TGS announces Q4 2016 Results and 2017 Guidance at Capital Markets Day

Written by TGS | 02 February 2017

ASKER, NORWAY (2 February 2017) - TGS reported net revenues of USD 165 million in Q4 2016 following strong late sales performance. Full year 2016 net revenues were USD 456 million. Quarterly dividend will be maintained at USD 0.15 per share. New multi-client investments for 2017 are expected to be at approximately the same level as in 2016.

4^th Quarter Highlights

Consolidated net revenues were USD 165 million, compared to USD 132 million in Q4 2015
Net late sales totaled USD 145 million, up 60% from USD 90 million in Q4 2015
Net pre-funding revenues were USD 17 million, down 53% from Q4 2015, funding 19% (37% excl. risk-sharing investments) of TGS' operational multi-client investments for the quarter (USD 88 million including USD 42 million from risk sharing arrangements)
Operating profit (EBIT) was USD 42 million (25% of net revenues), compared to USD -140 million (-106% of net revenues), in Q4 2015
Cash flow from operations was USD 79 million, compared to USD 99 million in Q4 2015
Free cash flow (after multi-client investments) was USD 33 million, compared to USD -20 million in Q4 2015.
Cash balance at 31 December 2016 was USD 191 million in addition to the undrawn USD 75 million Revolving Credit Facility
Earnings per share (fully diluted) were USD 0.23, up from USD -1.19 in Q4 2015.
Quarterly dividend maintained at USD 0.15 per share

2016 Full Year Financial Highlights

Consolidated net revenues were USD 456 million, compared to USD 612 million in 2015
Net late sales totaled USD 333 million, same as in 2015
Net pre-funding revenues were USD 105 million, down 59% from 2015, funding 39% (48% excl. risk-sharing investments) of TGS' operational multi-client investments for the year (USD 271 million including USD 51 million from risk sharing arrangements)

Operating profit (EBIT) was USD 53 million (12% of net revenues), compared to USD -21 million (-3% of net revenues), in 2015
Cash flow from operations was USD 324 million, compared to USD 567 million in 2015
Free cash flow (after multi-client investments) was USD 91 million, compared to USD 63 million in 2015
Earnings per share (fully diluted) were USD 0.22, up from USD -0.28 in 2015

2017 Full Year guidance

While the Q4 2016 results confirm early signs of improvement in the market, visibility remains low for the near-term. The combination of a strong balance sheet and flexible business model positions TGS well to continue to take advantage of market conditions.

Including the recent announcements of the large Atlantic Margin 3D project in Norway and TGS' first survey in the Permian basin onshore U.S, a substantial part of the 2017 investment plans has already been committed.

With the expectation of further investments being committed during the year, TGS provides the following guidance for 2017:

New multi-client investments* around the same level as in 2016
Additional multi-client investments expected from sales of existing surveys with risk sharing arrangements
Pre-funding of new multi-client investments* expected to be approximately 40-45%

*New multi-client investments excluding investments related to surveys with risk sharing arrangements

"TGS delivered a strong Q4 2016, beating both company forecasts and market expectations. Going into 2017 we are well positioned with an efficient cost base, strong balance sheet and flexible business model. Our employees are actively developing new business opportunities during this down-cycle as we continue to enhance our status as the world's leading multi-client geophysical company," TGS' CEO Kristian Johansen stated.

To access TGS Q4 2016 results information, please use the web links below:

Capital Markets Day Presentation and Webcast
Kristian Johansen (CEO) and Sven Børre Larsen (CFO) will present the 2016 financial results and 2017 guidance at 9.00am GMT during the company's Capital Markets Day in London, UK today.

To access TGS Capital Markets Day presentation and webcast, please use the web links below:

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act).

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