PARIS, August 2 /PRNewswire-FirstCall/ -- - Revenues of $769 Million, up 37% - Net Result of EUR45 Million, or $60 Million - First Half 2007 Results on Target - 10% First Half net Income and a Strong Forward Outlook CGGVeritas (ISIN: 0000120164 - NYSE: CGV) today announced its second quarter 2007 unaudited financial results. Financial Highlights(1): Group: - Revenues of EUR571 million ($769 million), up 28% in EUR and 37% in $ - EBITDA of EUR210 million ($284 million), and EBITDA margin of 37% compared to EUR168 million, ($ 212 million), and EBITDA margin of 38% - Purchase Price Allocation (PPA) negative impact of EUR7 million ($9 million) - Operating Profit, including PPA, of EUR101 million ($136 million), a 18% operating margin compared to EUR66 million ($85 million), a 15% operating margin - Net Profit of EUR45 million ($60 million) compared to EUR18 million ($23 million). - EPS of EUR1.56 ($2.11) Services: - Revenues of EUR390 million ($525 million), up 26% in EUR and 34% in $ - EBITDA margin of 38% compared to 43% - Operating Profit of EUR46 million ($62 million), including PPA, a 12% operating margin compared to 11% Sercel: - Revenues of EUR196 million, ($264 million), up 18 % in EUR and 28% in $ - Operating Profit of EUR67 million ($91 million), an operating margin of 34% compared to 27% Operational Highlights: - 26 land seismic crews in operation for the slower spring season, after demobilization of the arctic crews - Vessel utilization rate was lower at 75% with scheduled dry docks for performance upgrade and maintenance - The new seismic vessel, CGGVeritas Vision, completed successful sea trials and became active in our fleet in July - 3rd Wide Azimuth Acquisition program proceeding well in the deepwater Gulf of Mexico (GoM) - Multi-Client after-sales of EUR51 million, ($69 million) in this typically low quarter - Multi-Client pre-funding level at 80% - Successful deepwater implementation of Seabed solution in Asia Pacific - Sercel continued to see significantly strong sales with especially high land equipment deliveries - Backlog as of July 1st 2007 of $ 1.6 billion Comments and Perspectives: CGGVeritas Chairman & CEO, Robert Brunck, commented: "I am pleased that our performance, in the industry's typically slow seasonal quarter, was inline with our expectations enabling CGGVeritas in our first six months following the merger to reach our mid year goals. Supported by continued superior results from Sercel and robust year on year growth from Services across all of our business lines in the Eastern and Western Hemisphere, it is clear that CGGVeritas is off to a strong start in creating the leading Geophysical company. I was particularly pleased to see the quick take-up and successful results of our high-end innovative products and services, including our industry leading wide-azimuth capabilities offshore Gulf of Mexico and onshore Middle East, our advanced imaging algorithms worldwide and our first wireless equipment sale. Looking forward, with the continued strengthening market conditions, and increasing multi-client sales along with Sercel's continued leadership performance, I am pleased to say that we expect to exceed our previously announced 2007 targets." First Half 2007 Financial Highlights: - Group Revenues of EUR1163 million ($1546 million), up 18% in EUR and 29% in $ - Group EBITDA of EUR468 million ($622 million), and EBITDA margin of 40% compared to EUR389 million, ($476 million), and EBITDA margin of 40% - Group Operating Profit, including PPA, of EUR244 million ($324 million), a 21% operating margin compared to EUR180 million ($220 million), a 18% operating margin - Net Profit of EUR114 million ($151 million), 10% percent of revenue compared to EUR53 million ($65 million), 5% of revenue - EPS of EUR4.16 ($5.53) Table of year-on-year Financial Highlight comparisons: Financial Highlights In million US dollars Second Second First First Quarter Quarter Half Half 2007 2006 2007 2006 Exchange rate 1.347 1.253 1.329 1.223 Operating revenues 768.7 562.1 1546.0 1201.4 Sercel 264.1 206.4 532.4 351.3 Services 525.3 391.8 1084.1 926.0 Elimination (20.7) (36.1) (70.5) (75.9) Gross profit 235.9 156.2 506.8 355.6 Operating profit (loss) 135.9 84.7 324.3 220.4 Sercel 90.5 56.6 181.1 91.6 Services 62.1 43.9 195.0 153.6 Corporate and Elimination (16.7) (15.8) (51.8) (24.8) Income (loss) from equity investments 1.0 3.8 1.6 7.1 EBITDA 283.6 212.0 622.1 475.9 Sercel 97.0 61.3 193.9 101.4 Services 199.0 167.4 475.0 402.6 Net income (loss) 60.4 22.8 151.0 65.3 Industrial Capex & development costs 64.9 48.4 161.3 145.4 Multi-Client Capex 111.3 75.3 191.9 114.3 Net Debt / Equity gearing ratio 50% N/A 50% N/A Earnings per share (in Euros) 1.56 0.63 4.16 1.95 Second quarter revenues: - Group Revenues were EUR571 million, ($769 million) up 28% in EUR and up 37% in $ - Revenues for Services were EUR390 million, ($525 million) up 26% in EUR and up 34% in $, due