Naersnes, Norway, October 18th, 2002, - TGS-NOPEC Geophysical Company (OSLO:TGS) today announced that its 3rd Quarter financial results will fall short of market expectations primarily due to weaker than expected late sales of seismic and well log data from its multi-client library in all geographic markets. Consolidated Net Revenues for the quarter are now expected to be approximately US $21 million (NOK 160 million) compared to US $30.6 million (NOK 275 million) in the same quarter one year ago and the Company's previous guidance for the quarter of US $33 million (NOK 250 million). EBIT margin before non-recurring items is now expected to be approximately 26% for the 3rd Quarter and approximately 40% for the first nine months of 2002. The Company expects to report a marginal net profit for the quarter after recording the US $5 million non-cash, non-recurring write-down provision related to the previously announced restructuring of vessel capacity. This restructuring provides the Company with a higher degree of operational flexibility and an estimated $9 million cash savings on a go-forward basis.
Currently the 4th Quarter outlook indicates substantial improvement in sales compared to the 3rd Quarter, but as is usual in the multi-client sales business, visibility remains very low. Our customers remain extremely cautious about all expenditures in the current climate of global economic uncertainty. The Company now expects 4th Quarter Net Revenues to be approximately 25% below the same quarter one year ago, implying that full year 2002 Net Revenues will be 5-10% below 2001 levels on a US dollar basis. Management has implemented a substantial cost savings program including a 10% reduction in workforce.
Complete 3rd quarter financial results along with an update on the market outlook will be presented on November 7, 2002.
TGS-NOPEC is a leading global provider of multi-client geoscience data and associated products and services to the oil and gas industry. TGS-NOPEC specializes in the planning, acquisition, processing, interpretation and marketing of non-exclusive seismic surveys worldwide. A2D Technologies, a wholly owned subsidiary, pioneered the delivery of digital well log data over the Internet and currently offers a one-of-a-kind integrated solution for well log data sourcing, well log data management, and well log correlation. The TGS-NOPEC group places a strong emphasis on providing high-quality data and the highest level of service to the industry.
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. These include TGS-NOPEC's reliance on a cyclical industry and principal customers, the company's ability to continue to expand markets for licensing of data, and the company's ability to acquire and process data products at costs commensurate with profitability. Actual results may differ materially from those expected or projected. TGS-NOPEC undertakes no responsibility to update forward-looking statements.
For additional information about this news release please contact:
Arne Helland, CFO
Telephone: +47-31-29-20-00 / +47-91-88-78-29
John Adamick, VP Business Development
Telephone: +1 713-860-2102