French geophysical services company, CGG, has posted a net loss for the fourth quarter 2015 following non-recurring charges mainly related to redundancies, and asset impairments.
The geophysical company narrowed its net loss during 4Q 2015 at $256 million, after non-recurring charges, compared to $667 million loss in the corresponding period in 2014.
Following the strong deterioration in market conditions and CGG’s implementation of the new step in the transformation plan announced in November 2015, the company’s total non-recurring charges were $187 million, including $171m of other restructuring costs, mainly related to redundancies, and $16m of asset impairments.
In accordance with the company’s transformation plan, CGG said that cost reductions are on track, with, since 2013, (64)% in marine costs; (54)% in G&A expenses; capex divided by two; and departure of 3,700 employees.
According to CGG’s 4Q report, the number of employees laid off in 2015 amounts to 1,279.
After minority interests, net income attributable to the owners of CGG was a loss of $259 million.
CGG’s revenue dropped 35% at $589 million in the fourth quarter of 2015, compared to $906 million in the same period of 2014.
The geophysical company’s global capex was $96 million, down 39% year-on-year.
Commenting on these results, Jean-Georges Malcor, CGG CEO, said: “2016 will remain difficult with a very weak start of the year. In this context, the Group is resolutely implementing its Transformation Plan, particularly with the reduction in its fleet to 5 vessels by the end of the first quarter of 2016.
“Contractual Data Acquisition will gradually decline to less than 15% of Group revenue, while GGR will represent more than 60 %. By implementing very rigorous cash management, we target a net debt of less than 2.4 billion dollars by the end of the year.”
The company’s net debt at the end of the year was $2.5 billion.
On March 2, 2016, CGG received notice from the New York Stock Exchange (NYSE) that it is no longer in compliance with the NYSE’s continued listing standards because the average per share closing price of CGG’s American Depositary Shares (ADS) for the consecutive 30 trading–day period ending on March 1, 2016 was below the NYSE’s price requirement of $1.00 per security.
The company said it intends to notify the NYSE of its intention to cure the deficiency within the prescribed time frame of six months from receipt of the NYSE notice on March 2, 2016. The company’s ADSs will continue to be listed and traded on the NYSE, subject to compliance with the other NYSE continued listing standards and oversight by the NYSE.
Offshore Energy Today Staff