this year deliberately leaving $138 million of our Term
Loan B to be repaid in March 2024. According to our estimates we can manage this
repayment with our liquidity reserve and the cash flow we expect to generate
over the next quarters. However, to further increase the liquidity headroom and
financial robustness we announced today that we have secured commitments of $75
million from supportive creditors for a separate facility to refinance parts of
the March 2024 Term Loan B maturity."
Rune Olav Pedersen,
President and Chief Executive Officer
Outlook
As the global energy transition evolves, PGS expects global energy consumption
to continue to increase over the longer term with oil and gas remaining an
important part of the energy mix. Offshore reserves will be vital for future
energy supply and support demand for marine seismic services. The seismic market
is recovering on the back of increased focus on energy security, several years
of low investment in new oil and gas supplies, and higher oil and gas prices.
Offshore investments in oil and gas exploration and production are expected to
increase in 2023. The seismic acquisition market is likely to benefit from the
higher exploration and production spending, and a limited supply of seismic
vessels.
PGS expects full year 2023 gross cash costs to be approximately $550 million.
The increase from 2022 is primarily due to the higher activity level and more
capacity in operation.
2023 MultiClient cash investments are expected to be approximately $180 million.
Approximately 50% of 2023 active 3D vessel time is expected to be allocated to
contract work.
Capital expenditures for 2023 is expected to be approximately $100 million.
The order book amounted to $341 million on June 30, 2023. On March 31, 2023, and
June 30, 2022, the Order book was $377 million and $311 million, respectively.
+-------------------------+---------------+---------------+--------------------+
| | | | |
| | | | |
| | Quarter ended | Year to date |Year ended December |
| | June 30, | June 30, | 31, |
| +-------+-------+-------+-------+--------------------+
| | | | | | |
|Consolidated Key | | | | | |
|Financial Figures | | | | | |
|(In millions of US | | | | | |
|dollars, except per share| | | | | |
|data) | 2023 | 2022 | 2023 | 2022 | 2022 |
+-------------------------+-------+-------+-------+-------+--------------------+
| | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Segment reporting | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Produced Revenues | 186.4| 209.7| 358.5| 350.0| 817.2|
+-------------------------+-------+-------+-------+-------+--------------------+
|Produced EBITDA | 113.1| 129.4| 184.5| 185.3| 446.7|
+-------------------------+-------+-------+-------+-------+--------------------+
|Produced EBIT ex | | | | | |
|impairments and other | | | | | |
|charges, net | 23.2| 50.1| 3.3| 18.6| 108.8|
+-------------------------+-------+-------+-------+-------+--------------------+
| | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Profit and loss numbers, | | | | | |
|As Reported | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Revenues and Other Income| 156.0| 273.6| 299.1| 409.9| 825.1|
+-------------------------+-------+-------+-------+-------+--------------------+
|EBIT ex. impairment and | | | | | |
|other charges, net | 25.1| 57.8| 8.9| 37.3| 117.1|
+-------------------------+-------+-------+-------+-------+--------------------+
|Net financial items | (23.1)| (32.7)| (60.7)| (53.4)| (112.7)|
+-------------------------+-------+-------+-------+-------+--------------------+
|Income (loss) before | | | | | |
|income tax expense | (4.2)| 28.0| (58.0)| (16.2)| (6.7)|
+-------------------------+-------+-------+-------+-------+--------------------+
|Income tax expense | (5.1)| (9.3)| (10.2)| (14.3)| (26.1)|
+-------------------------+-------+-------+-------+-------+--------------------+
|Net income (loss) to | | | | | |
|equity holders | (9.3)| 18.7| (68.2)| (30.5)| (32.8)|
+-------------------------+-------+-------+-------+-------+--------------------+
|Basic earnings per share | | | | | |
|($ per share) | (0.01)| 0.04| (0.08)| (0.07)| (0.06)|
+-------------------------+-------+-------+-------+-------+--------------------+
| | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Other key numbers | | | | | |
+-------------------------+-------+-------+-------+-------+--------------------+
|Net cash provided by | | | | | |
|operating activities | 99.4| 43.7| 233.8| 107.0| 371.3|
+-------------------------+-------+-------+-------+-------+--------------------+
|Cash Investment in | | | | | |
|MultiClient library | 42.9| 26.2| 77.8| 47.7| 106.4|
+-------------------------+-------+-------+-------+-------+--------------------+
|Capital expenditures | | | | | |
|(whether paid or not) | 23.0| 16.2| 52.7| 35.1| 50.2|
+-------------------------+-------+-------+-------+-------+--------------------+
|Total assets |1,688.9|1,822.6|1,688.9|1,822.6| 1,953.3|
+-------------------------+-------+-------+-------+-------+--------------------+
|Cash and cash equivalents| 137.1| 219.8| 137.1| 219.8| 363.8|
+-------------------------+-------+-------+-------+-------+--------------------+
|Net interest-bearing debt| 592.3| 887.2| 592.3| 887.2| 616.7|
+-------------------------+-------+-------+-------+-------+--------------------+
|Net interest-bearing | | | | | |
|debt, including lease | | | | | |
|liabilities following | | | | | |
|IFRS 16 | 674.3| 985.8| 674.3| 985.8| 703.9|
+-------------------------+-------+-------+-------+-------+--------------------+
A complete version of the Q2 2023 earnings release and presentation can be
downloaded from www.newsweb.no or www.pgs.com.
The webcast can be accessed from this link:
https://channel.royalcast.com/landingpage/hegnarmedia/20230720_2/
Webcast YouTube link:
https://youtube.com/live/xrIdrhKL6f8
FOR DETAILS, CONTACT:
Bård Stenberg, VP IR & Communication
Mobile: +47 99 24 52 35
****
PGS ASA and its subsidiaries ("PGS" or "the Company") is an integrated marine
geophysics company, which operates on a world-wide basis. PGS business supports
the energy industry, including oil and gas, offshore renewables and carbon
storage. The Company's headquarter is in Oslo, Norway and the PGS share is
listed on the Oslo stock exchange (OSE: PGS). For more information on PGS visit
www.pgs.com (http://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 2022 and the Q2 2023 earnings release. 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.