First Quarter 2020 Results

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High Vessel Utilization - Challenging outlook

View results | View presentation | Audio webcast | Audio webcast (Youtube)

Takeaways Q1 2020

  • Segment Revenues of $168.3 million, compared to $141.9 million in Q1 2019
  • Segment EBITDA of $80.5 million, compared to $66.6 million in Q1 2019
  • Segment EBIT (excluding impairments and other charges) loss of $15.8 million, compared to a loss of $29.3 million in Q1 2019
  • Contract revenues of $85.4 million, compared to $44.3 million in Q1 2019
  • Cash flow from operations of $176.0 million, compared to $119.4 million in Q1 2019 
  • As reported revenues according to IFRS of $128.8 million and an EBIT loss of $80.2 million, after impairments of $51.4 million, compared to $129.3 million and EBIT loss of $42.5 million, respectively, in Q1 2019
  • Successful completion of refinancing and equity raise
  • Implementing cost and CAPEX reduction to address an uncertain market outlook

“High vessel utilization and good operational performance secured solid contract revenues in Q1 2020. Our MultiClient business entered the quarter with a solid project pipeline. However, it has been difficult to secure more commitments to ongoing projects and conclude MultiClient data library sales processes due to the Covid-19 pandemic and the oil price reduction. Further, MultiClient revenues were negatively impacted by delays of Government block awards, where specifically pre-funding for one of our ongoing MultiClient projects is contingent on final block ratification.

The low oil price has led energy companies to scale back near term investment plans significantly, and 2020 will be very challenging for the seismic industry. We are adjusting our vessel capacity to the lower demand by cold-stacking two vessels now in Q2, and we expect to warm-stack one additional vessel in Q3. Going forward, further capacity reductions will be continuously evaluated, and we are prepared to react quickly.

We are reducing cost and capital expenditures significantly. In addition to the vessel adjustments, our cost reduction will comprise of a combination of temporary lay-offs, cancellation of 2020 bonus plans, salary freeze and numerous other cost initiatives as we adjust to a lower activity level. Our full year gross cash cost will reduce by at least $100 million, with further measures being considered depending on market development, compared to our initial 2020 guidance. Capital expenditures will be reduced by at least $30 million, with investments relating to items we consider strategically important or critical for business continuity.

We completed a successful refinancing at the start of the year. With a strong positive cash flow in Q1, we have further reduced net interest bearing debt by $130.0 million and increased the liquidity reserve to $266.9 million. Our efforts to reduce cost and capital expenditures aim at being cash flow positive before debt repayments going forward. However, in order to maintain a strong liquidity position while experiencing uncertain market conditions, we are reviewing alternatives to preserve our liquidity including potential extensions of the scheduled reduction of our revolving credit facility, amortization holidays and other debt related initiatives.”

Rune Olav Pedersen,
President and Chief Executive Officer


PGS expects the revised and lower investment plans among energy companies to significantly reduce demand for seismic services in 2020, and likely into 2021. The Company believes the extreme imbalances in the oil market are temporary. When the pandemic crisis is over, energy consumption will resume with oil and gas continuing to play a key role in the energy mix. Offshore reserves will be vital for future supply and support the demand for marine seismic services. The expected future recovery of the seismic industry is likely to be strengthened further by another round of industry capacity reductions and a pent-up exploration and production demand.

Based on current operational projections, with six vessels in operation in the third quarter and five vessels in operation for the remaining part of 2020, and with reference to disclosed risk factors, PGS expects full year 2020 gross cash costs to be below $500 million.

2020 MultiClient cash investments are expected to be $150-200 million.

Approximately 50% of 2020 active 3D vessel time is currently expected to be allocated to MultiClient acquisition.

Capital expenditure for 2020 is expected to be below $50 million.

The order book totaled $217 million at March 31, 2020 (including $89 million relating to MultiClient). The order book was $322 million at December 31, 2019 and $238 million at March 31, 2019.




Consolidated Key Financial Figures
(In USD millions, except per share data)

Quarter ended
March 31,

Year ended
December 31,



Profit and loss numbers Segment Reporting      
Segment Revenues 168.3 141.9 880.1
Segment EBITDA 80.5 66.6 556.1
Segment EBIT ex. Impairment and other charges, net (15.8) (29.3) 96.4
Profit and loss numbers As Reported      
Revenues 128.8 129.3 930.8
EBIT (80.2) (42.5) 54.6
Share of results from associated companies (26.0) (3.8) (20.1)
Net financial items, other (9.1) (18.2) (72.1)
Income (loss) before income tax expense (115.3) (64.5) (37.6)
Income tax expense (2.2) (0.6) (34.1)
Net income (loss) to equity holders (117.5) (65.1) (71.7)
Basic earnings per share ($ per share) (0.32) (0.19) (0.21)
Other key numbers As Reported:      
Net cash provided by operating activities 176.0 119.4 474.3
Cash Investment in MultiClient library 67.6 62.1 244.8
Capital expenditures (whether paid or not) 12.3 11.6 59.1
Total assets 2,335.9 2,497.6 2,301.7
Cash and cash equivalents 266.9 90.4 40.6
Net interest bearing debt 876.5 1,051.7 1,007.5
Net interest bearing debt, including lease liabilities following IFRS 16 1,052.5 1,282.9 1,204.6

A complete version of the Q1 2020 earnings release and presentation can be downloaded from and

The Q1 2020 audio cast can be accessed from this link:!/hegnarmedia/20200423_5

Bård Stenberg, SVP IR & Communication
Mobile:  +47 99 24 52 35

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 and the PGS share is listed on the Oslo stock exchange (OSE: PGS). For more information on PGS visit

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 2019 and the Q1 2020 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.

Contact Investor Relations

You are welcome to send us an email or call Bård Stenberg VP IR & Corporate Communications: +47 992 45 235