Fourth Quarter and Preliminary Full Year 2019 Results & CMD Presentation

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Highlights 2019

  • Segment Revenues of $880.1 million, compared to $834.5 million in 2018
  • Segment EBITDA of $556.1 million, compared to $515.9 million in 2018
  • Segment EBIT of $96.4 million, compared to $36.3 million in 2018
  • Contract revenues of $318.8 million, compared to $149.5 million in 2018
  • Segment MultiClient pre-funding revenues of $256.5 million, with a corresponding pre-funding level of 105%, compared to $282.4 million and 102% in 2018
  • Cash flow from operations of $474.3 million, compared to $445.9 million in 2018 
  • Order book of $322 million by year-end 2019, close to a doubling compared to year-end 2018
  • As reported revenues according to IFRS of $930.8 million and an EBIT of $54.6 million, compared to $874.3 million and $39.4 million, respectively, in 2018
  • Strong support for the Company’s refinancing which is in process to be completed in February

“The seismic market continued to strengthen during 2019, resulting in better vessel utilization and higher contract prices. Our strong position in the 4D market and integrated product offering accelerated our contract revenues and we achieved close to 40% higher pricing in 2019, compared to 2018. Higher project activity enabled us to continue operating eight vessels and generate additional value during the winter season. 

We experienced low MultiClient sales during the first half of the year, but performance substantially improved in the second half. The pre-funding level ended at 105% of capitalized MultiClient cash investments for the full year, and we managed to secure healthy sales in the fourth quarter from our geographically diverse MultiClient data library.

Our order book nearly doubled during 2019, compared to year-end 2018, improving visibility going into 2020. We expect seismic acquisition activity to continue to increase, supporting a further pricing increase for our services but not at the same pace as in 2019. Higher activity levels and a relentless focus on cost will position us well to improve cash flow further in 2020.

I am extremely pleased that we were able to secure and announce a favorable refinancing earlier in January. The refinancing and the related equity raise have been well received by all stakeholders.”

Rune Olav Pedersen,
President and Chief Executive Officer 

Outlook

PGS expects the solid cash flow generation among clients and increasing offshore spending to contribute to further improvement of the marine seismic market fundamentals.

Based on current operational projections, with eight vessels in operation through 2020, and with reference to disclosed risk factors, PGS expects full year 2020 gross cash costs to be approximately $600 million.

2020 MultiClient cash investments are expected to be in the range of $250-275 million.

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

Capital expenditure for 2020 is expected to be approximately $80 million.

The order book totaled $322 million at December 31, 2019 (including $112 million relating to MultiClient). The order book was $336 million at September 30, 2019 and $163 million at December 31, 2018.

 

 

Consolidated Key Financial Figures
(In USD millions, except per share data)
Quarter ended
December 31,
Year ended
December 31,
 

2019
 

2018
 

2019
 

2018
Profit and loss numbers Segment Reporting        
Segment Revenues 288.4 245.2 880.1 834.5
Segment EBITDA 194.1 154.5 556.1 515.9
Segment EBIT ex. Impairment and other charges, net 70.1 47.9 96.4 36.3
         
Profit and loss numbers As Reported        
Revenues 332.6 269.8 930.8 874.3
EBIT 54.2 26.3 54.6 39.4
Net financial items (25.7) (31.1) (92.2) (87.3)
Income (loss) before income tax expense 28.5 (4.8) (37.6) (47.9)
Income tax expense (17.8) (18.7) (34.1) (40.0)
Net income (loss) to equity holders 10.7 (23.5) (71.7) (87.9)
Basic earnings per share ($ per share) 0.03 (0.07) (0.21) (0.26)
         
Other key numbers As Reported:        
Net cash provided by operating activities 94.8 117.3 474.3 445.9
Cash Investment in MultiClient library 41.3 40.2 244.8 277.1
Capital expenditures (whether paid or not) 17.7 16.1 59.1 42.5
Total assets 2,301.7 2,384.8 2,301.7 2,384.8
Cash and cash equivalents 40.6 74.5 40.6 74.5
Net interest bearing debt* 1,007.5 1,109.6 1,007.5 1,109.6
Net interest bearing debt, including lease liabilities following IFRS 16* 1,204.6   1,204.6  

*Following implementation of IFRS 16, prior periods are not comparable to December 2019.

A complete version of the Q4 and preliminary full year 2019 earnings release and presentation can be downloaded from www.newsweb.no and www.pgs.com.

FOR DETAILS, CONTACT:

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 www.pgs.com.

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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.