ASKER, NORWAY (13 May 2020) – TGS today reported net segment revenues of USD 152 million for Q1 2020, a 3% decline compared to Q1 2019. The quarter saw solid pre-funding revenues driven by Latin America and North America onshore, while late sales were hurt by the COVID-19 crisis and the large oil price drop towards the end of the quarter.
At USD 125 million, EBITDA* in Q1 2020 came in 1% above Q1 2019 as a result of favorable development in operating costs.
TGS continues to deliver industry-leading Return on Average Capital Employed (ROACE) with 17% annual return as per the end of Q1 2020.
TGS’ balance sheet remains strong, with a cash holding of USD 248 million at 31 March 2020, allowing the Company to pay a dividend of USD 0.125 per share in Q2 2020, despite the challenging market conditions.
On 8 April 2020 TGS announced several measures in response to the market turmoil. The highlights are:
Cost reduction: Centralization of offices, a global salary freeze, temporary cessation of employee bonuses and right sizing of the organization leading to a 2020 cost base that is approximately 35% below the 2019 pro-forma numbers
Multi-client investments: 2020 guidance reduced to approximately USD 325 million from USD 450 million by postponing projects and reducing scope
Dividends: Q2 2020 dividend reduced to USD 0.125 per share from USD 0.375 per share in Q1 2020
“Q1 2020 was impacted by the COVID-19 crisis and the sharp drop in oil price. Protecting the health and safety of our employees at the same time as ensuring minimal disruption to the business have taken top priority, and in that regard, I’m extremely pleased with how the organization has performed during these challenging times. With the announced measures to protect cash flow the Company is well positioned to use the difficult market conditions to form the basis for further long-term value creation and continued industry-leading returns.”
CEO Kristian Johansen and CFO Fredrik Amundsen will host a conference call today at 1500 CEST to go through the results and answer questions. We encourage attendees to call in 5-10 minutes before 1500 CEST to ensure registration and access.
Telephone conference dial-in details:
Norway: +47 23963688
United Kingdom: +44 3333009262
USA: +1 8338230589
* Figures based on Segment reporting, where sales committed prior to completion of the project are recognized on a Percentage of Completion basis. Please refer to the full Q4 2019 report for statements prepared according to IFRS.
TGS-NOPEC Geophysical Company (TGS) provides multi-client geoscience data to oil and gas Exploration and Production companies worldwide. In addition to extensive global geophysical and geological data libraries that include multi-client seismic data, magnetic and gravity data, digital well logs, production data and directional surveys, TGS also offers advanced processing and imaging services, interpretation products, and data integration solutions.
For more information visit TGS online at www.tgs.com or contact:
Fredrik Amundsen, CFO
Tel.: +47 995 89 882
Sven Børre Larsen, EVP Strategy and M&A
Tel.: +47 909 43 673
Forward-looking statements and contact information
All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to several risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include TGS' reliance on a cyclical industry and principal customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data product at costs commensurate with profitability, as well as volatile market conditions, which have been exacerbated by the COVID-19 pandemic and the severe drop in oil prices. Actual results may differ materially from those expected or projected in the forward-looking statements. TGS undertakes no responsibility or obligation to update or alter forward-looking statements for any reason.