Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on CGG SA. We currently have 11 research reports from 1 professional analysts.
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Negotiating conversion of $1.9bn unsecured debt to equity
03 Mar 17
CGG is negotiating the conversion of its unsecured debt into equity and an extension of the secured debt maturities. The unsecured debt amounts to $1.9bn (mkt cap is €200m) and the terms of conversion are being discussed. In 2017, CGG expects operating results in line with 2016, while consensus expected an improvement. Cash flows will be less than in 2016 due to the lack in working capital improvements last year. The net debt at end-2016 stood at $2.3bn, in line with guidance. Q4 revenue was $328m (-44% yoy), below consensus estimates. The operating income came in at -$70m, missing consensus (at -$13m) and vs. +$63m in Q4 15. The net loss was $280m with $173m non-recurring (vs. -$256m in Q4 15 with $229m non-recurring). By division: - Equipment: revenue came in at $84m (-18% yoy; external sales -49%). The operating loss was $3m (vs. breakeven in Q4 15), improving from Q3 16 (a $10m loss) thanks to higher volumes and cost reductions; - Contractual data acquisition: revenue was $52m (-55% yoy); the division reported an operating loss of $52m (vs. -$53m in Q4 15); - GGR revenue was $230m (-40% yoy). The operating margin was 11% (vs. 37% in Q4 15). Guidance on MultiClient capex is at $250-300m (prefunding >70%) in 2017 and industrial capex at $75-100m.
Talks on debt restructuring
05 Jan 17
Lenders have accepted to disapply the maintenance covenants. CGG wishes to appoint an ‘ad hoc representative’ (mandataire ad hoc, a restructuring framework eligible when a company has not defaulted); this requires the agreement of creditors. Net debt at end-2016 should amount to $2,315m, ($2,304m in Q3), in line with guidance of below $2.4bn.
Evaluating alternatives to address the capital structure
08 Nov 16
Q3 revenue was $264m (-44% yoy), below consensus estimates. The operating income came in at -$39m, missing consensus (at -$21m) and vs. $4m in Q3 15. The net loss was $88m (vs. -$1,074m in Q3 15 with $967m non-recurring), also below consensus (at -$72m). By division: - Equipment: revenue was $54m (-48% yoy; external sales -65%). The operating loss was $10m (vs. a $5m profit in Q3 15) as activity was below breakeven, although the point has been lowered with the transformation plan; - Contractual data acquisition: revenue came in at $38m (-75% yoy; -84% in Marine); the division posted an operating loss of $13m (vs. -$24m in Q3 15); - GGR revenue was $193m (-15% yoy). The operating margin was 10% (vs. 21% in Q3 15). Non-operated resources, i.e. the cold-stacked vessels, cost $17m on EBIT (vs. $23m in Q2). Guidance 2016: - Net debt at <$2.4bn (confirming guidance since March); - Fleet coverage at 95% in Q4 (o/w 40% in MultiClient), 80% in Q1 17 (o/w around 30% to MultiClient); - MultiClient sales 2016 dependent on Q4 after-sales, pre-funding expected >80%.
Data Acquisition breaks even in Q2 but record low Equipment volumes
29 Jul 16
Q2 revenue, at $290m (-39% yoy), was well below consensus estimates, however the EBIT loss was smaller than expected (at $22m vs. $35m of consensus). The net loss was $79m (vs. -$61m in Q2 15), contained vs. consensus (at -$90m). By division: - Equipment: revenue came in at $44m (-58% yoy; external sales -63%), with volumes at an historical low (weak demand both in Land and Marine). The operating loss was $18m (vs. a $7m profit in Q2 15) as activity was below breakeven; - Contractual data acquisition: revenue was at $59m (-51% yoy; -74% in Marine); the business was at breakeven (vs. a $57m loss in Q2 15); - GGR revenue was $196m (-24% yoy), with a +74% qoq recovery in weak MultiClient. The operating margin was 15% (vs. 20% in Q2 15). Non-operated resources, i.e. the cold-stacked vessels, cost $22m on EBIT (vs. $27m in Q1). Guidance 2016: - Net debt at <$2.4bn (confirming the guidance in March and May); - Capex cut: industrial at $75-100m (vs. $100-125m), MultiClient at $300-350m (vs. $325-375m).
Q1 Equipment volumes slump, weak MultiClient; net debt guidance confirmed
03 May 16
Q1 revenue fell to $313m (-45% yoy), well below consensus estimates at $445m. The operating loss was $81m (vs. $18m profit in Q1 15). The net loss was $130m (vs. -$55m in Q1 15). By division: - Equipment: revenue was $73m (-42% yoy), impacted by low volumes. The operating loss was $11m (vs. nil in Q4 15; affected, as in Q4 15, by low volumes and a low-tech product mix); - Contractual data acquisition: revenue came in at $89m (-59% yoy; -66% in Marine); the operating loss was $34m; - GGR revenue was $164m (-31% yoy), with a weak MultiClient (-44% yoy, at $55m). The operating margin fell to 5% (vs. 20% in Q1 15). Non-operated resources, namely the cold-stacked vessels, cost $27m on EBIT. Guidance 2016: - Net debt at <$2.4bn (confirming guidance of March); - Transformation plan cash costs: $200m in 2016 and $100m afterwards; - Capex confirmed: industrial at $100-125m, MultiClient at $325-375m.
Targeting 2016 net debt below $2.4bn
03 Mar 16
Q4 revenue came in at $589m, broadly in line with consensus estimates. The operating income was $21m but the non-recurring items ($187m) brought in a $256m net loss. By division: - Equipment: revenue was $103m (-53% yoy); usually Q4 posts a seasonal rebound which was absent in 2015. The operating income was nil (affected by low volumes and product mix); - Contractual data acquisition: revenue came in at $114m (-45% yoy; -59% in Marine); the operating loss was $53m (due to Marine, while Land & multi-physics broke even); - GGR revenue was $385m (-21% yoy). The operating margin stood at 26%. Non-operated resources, namely the cold-stacked vessels, cost $14m on EBIT. Guidance 2016: - Net debt at <$2.4bn (lower than our estimate, $2.7bn); - Transformation plan cash costs: $200m in 2016 and $100m afterwards; - Capex: industrial at $100-125m, Multi-Client at $325-375m (around our current estimate); - GGR accounting for >60% of revenue, contractual data acquisition for <15%, equipment c. 25% (confirming management's Q3 view).
Strong trading leads to upgrades
22 Mar 17
On the back of today’s positive trading update and slightly upgraded profit forecasts for FY2017, FY2018 and FY2019 we have reviewed our DCF analysis. This has led to an increased DCF valuation per share of 1500p (from 1200p) which we have made our new target price (from 1200p). Both TFP and JC Paper have contributed to the upgrades shown in the table below as have favourable currency movements. With the potential for further upgrades due to capitalising 3DP costs to come we maintain our Add recommendation.
Small Cap Breakfast
21 Mar 17
First Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march. Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.
Bang to rights
21 Mar 17
Tullow unexpectedly announced a US$750m rights issue on Friday at a 45.2% discount to the previous close. While this step confirms our investment thesis, the scale of the discount and the timing look like a slap in the face for investors and/or indicative of a weaker financial position than we are modelling. We publish revised estimates to reflect the impact of the issue and cut our Target Price to 215p per share (from 245p). We maintain our Hold recommendation.
Panmure Morning Note 22-03-2017
22 Mar 17
Acacia Mining and Endeavour Mining confirmed merger talks have now ended with Endeavour claiming an inability to “create adequate value for Endeavour shareholders”, most likely, we believe, given the disappointing ruling from the Tanzanian government on copper-gold concentrate sales. We were positive on the merger and believed a credible London listed Pan-African producer capable of challenging Randgold, would have been established. We make no change to our Hold recommendation today, and expect the shares to be marked lower in early trade.