ASKER, NORWAY (2 August 2018) - TGS reported net revenues of USD 158 million in Q2 2018, up 47% from Q2 2017. Operating profit for the quarter was USD 54 million (34% of net revenues), the highest quarterly operating profit in four years. TGS' strong cash flow generation continued with free cash flow of USD 55 million in the quarter, up from USD 12 million in Q2 2017, resulting in an increased cash balance of USD 338 million. Quarterly dividend will be maintained at USD 0.20 per share, up 33% from Q2 2017.
2nd Quarter Highlights - Segment Reporting
Consolidated net revenues were USD 158 million, up 47% from USD 108 million in Q2 2017
Net late sales totaled USD 136 million, up 73% from USD 79 million in Q2 2017
Net pre-funding revenues were USD 21 million, funding 37% of TGS' operational multi-client investments for the quarter
Operational multi-client investments were USD 56 million in addition to USD 4 million from risk sharing arrangements
Operating profit (EBIT) was USD 54 million (34% of net revenues), up 200% from USD 18 million (17% of net revenues) in Q2 2017
Cash flow from operations was USD 128 million, up from USD 53 million in Q2 2017
Free cash flow (after multi-client investments) was USD 55 million, up from USD 12 million in Q2 2017
Cash balance at 30 June 2018 was USD 338 million in addition to the undrawn USD 75 million Revolving Credit Facility
Earnings per share (fully diluted) were USD 0.45, up from USD 0.09 in Q2 2017
Quarterly dividend is maintained at USD 0.20 per share, up 33% from Q2 2017
Financial guidance for 2018 reiterated at:
New multi-client investments* of approximately USD 260 million
Additional multi-client investments expected from sales of existing surveys with risk sharing arrangements
Pre-funding of new multi-client investments* expected to be approximately 45-50%
*New multi-client investments excluding investments related to surveys with risk sharing arrangements
"TGS delivered an excellent financial result in Q2 2018 driven by strong late sales which were up 73% year-on-year. This helped TGS to achieve its highest quarterly operating profit in four years. The global multi-client seismic market has been on an improving trend for more than a year now. TGS's strong quarter was partly a result of high regional license round activity combined with a pick-up in activity related to acreage turnover and farm-ins particularly among independents and smaller E&P companies. These triggering events fluctuate from quarter to quarter, therefore short-term volatility continues to be high. However, TGS believes that, with oil price continuing well above the level budgeted by most E&P companies, additional funds may be available for exploration spending by our customers at the end of the year," TGS' CEO Kristian Johansen stated.
To access TGS Q2 2018 results information, please use the web links below:
Q2 2018 Presentation and Webcast Kristian Johansen (CEO) and Sven Børre Larsen (CFO) will present the results at 09:00 CEST at Felix Conference Center, Aker Brygge, Oslo, Norway. The presentation is open to the public and can be followed live on the internet at www.tgs.com.
The slides from the presentation will also be available in PDF format at both the TGS and Oslo Stock Exchange websites.
Q2 2018 Conference Call
CEO Kristian Johansen and CFO Sven Børre Larsen will host a conference call on 2 August 2018 at 15:00 CEST (09:00 EDT). Attendees may want to call 5-10 minutes before to ensure registration and access.
Norwegian attendees are invited to call +800 51084 or +47 2100 2610
International attendees are invited to call 800 358 6377 or + 44 (0)330 336 9105
US attendees are invited to call +1 800 239 9838 or +1 323-794-2551
Participants will need to quote the following confirmation code when dialing into the conference:7777090.
A Q&A session will follow a short introduction, based upon the presentation issued in the morning. To pose a question, please press *1.
A replay of the conference call will be available shortly after. To access replay of the TGS conference call: