CGG announced today its second quarter 2021 non-audited results.

Commenting on these results, Sophie Zurquiyah, CGG CEO, said:
“During the first half of the year, the oil price environment has become more favorable. However, this has not translated yet into increase in geoscience-related spending by our customers. Considering the lack of investments by E&P companies, the need to increase spending, to better understand the subsurface and develop new opportunities, has continued to grow. Among our three businesses, Multi-client has been the most affected by the spending delays. Looking forward, following the soft first half of the year, activity is expected to strengthen in the second half of 2021 and onwards. With its high-end Geoscience and Equipment technologies, and superior quality Multi-client data in the world’s most attractive basins, CGG is well positioned to provide our clients with the solutions they require to increase the effectiveness of their activities, while meeting their ESG goals. In this environment, technology innovation, business diversification, and cash generation, remain our top priorities.”

Q2 2021: A soft quarter for Multi-client and Equipment

• IFRS figures: revenue at $172m, EBITDAs at $56m, OPINC at $(1)m
• Segment revenue at $157m, down (22)% year-on-year and down (26)% sequentially

• Geoscience segment revenue at $73 million, down (12) % year-on-year and up 11% sequentially
• Multi-Client segment sales at $37 million, including $20 million after-sales, down (40)% year-on-year and up 8% sequentially
• Equipment segment sales at $48 million, down (19)% year-on-year and down (58)% sequentially

• Segment EBITDAs at $42m and Adjusted* Segment EBITDAs at $35m, a 22% margin due to unfavorable revenue mix
• Segment Operating Income at $(7)m and Adjusted* Segment Operating Income at $(15)m
• Group Net loss at $(51)m
• Net Cash Flow at $(56)m before $(39)m of fees related to the refinancing

H1 2021: A soft semester

• IFRS figures: revenue at $380m, EBITDAs at $88m, OPINC at $(15)m
• Segment revenue at $370m, down (22)% year-on-year
• Segment EBITDAs at $78m and Adjusted* Segment EBITDAs at $75m, a 20% margin due to unfavorable revenue mix
• Segment Operating Income at $(18)m and Adjusted* Segment Operating Income at $(28)m
• Group Net loss at $(132)m divided by two year on year
• Net Cash Flow at $(27)m before $(39)m of fees related to the refinancing

Balance Sheet at the end of June

• The physical asset storage business of CGG has been put for sale
• The sale of the GeoSoftware business is progressing as planned with a closing expected in Q4 2021
• The sale and lease back of the headquarter building is progressing as planned with a closing expected in Q4 2021
• Liquidity of $385m and cash liquidity of $285m after reducing gross debt by $28m as part of refinancing. Net debt before IFRS 16 at $935m as of June 30, 2021

2021 Revised Financial Objectives

• CGG is expecting in 2021 a gradual recovery in Geoscience activity quarter after quarter, around 25% growth in Equipment sales year-on-year, Multi-Client cash capex of around $165 million with over 75% prefunding and lower than originally expected Multi-client after-sales, up year-on-year.
• CGG anticipates full year 2021 segment revenue to be flat year-on-year and segment EBITDAs to be around $310 million impacted by a slow recovery in multi-client data purchases, mainly by IOCs.
• The planned asset monetization and divestiture of businesses held for sale are progressing well and on track to close in Q4, which will allow CGG to generate positive net cash flow in 2021.

*Adjusted indicators represent supplementary information adjusted for non-recurring charges triggered by economic downturn.

KeyFacts Energy Industry Directory: CGG