OSLO, Norway (8 July 2021) - Based on preliminary reporting from operating units, TGS management expects net IFRS revenues* for the second quarter of 2021 to be approximately USD 65 million, compared to USD 66 million in Q2 2020. Net segment revenues* are expected to be approximately USD 54 million, compared to USD 96 million in Q2 2020.
Kristian Johansen, CEO at TGS, commented: “As described in the Q1 2021 report, the market conditions for multi-client seismic data continues to be very challenging, and there are no signs of substantial improvements in the near-term. However, based on dialogue with our largest customers we remain confident that we will ultimately see a recovery of the market. Meanwhile, our asset-light business model, robust balance sheet and strong cash flow enable us to take advantage of strategic opportunities, both in the subsurface data area and in the New Energy Solutions segment.”
TGS will report the Q2 2021 financial results on 22 July 2021.
* Following recent notification from The Financial Supervisory Authority of Norway (Finanstilsynet) TGS will from 2021 increase emphasis on IFRS in its financial reporting to the market. The Company will continue to provide segment information for historic comparison and as alternative performance measures of the business as such measures are commonly used throughout the industry, and TGS' management believes they better reflect the ongoing activity in projects- in-progress. The main difference between IFRS and Segment reporting relates to revenue recognition. Under IFRS revenue recognition generally is deferred until project completion and delivery to the customer when performance obligations are met. Under Segment reporting, net revenue from projects-in-progress is recognized based on Percentage of Completion (POC). Revenue recognition has subsequent effects on the recognition of amortization of the multi-client library. Please see annual report for a complete description of the Company's accounting principles.
Adjustments between preliminary IFRS and Segment revenue numbers for Q2 2021:
Preliminary IFRS reported revenue: USD 65 million
- Revenue recognized from performance obligations met during Q2 for completed projects: USD 36 million
+ Revenue recognized under POC during Q1: USD 25 million
= Preliminary net segment reported revenue: USD 54 million
TGS provides scientific data and intelligence to companies active in the energy sector. In addition to a global, extensive and diverse energy data library, TGS offers specialized services such as advanced processing and analytics alongside cloud-based data applications and solutions
Forward Looking Statement
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 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.
For more information, contact:
Sven Børre Larsen
+47 90 94 36 73