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TGS releases 1Q20 results

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Oilfield Technology,

TGS has reported net segment revenues of US$152 million for 1Q20, a 3% decline compared to 1Q19.

The quarter saw solid pre-funding revenues driven by Latin America and North America onshore, while late sales were hurt by the Covid-19 crisis and the large oil price drop towards the end of the quarter.

At US$125 million, EBITDA in 1Q20 came in 1% above 1Q19 as a result of favourable development in operating costs.

The company had a cash holding of US$248 million at 31 March 2020, allowing the company to pay a dividend of US$0.125 per share in 2Q20, despite the challenging market conditions.

On 8 April 2020 TGS announced several measures in response to the market turmoil. The highlights are:

  • Cost reduction: Centralisation of offices, a global salary freeze, temporary cessation of employee bonuses and right sizing of the organisation leading to a 2020 cost base that is approximately 35% below the 2019 pro-forma numbers.
  • Multi-client investments: 2020 guidance reduced to approximately US$325 million from US$450 million by postponing projects and reducing scope.
  • Dividends: 2Q20 dividend reduced to US$0.125 per share from US$0.375 per share in 1Q20.

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