First Quarter 2019 Results
Weak Q1 2019 Results - Full Year Intact
Highlights Q1 2019
As Reported revenues according to IFRS of $129.3 million and EBIT loss of $42.5 million, compared to $201.3 million and EBIT loss of $7.3 million in Q1 2018
Segment Revenues of $141.9 million, compared to $197.8 million in Q1 2018
Segment EBITDA of $66.6 million, compared to $92.3 million in Q1 2018
Segment EBIT, a loss of $29.3 million, compared to a loss of $22.7 million in Q1 2018
Total Segment MultiClient prefunding revenues of $30.0 million, with a corresponding prefunding level of 48%, compared to $58.6 million and 109% in Q1 2018
MultiClient late sales revenues of $60.9 million, compared to $83.5 million in Q1 2018
Cash flow from operations of $119.4 million, compared to $73.4 million in Q1 2018
Liquidity reserve of $205.4 million, an increase of $45.9 million, or 29%, compared to previous quarter
In process of completing sale of Ramform Sterling to JOGMEC, including a service agreement of up to 10 years with annual renewals. First part of sales price received in March 2019, net $44.6 million cash flow impact
Order book of $238 million, an increase of $75 million, compared to previous quarter
"Segment MultiClient prefunding revenues in Q1 2019 were impacted by an overweight of low prefunded surveys in the mix. This will reverse in the coming quarters, and the prefunding level for the full year 2019 is expected to be in the upper half of the targeted range 80-120%.
The order book increased by 46% in the first quarter. I am confident, based on the improved visibility for vessel utilization, MultiClient prefunding and contract revenues that we will be able to deliver a significant improvement in cash flow and profitability in 2019, compared to 2018.
Pricing for contract work booked to date is now more than 35% higher than the average rate in 2018. The price increase is a combination of a general market improvement, more 4D work and our ability to build an attractive project portfolio. The higher prices will primarily benefit our contract revenues in the second and third quarters."
Rune Olav Pedersen,
President and Chief Executive Officer
PGS expects significant cash flow generation among clients and an increase in exploration and production spending, including offshore spending, to contribute to further recovery of the marine seismic market fundamentals going forward. Contract seismic is likely the activity that will benefit most from the improvement, driven by more 4D acquisition and generally higher demand for new proprietary seismic data.
Based on current operational projections and with reference to disclosed risk factors, PGS expects full year 2019 gross cash costs of approximately $550 million. This number takes into account an approximately $50 million reduction from the implementation of IFRS 16 in 2019. See Note 16 for a description of the effects from implementation of IFRS 16.
2019 MultiClient cash investments are expected to be approximately $250 million.
More than 50% of 2019 active 3D vessel time is currently expected to be allocated to MultiClient acquisition.
Capital expenditure for 2019 is expected to be approximately $85 million, which includes the reactivation of Ramform Vanguard.
The order book totaled $238 million at March 31, 2019 (including $90 million relating to MultiClient). The order book was $163 million at December 31, 2018 and $211 million at March 31, 2018.
Consolidated Key Financial Figures
(In USD millions, except per share data)
| Year ended
|Profit and loss numbers Segment Reporting|
|Segment EBIT ex. Impairment and other charges, net||(29.3)||(22.7)||36.3|
|Profit and loss numbers As Reported|
|Net financial items||(22.0)||(22.3)||(87.3)|
|Income (loss) before income tax expense||(64.5)||(29.6)||(47.9)|
|Income tax expense||(0.6)||(10.4)||(40.0)|
|Net income (loss) to equity holders||(65.1)||(40.0)||(87.9)|
|Basic earnings per share ($ per share)||(0.19)||(0.12)||(0.26)|
|Other key numbers As Reported:|
|Net cash provided by operating activities||119.4||73.4||445.9|
|Cash Investment in MultiClient library||62.1||53.7||277.1|
|Capital expenditures (whether paid or not)||11.5||4.0||42.5|
|Cash and cash equivalents||90.4||38.4||74.5|
|Net interest bearing debt*||1,051.7||1,150.7||1,109.6|
|Net interest bearing debt, including lease liabilities following IFRS 16*||1,282.9|
*Following implementation of IFRS 16, prior periods are not comparable to March 2019.
|FOR DETAILS, CONTACT:|
Bård Stenberg, SVP IR & Communication
Phone: +47 67 51 43 16
Mobile: +47 99 24 52 35
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 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 2018. 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.