PGS: Q4-17 and FY-17 Results and CMD Presentation
- Revenues of $838.8 million, compared to $764.3 million in 2016
- EBITDA of $374.1 million, compared to $313.4 million in 2016
- EBIT, excluding impairments and other charges, a loss of $147.1 million, compared to a loss of $137.5 million in 2016
- Net loss of $523.4 million, impacted by impairments and other charges of $177.0 million related primarily to reorganization and ceasing activities that do not currently generate cash
- MultiClient pre-funding revenues of $299.4 million with a corresponding pre-funding level of 140%, compared to $242.3 million and 121% in 2016
- MultiClient late sales of $235.0 million, compared to $226.8 million in 2016
- Cash flow from operations of $281.8 million, compared to $320.9 million in 2016
- Liquidity reserve of $257.3 million at year-end 2017, compared to $271.7 million in 2016
- Ramform Hyperion delivered, the last new-build in a series of four Ramform Titan-class vessels
- Rune Olav Pedersen appointed new President & CEO
- Settled all ongoing disputes related to ISS Service tax for licensing of MultiClient data with the tax authorities of Rio de Janeiro
- Implemented a centralized, simplified and streamlined organization to reduce annual gross cash cost by more than $100 million
“We experienced a strong finish to our MultiClient sales from all regions in Q4, making the full year MultiClient performance an improvement from 2016. Our capitalized MultiClient investments ended at $213.4 million. We achieved a sales-to-investment ratio of close to 2.5 times, continuing on the positive trend from 2016 when the ratio for the year was 2.3 times.
The marine contract market was challenging in 2017 with significant seasonal swings. To address the continued difficult market fundamentals we implemented a centralized, simplified and streamlined organization in Q4, combined with improved flexibility for vessel and imaging capacity.
The reorganization has been executed according to plan and we commenced operating in the new organization from 1 January 2018. We are confident that we will reduce the full year gross cash cost by more than $100 million in 2018, compared to 2017, which together with lower capital expenditure should position us well to achieve our target of delivering positive cash flow after debt service this year.”
Rune Olav Pedersen,
President and Chief Executive Officer
Petroleum Geo-Services ASA (“PGS” or the “Company”) expects the higher oil price, improved cash flow among clients and unsustainable reserve replacement ratios to benefit the marine 3D seismic market fundamentals going forward. While the Company expects the market sentiment to improve during 2018, there is a risk that a market recovery will take some time. For this reason the Company is planning its cost and capital expenditures for 2018 targeting a positive cash flow post debt service in a flat market compared to 2017.
Based on the current operational projections and with reference to disclosed risk factors, PGS expects full year 2018 gross cash cost below $575 million.
2018 MultiClient cash investments are expected to be approximately $250 million.
More than 50% of the 2018 active 3D vessel time is expected to be allocated to MultiClient acquisition.
Capital expenditure for 2018 is expected to be approximately $50 million.
The order book totaled $135 million at December 31, 2017 (including $101 million relating to MultiClient), compared to $167 million at September 30, 2017 and $215 million at December 31, 2016. The Company has seen increased order intake in January and expects to be able to book and operate eight 3D vessels from Q2 2018 in accordance with its base 3D vessel operation plan.
Key Financial Figures
(In USD millions, except per share data)
| Quarter ended
| Year ended
| Year ended
|EBIT ex. impairment and other charges, net||(24.5)||(65.5)||(147.1)||(137.5)|
|EBIT as reported||(159.2)||(92.4)||(383.6)||(180.3)|
|Income (loss) before income tax expense||(191.5)||(118.7)||(468.1)||(262.8)|
|Net income (loss) to equity holders||(194.8)||(156.1)||(523.4)||(293.9)|
|Basic earnings per share ($ per share)||(0.58)||(0.61)||(1.55)||(1.21)|
|Net cash provided by operating activities||84.3||64.7||281.8||320.9|
|Cash investment in MultiClient library||54.0||47.8||213.4||201.0|
|Capital expenditures (whether paid or not)||23.4||28.7||154.5||208.6|
|Cash and cash equivalents||47.3||61.7||47.3||61.7|
|Net interest bearing debt||1,139.4||1,029.7||1,139.4||1,029.7|