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  • CGG: Announces its Q3 2021 Results

    CGG, a world leader in Geoscience, announced today its third quarter 2021 non-audited results. 

    Commenting on these results, Sophie Zurquiyah, CGG CEO, said:

    “I am encouraged by our Q3 results and more importantly by the signs of the gradually increasing demand for our core businesses, supported by the strengthening macro-environment. Our differentiated products and services remain fundamental to solving our client’s challenges in complex sub-surface environments, addressing their digitalization needs and reducing their environmental footprint.

    Beyond the core, we are developing and commercially progressing a growing portfolio of business opportunities targeting digital geoscience, energy transition, environmental geoscience, and infrastructure monitoring. These opportunities leverage our leadership technology positions in sophisticated algorithms, high performance computing, earth subsurface data base and sensors, all of which provide new growth for the company”.

     

    Q3 2021: A solid performance

    §  IFRS figures: revenue at $210m, EBITDAs at $58m, OPINC at $20m

    §  Segment revenue at $270m, up 35% year-on-year and up 71% sequentially

    o   Geoscience segment revenue at $77m, stable year-on-year and up 5% sequentially.

    o   Multi-Client segment sales at $92m, up 26% year-on-year and up 149% sequentially.

    o   Equipment segment sales at $101m, up 105% year-on-year and up 113% sequentially.

    §  Segment EBITDAs at $118m a 44% margin and Adjusted* Segment EBITDAs at $118m,

    §  Segment Operating Income at $33m and Adjusted* Segment Operating Income at $33m

    §  Group Net Loss at $(17)m 

    §  Net Cash Flow at $(34)m.

     

    9 months 2021: A progressive recovery

    §  IFRS figures: revenue at $591m, EBITDAs at $146m, OPINC at $5m

    §  Segment revenue at $640m, down (5)% year-on-year

    §  Segment EBITDAs at $195m a 31% margin due to low H1 activity and Adjusted* Segment EBITDAs at $193m,

    §  Segment Operating Income at $14m and Adjusted* Segment Operating Income at $6m

    §  Group Net loss at $(148)m divided by two year on year

    §  Net Cash Flow at $(61)m before $(40)m of fees related to the refinancing

     

    Balance Sheet at the end of September

    §  The sale of the physical asset storage business and the sale and lease back of the headquarter building are progressing as planned

    §  Liquidity of $340m and cash liquidity of $240m after reducing gross debt by $28m as part of refinancing. Net debt before IFRS 16 at $987m as of September 30, 2021

     

    Post closing event

    §  The sale of the GeoSoftware business was completed on October 1st 2021 for a total cash consideration of $95m

    *Adjusted indicators represent supplementary information adjusted for non-recurring charges triggered by economic downturn.

     

      

    Key Figures – Third Quarter 2021

     

    Key Figures – Quarter
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Operating revenues17821018%
      Operating Income(43)20
      Equity from Investment
      Net cost of financial debt(34)(27)(21)%
      Other financial income (loss)(12)
      Income taxes1(7)
      Net Income / Loss from continuing operations(88)(14)(84)%
      Net Income / Loss from discontinued operations(5)(3)(44)%
      Group net income / (loss)(93)(17)82%
      Operating Cash Flow1276
      Net Cash Flow(92)(34)63%
      Net debt9101,11322%
      Net debt before lease74998732%
      Capital employed2,1722,140(1)% 

     

    Key Figures – 9 months 2021

    Key Figures IFRS – 9 months
    In million $
    2020
    9 MONTHS
    2021
    9 MONTHS
    Variances %
      Operating revenues669591(12)%
      Operating Income(115)5
      Equity from Investment
      Net cost of financial debt(100)(94)(5)%
      Other financial income (loss)(42)(42)(1)%
      Income taxes(37)(19)(48)%
      Net Income / Loss from continuing operations(293)(150)(49)%
      Net Income / Loss from discontinued operations(45)2
      Group net income / (loss)(338)(148)56%
      Operating Cash Flow238235(1)%
      Net Cash Flow(152)(61)60%
      Net debt9101,11322%
      Net debt before lease liabilities74998732%
      Capital employed2,1722,140(1)%

