ASKER, NORWAY (30 October 2019) - TGS today reported net proforma revenues* of USD 277 million for Q3 2019, a growth of 62% compared to USD 171 million in Q3 2018. The strong performance was mainly driven by improved sales momentum in Latin America and North America and includes transfer fees related to oil industry consolidation.
Operating profit* for Q3 2019 was USD 94 million, a growth of 201% compared to Q3 2018. The growth in net revenues is the main driver behind the stronger profitability, partly offset by an increase in operating costs due to higher result-linked bonus payments to employees and non-recurring costs related to the Spectrum acquisition, which was completed on 14 August 2019.
Although net cash flow was negative in the quarter due to settlement of debt in Spectrum and the repurchase of own shares, as well as an increase in net working capital, the cash balance at the end of the quarter remained solid at USD 265 million. The cash flow has been strong at the beginning of Q4 2019 and the cash balance currently stands at more than USD 350 million. In addition, the company has an undrawn credit facility of USD 100 million.
The acquisition of Spectrum is moving ahead as planned and USD 20 million in synergies has been identified and will be realized in 2020.
Kristian Johansen, CEO of TGS, stated, "TGS delivered solid sales in Q3 2019 despite falling oil prices and high oil price volatility during the quarter. I'm particularly pleased to see that we are continuing to see strong performance in the Latin America region, where the acquisition of Spectrum has further strengthened the company and positioned TGS to continue to benefit from improving market conditions. Additionally, our customers now have access to the industry's most comprehensive library of modern multi-client data, covering all the important mature and frontier basins worldwide."
Kristian Johansen and Dean Zuzic, CFO, will present the results on 30 October 2019 at 09:00 CET at the 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 (http://www.tgs.com).
* Pro forma figures, including Spectrum, for the whole quarter are 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 Q3 2019 report for statements prepared according to IFRS.
About TGS
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.
Forward-looking statements
All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of 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 principle customers, TGS' ability to continue to expand markets for licensing of data, and TGS' ability to acquire and process data products at costs commensurate with profitability. 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.
TGS-NOPEC Geophysical Company ASA is listed on the Oslo Stock Exchange (OSLO: TGS). TGS sponsored American Depositary Shares trade on the U.S. over-the-counter market under the symbol "TGSGY".
For more information, visit www.tgs.com or contact:
Dean Zuzic, Chief Financial Officer Tel: +47 41 43 35 60
Email: investor@tgs.com
To access TGS Q3 2019 results information, please use the web links below: