CGG forecasts fourth quarter revenue of 1 million – 01/10/2023 at 08:42

CGG forecasts fourth quarter revenue of $321 million – 01/10/2023 at 08:42

(AOF) – Revenue from CGG Group activities in the fourth quarter of 2022 is expected to be around $321 million, up 48% sequentially and up 8% proforma year-on-year, supported in particular by strong after-sales in the Gulf of Mexico and Scandinavia and by larger equipment deliveries in December. The turnover of the group’s activities for the year 2022 should be around 931 million dollars, up 3% pro forma over one year.

The 2022 EBITDAs of the Group’s activities is expected to be higher than the company’s latest forecasts communicated on November 2.

CGG expects positive net cash flow of approximately $61 million in the fourth quarter of 2022, including proceeds from the disposal of the US Terrestrial Data Library and a slightly negative net cash flow of $4 million for the whole of the year 2022.

CGG forecasts available cash at end-December 2022 of $298 million, not including $100 million of undrawn revolving credit facilities (RCF).

At the end of December 2022, CGG forecasts net debt before IFRS 16 of around $859 million and net debt after IFRS 16 of around $951 million.

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Key points

– World leader in geosciences;

– Sales of $949 million, 80% of which come from the Geoscience branch and the rest from the Multi-client and equipment divisions;

– “People, data, technology” business model: sustainability of the group through positive self-financing whatever the market conditions thanks to “asset-light”, reinforcement in activities with strong self-financing generation, balance of balance sheet and availability and diversification in the energy transition;

– Split capital, Sophie Zurquiyah being general manager and Philippe Salle chairman of the 11-member board of directors;

– Balance sheet in the process of cleaning up with net debt reduced to $812 million, ie a leverage effect of 2.1 and $417 million in cash at the end of June.

Challenges

– 2025 strategy for transformation into a technology company, with leading positions in basement imaging, cloud, data mining, sensors and acquisition systems: annual revenue growth of 13%; turnover split between monitoring & observation for 37%, digital science for 35% and energy transition;

– Innovation strategy at the source of 30% of annual turnover, boosted by R&D accounting for 11% of turnover, focused on computing power;

– Environmental strategy with 2 deadlines, 2030 and 2050: 50% reduction in CO2 emissions (vs 2020) then total neutrality / increase in the rate of use of renewable energies to 50% then 100 (vs 30% in 2020) / efficiency of energy use / launch of credit facilities aligned with ESG criteria;

– Strengthening of the monitoring & observation division through the acquisition of Geocamp and the software activity of ION;

– Impact of investments in computing capacity and in “Beyond the care” activities (HPC & Cloud solutions, Data Hub) as well as partnerships in hydrogen and decarbonization.

Challenges

– Favorable impact of the resumption of exploration by oil companies;

– After a 14% increase in turnover, a return to operating profitability and a break-even net profit on 1

er

semester, 2022 objective: 10% revenue growth, operating margin of 39 to 40%, €310 million and industrial and R&D investments of around €70 million;

– Abolition of the dividend.

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