TGS reported net revenues of US$172 million in Q1 2015, compared to US$222 million in Q1 2014. Net late sales were weaker than anticipated at US$72 million, reflecting a deterioration in seismic demand as energy companies significantly reduced exploration spending. Record high cash flow from operations of US$260 million contributed to a cash balance of US$352 million at the end of the quarter.
1st Quarter Highlights
- Consolidated net revenues were US$172 million, compared to US$222 million in Q1 2014.
- Net late sales totaled US$72 million, down 48% from US$137 million in Q1 2014.
- Net pre-funding revenues were US$94 million, up 26% from Q1 2014, funding 58% of the Company's operational multi-client investments during Q1 (investments of US$163 million, up 26% from Q1 2014).
- Proprietary revenues were US$6 million, compared to US$11 million in Q1 2014.
- Operating profit (EBIT) was US$37 million (22% of net revenues), compared to US$94 million (42% of net revenues) in Q1 2014.
- Cash flow from operations was US$260 million, compared to US$221 million in Q1 2014.
- Earnings per share (fully diluted) were US$0.28, down from US$0.66 in Q1 2014.
"Net revenues in Q1 were lower than our expectations due to weaker late sales from the data library in all geographic regions. Demand for seismic data has significantly deteriorated over the first three months of 2015 and the outlook for improvement in the market remains quite uncertain. On a positive note, cash flow in Q1 was strong and the Company has a cash balance of US$352 million as of 31 March 2015. TGS continues to be uniquely positioned within our industry with a strong balance sheet combined with a flexible asset-light business model," TGS' CEO Robert Hobbs stated.
Adapted from press release by Joseph Green