     

    Key Segment Figures – Third Quarter 2021 

    Key Segment Figures – Quarter
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Segment revenue19927035%
      Segment EBITDAs52118
      Group EBITDAs margin26%44%18 bps
      Segment operating income(38)33
      Opinc margin(19%)12%31 bps
      IFRS 15 adjustment(5)(13)
      IFRS operating income(43)20
      Operating Cash Flow1276
      Segment Net Cash Flow(92)(34)63%
      Supplementary information   
      Adjusted segment EBITDAs before NRC8011847%
      EBITDAs margin40%44%3 bps
      Adjusted segment operating income before NRC(4)33
      Opinc margin(2%)12%14 bps

      

    Key Segment Figures – 9 months 2021

     

    Key Segment Figures – 9 months
    In million $
    2020
    9 MONTHS
    2021
    9 MONTHS
    Variances %
      Segment revenue672640(5)%
      Segment EBITDAs243195(20)%
      Group EBITDAs margin36%31%(6) bps
      Segment operating income(122)14
      Opinc margin(18%)2%20 bps
      IFRS 15 adjustment7(9)
      IFRS operating income(115)5
      Operating Cash Flow238235(1)%
      Net Segment Cash Flow(152)(61)60%
      Supplementary information   
      Adjusted segment EBITDAs before NRC281193(31)%
      EBITDAs margin42%30%(12) bps
      Adjusted segment operating income before NRC326(82)%
      Opinc margin5%1%(4) bps

      

    Key figures bridge: Segment to IFRS – Third Quarter 2021

     

    P&L items
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
      Total Revenue270(59)210
      OPINC33(13)20
    Cash Flow Statement items
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
      EBITDAs118(59)58
      Change in Working Capital & Provisions(48)5911
      Cash Provided by Operations7676
       
    Multi-Client Data Library NBV
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
    Opening Balance Sheet , Jun 21313203516
    Closing Balance Sheet , Sep 21311245556

     

    Key figures bridge: Segment to IFRS – 9 months 2021

     

    P&L items
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
      Total Revenue640(49)591
      OPINC14(9)5
    Cash Flow Statement items
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
      EBITDAs195(49)146
      Change in Working Capital & Provisions394988
      Cash Provided by Operations235235
        
    Multi-Client Data Library NBV
    In million $
    Segment figuresIFRS 15 adjustmentIFRS figures
    Opening Balance Sheet , Jan 1st 21285207492
    Closing Balance Sheet , Sep 30th 21311245556

     

    Third Quarter 2021 Segment Financial Results 

    Geology, Geophysics & Reservoir (GGR)

    Geology, Geophysics & Reservoir (GGR)
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Segment revenue15016812%
      Geoscience (SIR)7777
      Multi-Client739226%
          Prefunding395951%
          After-Sales3432(4)%
      Segment EBITDAs5610688%
      EBITDAs Margin38%63%25 bps
      Segment operating income(25)30
      OPINC Margin(16%)18%34 bps
      Equity from investments
      Capital employed (in billion $)1.71.6  (3)%
      Supplementary information   
      Adjusted segment EBITDAs before NRC8510726%
      EBITDAs Margin57%63%6 bps
      Adjusted segment OPINC before NRC1030
      OPINC Margin6%18%12 bps
      Other Key Metrics   
      Multi-Client cash capex ($m)(58)(57)1%
      Multi-Client cash prefunding rate (%)68%103%36 bps

    GGR segment revenue was $168 million, up 12% year-on-year and up 53% sequentially.

    • Geoscience revenue was $77 million, stable year-on-year and up 5% sequentially.

    Market recovery is accelerating driven by high-end marine & OBN projects for reservoir optimization mainly for IOCs. At the end of September total order intakes were up 10% year-on-year and up more than 50% sequentially. Demand for technology remains strong as projects are mainly dedicated to reservoir optimization and near-field exploration.

    Beyond the core new businesses activity is improving with commercial bids related to beyond the core representing more than 10% of total Geoscience bids pending at the end of September.

    • Multi-Client revenue was $92 million, up 26% year-on-year and up 149% sequentially.