to strengthening market conditions, upward price mobility and partially offset by lower vessel utilization rate - Revenues for Sercel were EUR196 million ($264 million), up 18 % in EUR and up 28% in $ year on year. Sercel external sales were EUR181 million ($244 million) up 32% in EUR and up 42% in $, year on year Services revenue breakdown by business line: - Contract revenues: - Land contract revenues were EUR72 million ($97 million) down 5% in EUR and stable in $ - Offshore contract revenues were EUR134 million ($180 million) up 48% in EUR and up 57% in $ - Processing and Reservoir revenues were EUR67 million ($90 million), up 7% in EUR and 15% in $ - Multi-Client revenues - Total Multi-Client revenues were EUR117 million ($158 million) up 46% in EUR and up 53% in $ - Multi-Client land revenues were EUR20 million ($27 million) - Multi-Client offshore revenues were EUR97 million ($131 million) Second quarter EBITDA and Operating Profit: Group: - The Group EBITDA was EUR210 million ($284 million), a 37% EBITDA margin, compared to EUR168 million ($ 212 million), 38% EBITDA margin - The Group Operating Profit was EUR101 million ($136 million), a 18% operating margin, including PPA EUR7 million ($9 million) compared to EUR66 million ($85 million), including PPA EUR5 million ($6 million), a 15% operating margin Services: - Services EBITDA was EUR147 million ($199 million), a 38% EBITDA margin compared to EUR132 million, ($167 million) and a 43% EBITDA margin, mainly due to increased vessel shipyards for performance upgrade and maintenance - Services Operating Profit including PPA was EUR46 million ($62 million), a 12% operating margin, compared to EUR34 million ($44 million), a 11% operating margin Sercel: - Sercel EBITDA was EUR72 million ($97 million) corresponding to a 37% EBITDA margin, compared to EUR49 million ($61 million), a 30% EBITDA margin - Sercel Operating Profit was EUR67 million ($91 million), a 34% operating margin, compared to EUR46 million ($57 million), a 27% operating margin Overview of Operations and Market Outlook: Services: Land Contract Acquisition: The land market continues to strengthen and during the quarter, we operated 23 crews in average, 9 crews in Western Hemisphere and 14 crews in the Eastern Hemisphere where our high-density wide-azimuth HPVAtm continues to gain acceptance. In the third and fourth quarter we expect strong activity especially in Europe Africa and Middle East (EAME) and Asia Pacific. Land Multi-Client: During the quarter, 3 crews shot highly pre-funded Multi-Client programs in North America and data sales continued to be strong especially in the Canadian Foothills. Offshore Contract Acquisition: During the quarter, five 3D vessels were operating in Asia Pacific, one in EAME and one in GoM on a wide-azimuth contract. As anticipated, the 3D vessel utilization rate at 75% was lower than the first quarter mainly based on the scheduled dry docks for performance upgrade and maintenance. The utilization rate will be up again in the third and fourth quarter and two new vessels, the Vision and the Vanquish, join our fleet, respectively in early July and mid October. The Seisquest was decommissioned June 9th. Also during the quarter we successfully implemented a seabed solution offshore Malaysia at a water depth of over 1000 meters. Multi-Client Offshore: Approximately 40% of our 3D vessels during the quarter were dedicated to our Multi-Client library. We operated 5 vessels on highly pre-funded new Multi-Client programs, in GoM, Brazil and North Sea. Demand for recent vintage and well located data, particularly in deep and ultra-deep waters of the GoM, remains robust and we began shooting a highly pre-funded new wide-azimuth program in the GoM. We expect Multi-Client after-sales to strengthen in the second half of the year in line with lease sales and typical seasonal cycles in the industry. Processing & Reservoir: Processing activity continued to increase worldwide driven by marine data volumes especially with the increasing market take-up of wide-azimuth and the high demand for our advanced imaging capabilities. Backlog continues to remain strong. Sercel: During the quarter, Sercel delivered a significantly large volume of land equipment into an expanding market and increasing demand for higher channel counts to increase seismic resolution. Marine equipment sales continue to be at record levels driven by demand for leading streamer technology and new vessels coming into the market. Net Income: - The net result was a Profit of EUR45 million ($60 million) compared to a pro-forma Profit of EUR18 million ($23 million) - EPS was EUR1.56 ($2.11) Cash Flow: - During the quarter, we early reimbursed $100 million of our term loan B senior facility - The industrial Capex for the second quarter 2007 was EUR47 million ($64 million) compared to pro-forma EUR38 million ($48 million) - The Multi-Client Capex for the second quarter 