PARIS, France – March 8th 2019 – CGG (ISIN: FR0013181864 – NYSE: CGG), world leader in Geoscience, announced today its 2018 fourth quarter and full-year unaudited results.
From Q4 2018, CGG applied the following accounting changes:
1Segment figures presented before IFRS 15 and Non-Recurring Charges (NRC)
Commenting on these results, Sophie Zurquiyah, CGG CEO, said:“As the market continues its gradual recovery, CGG in its new profile delivered excellent 2018 operating results, which were above expectations. Our Geoscience, Multi-Client and Equipment businesses generated $134m of segment free cash flow validating our strategic decision to refocus the Company on its high value-add and profitable businesses.
CGG enjoys a leading technology position in Geoscience and Equipment, and as a result of our sustained investments in R&D during the downturn, we anticipate a solid pipeline of new products and innovative solutions to continue to generate strong returns in 2019 and beyond. As we enter 2019, we expect the Group to grow in line with market trends and remain focused on generating cash and are on track to deliver our 2021 plan.”
Following the strategic plan announced on Nov. 7, 2018 and actions undertaken afterwards, Contractual Data Acquisition is accounted under IFRS 5 as discontinued operations and ‘assets held for sale’ and therefore is no longer included in Sales, EBITDAs, operating income and free cash flow. Previous periods have been restated accordingly for P&L and cash-flow statements (but not for the balance sheet).
Implementation of the CGG 2021 strategic plan must comply with the undertakings and requirements in the CGG safeguard plan and other applicable local legal requirements.
Change in Multi-Client four-year straight line amortization estimate
In line with industry standards, CGG applied prospectively a 4 year straight-line amortization for its Multi-Client library starting October 1, 2018. Total impact was an additional charge of $(94) million in Q4 2018, including $(57) million for the full amortization of surveys older than 4 years.
CGG implemented IFRS 15 on January 1, 2018 with a modified retrospective application. The only change compared to Group historical practices is related to multi-clients prefunding revenues. These prefunding revenues are recorded at delivery of the final data while they were historically recorded based on percentage of completion. For internal reporting purposes, CGG continues using historical method with prefunding revenues recorded based on percentage of completion.
CGG, as other seismic players, presents then a dual approach in the Group’s results including: one set of figures (the “IFRS” figures) with prefunding revenue recognized in full only upon delivery of the final data and a second set of figures (the “Segment figures”) produced in accordance with the Group’s historical method, which correspond to the figures used for internal management reporting purposes and provide comparative information during the year 2018.
CGG will implement IFRS 16 starting January 1, 2019 with a modified retrospective application. Therefore, the cumulative effect of adopting IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings on January 1, 2019, with no restatement of comparative information.
An English language analysts’ conference call is scheduled today at 8:30 am (Paris time) – 7:30 am (London time)
To follow this conference, please access the live webcast:
From your computer at:
From your mobile phone or tablet:
A replay of the conference will be available via the webcast on CGG website at: www.cgg.com or via the QR code attached above.
For analysts, please dial 5 to 10 minutes prior to the scheduled start time the following numbers:
Download Full Press Release (PDF)
Download Presentation (PDF)
The operating procedure of the Board is governed by the Internal Rules and Regulations of the Board of Directors.
A solid governance structure and clear governance practices ensure that CGG has strong strategic focus.
Contacts for further information regarding investors.
Access all of CGG's Quarterly and Full Year Results.