    Multi-client cash capex was $(57) million this quarter, stable year-on-year and dedicated to marine multi-client programs only. In Q3 we had three vessels working on multi-client programs, two on a five-month 3D multi-client program in the Norwegian North Sea and one in Brazil on our  on-going Nebula project. We also had 5 reprocessings projects this quarter including a new one in the US Gulf of Mexico.

    Prefunding revenue of our multi-client projects was $59 million, up 51% year-on-year and prefunding rate was 103%.

    Multi-client after-sales were at $32 million this quarter, down (4)% year-on-year.

    The segment library Net Book Value was $311 million ($556 million after IFRS 15 adjustments) at the end of September 2021, split 89% offshore and 11% onshore.

    GGR segment EBITDAs was $106 million, a strong 63% margin, and GGR Adjusted* segment EBITDAs was $107 million.

    GGR segment operating income was $30 million.

    GGR capital employed decreased to $1.6 billion at the end of September 2021.

     

    Equipment

    Equipment
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Segment revenue50101105%
        Land314028%
        Marine1555
        Downhole gauges2228%
        Non Oil & Gas3452%
      Segment EBITDAs(1)17
      EBITDAs margin(1%)17%18 bps
      Segment operating income(9)9
      OPINC Margin(18%)9%27 bps
      Capital employed (in billion $)0.60.6
      Supplementary information   
      Adjusted segment EBITDAs before NRC(0)17
      EBITDAs margin(0%)17%17 bps
      Adjusted segment OPINC before NRC(9)9
    OPINC margin(17)%9%26 bps
    EquipEOment
    In million $
    2020
    Q3
    2021
    Q3
    Variances %

     

    Equipment segment revenue was $101 million, up 105% year-on-year and up 113% sequentially.

    • Land equipment sales were $40 million, i.e. 40% of total sales, as we delivered in China, Russia, North Africa and India.
    • Marine equipment sales were $55 million, representing 54% of total sales, due to scheduled delivery of 18,000 GPR300 nodes.
    • Downhole equipment sales were $2 million and sales of non Oil & Gas equipment were $4 million with first commercial project for S-scan railtrack monitoring solution.

    Equipment segment EBITDAs was $17 million, a 17% margin.

    Equipment segment operating income was $9 million, a 9% margin.

    Equipment capital employed stabled at $0.6 billion at the end of September 2021.

     

    Third Quarter 2021 Financial Results

    Consolidated Income Statements
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Exchange rate euro/dollar1.171.192%
      Segment revenue19927035%
      GGR15016812%
      Equipment50101105%
      Elim & Other(1)(0)
      Segment Gross Margin2763137%
      Segment EBITDAs52118126%
      GGR8510726%
      Equipment(0)17
      Corporate(5)(5)
      Elim & Other1(1)
      COVID-19 plan(28)(0)
      Segment operating income(38)33186%
      GGR1030
      Equipment(9)9
      Corporate(6)(5)10%
      Elim & Other1(2)
      Non recurring charges(34)(1)98%
      IFRS 15 adjustment(5)(13)
      IFRS operating income(43)20
      Equity from investments
      Net cost of financial debt(34)(27)21%
      Other financial income (loss)(4)(0)99%
      Income taxes1(7)
      NRC (Tax & OFI)(8)
      Net income / (loss) from continuing operations(88)(14)84%
      Net income / (loss) from discontinued operations(5)(3)44%
      IFRS net income / (loss)(93)(17)82%
      Shareholder’s net income / (loss)(93)(17)82%
      Basic Earnings per share in $(0.13)(0.02)82%
      Basic Earnings per share in €(0.11)(0.02)82%

    Segment revenue was $270 million, up 35% year-on-year and up 71% sequentially. The respective contributions from the Group’s businesses were 28% from Geoscience, 34% from Multi-Client (62% for the GGR segment) and 38% from Equipment.

    Segment EBITDAs was $118 million, up 126% year-on-year, a solid 44% margin and Adjusted* segment EBITDAs was $118 million, up 47% year-on-year.

    Segment operating income was $33 million up 186% year-on-year, a 12% margin and Adjusted* segment operating income was $33 million.