2007 was EUR83 million ($111 million) compared to pro-forma EUR62 million ($75 million). The average pre-funding level was 80% Balance Sheet items: - At the end of June 2007, Shareholder's equity was EUR2.4 billion and net financial debt was EUR 1.2 billion, representing a 50 % net debt to equity ratio CGGVeritas comparison with CGG: This table provides the CGGVeritas financial results in million euros for the second quarter and first half of 2007 compared with historical CGG standalone financial results for the second quarter and first half of 2006 Financial Results In million Euros Second Second First Half First Half Quarter Quarter 2007 2006 2007 2006 Exchange rate 1.347 1.253 1.329 1.223 Operating revenues 571.1 312.4 1163.3 634.5 Sercel 196.2 165.8 400.6 287.2 Services 390.1 173.0 815.7 402.9 Elimination (15.2) (26.4) (53.0) (55.6) Operating profit (loss) 100.5 61.6 244.0 146.1 Sercel 67.3 45.5 136.3 74.9 Services 45.5 27.8 146.7 89.7 Elimination (12.3) (11.7) (39.0) (18.5) EBITDA 210.2 106.5 468.1 234.3 Sercel 72.1 49.2 145.9 82.9 Services 147.1 69.7 357.4 172.6 Net income (loss) 44.6 29.7 113.6 76.2 Earnings per share (EUR) 1.56 1.69 4.16 4.37 - Group Revenues were EUR571 million ($769 million) up 83% in EUR and up 96% in $ - Group Operating Profit was EUR101 million ($136 million), up 65% compared to EUR62 million ($77 million) - The Net Result was EUR45 million ($60 million) up 50% compared to EUR30 million ($37 million) - EPS was EUR1.56 compared to EPS of EUR1.69 The information included herein contains certain forward-looking statements within the meaning of Section 27A of the securities act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties as disclosed by the Company from time to time in its filings with the Securities and Exchange Commission. Actual results may vary materially. Robert BRUNCK, Chairman and CEO, will comment on the results during on August 2nd 2007, a public presentation at 10:00 am, at Palais Brongniart - Place de la Bourse Paris 2nd arrondissement. An English language conference call is scheduled also today at 2:30 pm Paris, 1:30 pm London, 8:30 am US Eastern and 7:30 am US Central Time. To take part in the conference call, please dial in using the numbers below 10 minutes prior to the scheduled start time. International +1-706-758-9607 US +1-800-374-0113 Replay +1-706-645-9291 & +1-800-642-1687 - code 10746469 You will be asked for the name of the conference: "CGGVeritas Second Quarter 2007 Results". CGGVeritas will also provide a streaming audio webcast of the conference call accessible on our web site at http://www.cggveritas.com/ on a listen-only basis. Please connect 10 minutes prior to the start of the conference to register for the call and to check your connection is working properly. A replay will be available on our website for two weeks following the conference call. The quarterly financial information, including Press Releases, 6K detailed financial figures and presentation, will be available on our website at 8 am Paris time on August 2nd. About CGGVeritas: CGGVeritas (http://www.cggveritas.com/) is a leading international pure-play geophysical company delivering a wide range of technologies, services and equipment through Sercel, to its broad base of customers mainly throughout the global oil and gas industry. CGGVeritas is listed on the Eurolist of Euronext Paris SA (ISIN: 0000120164) and the New York Stock Exchange (in the form of American Depositary Shares, NYSE: CGV). (1) Veritas results have been incorporated as of January 12th 2007 at the time the merger was effective. For the purpose of providing the best understanding of our performance, all results are second quarter results unless otherwise stated and are compared to pro-forma 2006 figures. 2006 pro-forma figures are pro-forma as if the merger was effective on January 1st, 2006 and result from the consolidation of former CGG and former Veritas figures. Our consolidated financial statements are presented in euros. Converted US$ figures are presented only to assist you in understanding our operating revenues are not part of our reported financial statements. The $ figures are calculated based on second quarter EUR/$ average exchange rate for the Profit & Loss and Cash Flow Statement and are based on the EUR/$ closing exchange rate for the Balance Sheet. The comparison in EUR between the CGGVeritas second quarter 2007 results with the second quarter 2006 CGG standalone results is provided on the page after the balance sheet items. Contacts Investor Relations: Paris: Christophe Barnini Tel: +33-1-64-47-38-10 Houston: Hovey Cox Tel: +1-832-351-8821 Press Contact: Brunswick Tel: +1-212-333-3810 DATASOURCE: CGG Veritas CONTACT: Contacts Investor Relations: Paris: Christophe Barnini, Tel: +33-1-64-47-38-10, ; Houston: Hovey Cox, Tel: +1-832-351-8821, ; Press Contact: Brunswick, Tel: +1-212-333-3810

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