Continued Earnings Growth
May 10, 2007: OSLO, NORWAY - Petroleum Geo-Services ASA ("PGS" or the "Company") (OSE and NYSE: PGS) today announced its unaudited first quarter 2007 results under IFRS.
Best quarterly result ever: Operating profit of $119.5 million, up 15.5 million (15%) compared to Q1 2006. Revenues of $352.5 million, up $41.6 million (13%)
Marine: Operating profit of $114.2 million in Q1 2007, up $12.6 million (12%) from Q1 2006 driven by improved contract margins
Onshore: Operating profit of $12.3 million in Q1 2007, up $2.7 million (28%) from Q1 2006, positively impacted by increased multi-client activity and good performance of arctic crews
Distribution to shareholders: Share buy back program commenced in January 2007 and the Company has bought back shares to the value of $49.2 million during the quarter. Board will recommend a special dividend of NOK 10 per share (for approval on the annual general meeting)
Major new franchise: Entered into a Heads of Agreement for sale of Ramform Victory and continued technical and operational support by PGS to Japanese Ministry of Economy, Trade and Industry ("METI")
Key figures (IFRS)1
|
|
Quarter ended
March 31, |
Year ended December 31, 2006
Unaudited |
|
(In millions of dollars, except per share data) |
2007
Unaudited |
2006
Unaudited |
|
Revenues |
$ 352.5 |
$ 310.9 |
$ 1,308.4 |
|
Operating profit/EBIT |
119.5 |
104.0 |
359.5 |
|
Income before income tax expense (benefit) |
118.1 |
88.7 |
310.9 |
|
Net income to equity holders |
98.3 |
85.0 |
394.7 |
|
Earnings per share ($ per share) |
0.55 |
0.47 |
2.19 |
|
Adjusted EBITDA (as defined) |
184.5 |
134.4 |
614.3 |
|
Net cash provided by operating activities |
117.3 |
72.7 |
575.8 |
|
Cash investment in multi-client library |
57.8 |
10.1 |
120.7 |
|
Capital expenditures |
34.3 |
19.4 |
165.4 |
|
Total assets (period end) |
1,374.9 |
2,085.5 |
1,369.3 |
|
Cash and cash equivalents (period end) |
80.1 |
123.7 |
124.0 |
|
Net interest bearing debt (period end) |
$ 220.9 |
$ 797.2 |
$ 190.3 |
[1] Following the completion of the demerger and public offering of Petrojarl on June 29, 2006, the Key figures reflects, for all periods presented, a presentation of the operations of the Production segment and the gain from sale of Petrojarl shares, as discontinued operations. Total assets include Production assets up to date of the demerger.
Svein Rennemo, PGS President and Chief Executive Officer, commented:
"We have experienced a further market upturn and improving prices for our services. Our streamer contract EBIT margin was around 50% in Q1 2007, and with strength visible in all regional markets. In light of the strong demand elsewhere, we will use less seismic capacity in the North Sea this season as compared to last year. Looking further ahead, bidding activity for the 2008 North Sea season has already started, around three months earlier than last year, indicating for the present sustained tight market outlook for seismic acquisition capacity.
During the quarter we entered into a ground breaking Heads of Agreement with the Japanese Ministry of Economy, Trade and Industry, which involves a sale of the seismic vessel Ramform Victory in Q4 2007 and an exclusive service agreement for a project expected to last for up to 10 years. The agreement is recognition of our unique position in marine seismic acquisition.
We expect increased demand for more advanced seismic technologies going forward. Accordingly, PGS is now launching initiatives to raise the bar for seismic acquisition even further. We are bringing the Next Generation Streamer Technology to the market, which represents a breakthrough in improving quality of seismic data and efficiency of acquisition. Additionally, the Q3 installation of a permanent fiber optic 4D4C system in the Gulf of Mexico for one of the Majors confirms that we are a leader in the emerging market of reservoir monitoring through fiber optic technology.
Share buy backs in the first quarter amounted to 1.2% of our outstanding share capital. In addition, our Board of Directors has approved a proposal to be put to our annual general meeting in June to pay a special dividend of NOK 10 per share, or NOK 1.8 billion in total. I am very satisfied that PGS currently is able to combine substantial investments in growing our business with substantial shareholder return."
Q1 Highlights
PGS group
Operating profit of $119.5 million, up $15.5 million (15%) from Q1 2006
Income before income tax expense (benefit) of $118.1 million, up $29.4 million (33%) from Q1 2006
Net income to equity holders of $98.3 million, up $13.3 million (16%) from Q1 2006
Cash flow from operations of $117.3 million, up $44.6 million from Q1 2006
Investments in multi-client library of $57.8 million, up $47.7 million from Q1 2006
Capital expenditures of $34.3 million, compared to $19.4 million in Q1 2006
Net interest bearing debt of $220.9 million at March 31, 2007, up $30.6 million in Q1, primarily due to the repurchase of Company shares combined with the higher level of multi-client cash investments and capital expenditures
$49.2 million used to purchase own shares
Marine
Operating margin for Marine contract seismic was at an all time high at around 50% compared to around 40% in Q1 2006
Contract seismic revenues of $160.9 million, down $22.5 million (12%) from Q1 2006. Significant improvement in contract prices and margins was more than offset by a reduction of capacity used for contract acquisition from 87% in Q1 2006 to 57% in Q1 2007
Multi-client revenues of $92.2 million, up $36.7 million (66%) from Q1 2006 due to increased multi-client investment activity at higher levels of pre-funding (ratio of 124% of capitalized cash investment in Q1 2007 compared to 65% in Q1 2006)
Operating profit of $114.2 million, up $12.6 million (12%) from Q1 2006
Capital expenditures of $31.4 million, up $14.4 million compared to Q1 2006
Order backlog at March 31, 2007 of $533 million compared to $512 million at December 31, 2006. The backlog number includes $133 million of committed pre-funding on scheduled multi-client projects
Onshore
Revenues were at an all time high of $81.5 million, up $19.0 million (30%) from Q1 2006
Operating profit of $12.3 million, up $2.7 million (28%) from Q1 2006
Performance improvement driven mainly by Alaska activity and increased multi-client pre-funding revenues
Order backlog at March 31, 2007 of $135 million compared to $138 million at December 31, 2006
Outlook 2007
Marine
Full year streamer contract EBIT margins are expected to increase substantially from 2006 levels to around 50-55%
Multi-client revenues are expected to be higher than 2006
Multi-client cash investments are expected to be approximately $170-190 million, an approximate doubling of the 2006 investment level
Capital expenditure is expected to be approximately $200 million
Onshore
Revenues and operating profit expected to be approximately in line with 2006, with Q2 negatively impacted by two North Africa crews expected to relocate to new projects and lower seasonal activity in Alaska and Canada
Multi-client cash investments are planned to be approximately $60 million
Capital expenditure is expected to be in the range of $20-25 million
Ola Bøsterud
Phone +47 67 52 64 00
Mobile: +47 90 95 47 43
Christopher Møllerløkken
Phone: +47 67 51 43 16
Mobile: +47 90 27 63 55
US Investor Services
Katrina Parrott
Phone: +1 281 509 8000