     

     

    IFRS 15 adjustment at operating income level was $(13)million and IFRS operating income, after IFRS 15 adjustment, was $20 million.

    Cost of financial debt was $(27) million.

    Taxes were at $(7) million.

    Net loss from continuing operations was $(14) million.

    Q3 2021 Discontinued operations : Correspond to the former Contractual Data Acquisition and Non-Operated Resources segments. Main aggregates are as follows:

    Revenue from discontinued operations was $0 million.

    Net loss from discontinued operations was $(3) million.

    Net Cash flow from discontinued operations was $(15) million.

    Group net loss was $(17) million.

    After minority interests, Group net loss attributable to CGG shareholders was $(17) million/ €(15) million.

      

    Third Quarter 2021 Cash Flow

    Cash Flow items
    In million $
    2020
    Q3
    2021
    Q3
    Variances %
      Segment Operating Cash Flow1276
      CAPEX(71)(73)2%
       Industrial(5)(8)47%
       R&D(8)(7)(7)%
       Multi-Client (Cash)(58)(57)(1)%
          Marine MC(56)(57)1%
          Land MC(2)(0)(74)%
       Proceeds from disposals of assets(0)(1)
      Segment Free Cash Flow(59)2
      Lease repayments(15)(14)(4)%
      Paid Cost of debt(7)(0)(96)%
      Plan 2021(19)(7)(64)%
      Free cash flow from discontinued operations7(15)
      Net Cash flow(92)(34)63%
      Financing cash flow(5)(2)(60)%
      Forex and other16(9)
      Net increase/(decrease) in cash(81)(45)44%
      Supplementary information   
    Change in working capital and provisions,             included in Segment Operating Cash Flow(37)(48)30%
    From severance cash costs(7)(5)28%
    Segment Free Cash Flow before severance cash costs(52)7113%

    Segment Operating Cash Flow was $76 million.

    Total capex was $(73) million:

    • Industrial capex was $(8) million,
    • Research & Development capex was $(7) million,
    • Multi-client cash capex was $(57) million

    Segment Free Cash Flow was $2 million.

    Net Cash Flow was $(34) million, after $(14) million lease repayments, $(0) million paid cost of debt, $(7) million 2021 Plan cash costs and $(15) million free cash flow from discontinued operations

     

    9 months 2021 Financial Results

    Consolidated Income Statements
    In million $
    YTD September 2020YTD September 2021Variances %
      Exchange rate euro/dollar1.121.207%
      Segment revenue672640(5)%
      GGR492379(23)%
      Equipment18326243%
      Elim & Other(2)(1)66%
      Segment Gross Margin12489(28)%
      Segment EBITDAs243195(20)%
      GGR289187(35)%
      Equipment925
      Corporate(17)(13)23%
      Elim & Other(0)(6)
      COVID-19 plan(38)2
      Segment operating income(122)14
      GGR6626(60)%
      Equipment(15)1
      Corporate(19)(16)18%
      Elim & Other(0)(6)
      Non recurring charges(154)9
      IFRS 15 adjustment7(9)
      IFRS operating income(115)5
      Equity from investments
      Net cost of financial debt(100)(94)(5)%
      Other financial income (loss)3(42)
      Income taxes(28)(19)(32)%
      NRC (Tax & OFI)(53)
      Net income / (loss) from continuing operations(293)(150)49%
      Net income / (loss) from discontinued operations(45)2
      IFRS net income / (loss)(338)(148)56%
      Shareholder’s net income / (loss)(340)(150)56%
      Basic Earnings per share in $(0.48)(0.21)56%
      Basic Earnings per share in €(0.43)(0.21)56%

     

    Segment revenue for the first 9 months 2021 was $640 million, down (5)% compared to last year. The respective contributions from the Group’s businesses were 34% from Geoscience, 25% from Multi-Client (59% for the GGR segment) and 41% from Equipment.

    GGR segment revenue was $379 million, down (23)% year-on-year

    • Geoscience revenue was $216 million, down (15)% year-on-year
    • Multi-Client sales reached $163 million, down (32)% year-on-year. Prefunding revenue was $92 million, down (36)% year-on-year. Multi-Client cash capex was $(131) million, down (34)% year-on-year. Cash prefunding rate was 70%.

