TGS record quarter

Following its update on 13 January, TGS now confirms net revenues of US$298 million in Q4 2014, up 10% from US$271 million in Q4 2013 and representing a record high for the Company. TGS achieved its 2014 guided revenues with full year net revenues of US$915 million, up 4% from US$883 million in 2013.

4th quarter highlights

• Consolidated net revenues were US$298 million, compared to US$271 million in Q4 2013.
• Net late sales totaled US$226 million, up 4% from US$218 million in Q4 2013.
• Net pre-funding revenues were US$62 million, up 44% from Q4 2013, funding 49% of the Company's operational multi-client investments during Q4 (investments of US$126 million, up 37% from Q4 2013).
• Proprietary revenues were US$9 million, compared to US$10 million in Q4 2013.
• Operating profit (EBIT) was US$47 million (16% of net revenues), compared to US$120 million (44% of net revenues) in Q4 2013. Following a decision to close the Reservoir Solutions business, TGS made an impairment in Q4 2014 of US$54.4 million (US$50.2 million after reversal of a related deferred tax liability recognised as tax income). Also, an impairment of US$9.5 million has been recognised related to a fair-value assessment of other non-current assets. Adjusted for the impairment costs, operating profit was US$111 million (37% of net revenues).
• Cash flow from operations was US$131 million, compared to US$215 million in Q4 2013.
• Earnings per share (fully diluted) were US$0.31, down from US$0.81 in Q4 2013.

Full year 2014 financial highlights

• Consolidated net revenues were US$915 million, up from US$883 million in 2013.
• Net late sales from the multi-client library totaled US$631 million, down 1% from US$638 million in 2013.
• Net pre-funding revenues were US$247 million, up 33% from 2013, funding 53% of the Company's operational multi-client investments during 2014 (investments of US$462 million, up 5% from 2013).
• Proprietary revenues were US$37 million, compared to US$59 million in 2013.
• Operating profit (EBIT) was US$295 million (32% of net revenues), compared to US$387 million (44% of net revenues) in 2013. Adjusted for the impairment costs related to the closure of the Reservoir Solutions business and the re-assessment of the fair value of other non-current assets, operating profit was US$358 million (39% of net revenues).
• Cash flow from operations was US$605 million compared to US$543 million in 2013, an increase of 11%.
• Earnings per share (fully diluted) were US$2.09, down from 2.59 in 2013.

"We are very pleased to announce a record fourth quarter and end of year 2014, which helped us to reach our annual guidance despite challenging market conditions. Q4 was marked by continued strong late sales from our high-quality data library and we set a new record for late sales in the quarter. For 2015, we expect continued downward pressure on exploration spending based on lower oil prices. TGS is entering into 2015 with a record high order backlog and will continue to capitalise on the asset-light business model and strong balance sheet," TGS' CEO Robert Hobbs stated.

Adapted from press release by Joe Green

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