    After-sales were $71 million, down (26)%.

    Equipment revenue was $262 million, up 43% year-on-year.

    Segment EBITDAs was $195 million, down (20)% year-on-year, a 31% margin. GGR EBITDA margin due to low H1 activity. GGR EBITDA margin was 49% and Equipment EBITDA margin was 9%.

    Segment operating income was $14 million.

    IFRS 15 adjustment at operating income level was $(9) million and IFRS operating income, after IFRS 15 adjustment, was $5 million.

    Cost of financial debt was $(94) million. The total amount of interest paid at the end of September was $(37) million.

    Other Financial Items were $(42) million, including $(40) million of fees related to the refinancing.

    Taxes were at $(19) million.

    Net income from continuing operations was $(150) million.

    YTD September Discontinued operations :

    Correspond to the former Contractual Data Acquisition and Non-Operated Resources segments. Main aggregates are as follows:

    -Revenue from discontinued operations was $19 million.

    Net income from discontinued operations was $2 million.

    Net Cash flow from discontinued operations was $(14) million.

    Group net loss was $(148) million.

    After minority interests, Group loss attributable to CGG’s shareholders at the end of September 2021 was $(150) million / €(125) million. 

    Cash Flow

    Cash Flow items
    In million $
    YTD September 2020YTD September 2021Variances %
      Segment Operating Cash Flow238235(1)%
      CAPEX(248)(172)(31)%
       Industrial(18)(17)(3)%
       R&D(32)(24)(26)%
       Multi-Client (Cash)(198)(131)(34)%
          Marine MC(169)(130)(23)%
          Land MC(29)(1)(95)%
       Proceeds from disposals of assets(0)(4)
      Segment Free Cash Flow(9)59
      Lease repayments(44)(44) 
      Paid Cost of debt(47)(37)(21)%
      Plan 2021(69)(26)(63)%
      Free cash flow from discontinued operations17(14)
      Net Cash flow(152)(61)60%
      Financing cash flow(5)(69)
      Forex and other11(15)
      Net increase/(decrease) in cash(146)(146) 
      Supplementary information   
    Change in working capital and provisions,             included in Segment Operating Cash Flow(1)39
    From severance cash costs(11)(17)(53)%
    Segment Free Cash Flow before severance cash costs176

     

    Segment Operating Cash Flow was $235 million compared to $238 million for the 9 months of 2020, stable year-on-year.

    Capex was $(172) million, (31)% decrease year-on-year,

    • Industrial capex was $(17) million, (3)% decrease year-on-year,
    • Research & Development capex was $(24) million, (26)% decrease year-on-year,
    • Multi-client cash capex was $(131) million, (34)% decrease year-on-year.

    Segment Free Cash Flow was at $59 million compared to $(9) million in 2020.

    After the lease repayments of $(44) million, CGG 2021 Plan cash costs of $(26) million, Paid cost of debt of $(37) million and Free cash flow from discontinued operations of $(14) million, Group Net Cash Flow was $(61) million, compared to $(152) million for the 9 months of 2020.

    Refinancing impact on cash flow was $(69) million, including $(40) million refinancing fees and call premiums, and $(28) million net reduction in principal.

     

    Balance Sheet 

    Group’s liquidity amounted to $340 million at the end of September 30, 2021 and cash liquidity of $240m after reducing gross debt by $28m as part of refinancing.

     

    Group gross debt before IFRS 16 was $1,226 million at the end of September 30, 2021 and net debt was $987 million.

    Group gross debt after IFRS 16 was $1,353 million at the end of September 30, 2021 and net debt was $1,113 million.

    Segment leverage ratio of Net debt to Adjusted segment EBITDAs was 3.5x at the end of September 2021.

     

    Q3 2021 Conference call

    • The press release and the slide presentation are available on our website cgg.com
    • An English language analysts conference call is scheduled today at 6.30 pm (CET)

    To follow the conference call, please access the audio webcast from your computer at www.cgg.com

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