Geophysical services provider CGGVeritas (CGV) Thursday reported a huge loss for the fourth quarter, as it made a hefty asset write-down driven by fleet restructuring plan and recent evolution in the seismic market. Results were further dragged down by a 28% decrease in revenues as well as restructuring costs. However, the company expects seismic market to recover in 2010.
For the fourth-quarter, the company posted a net loss of US$410.9 million compared to a net profit of US$164 million in the same period last year. In Euro terms, net loss for the fourth quarter was EUR 295.9 million.
Net loss attributable to shareholders was US$412.5 million or US$2.72 per share.
Excluding restructuring costs of US$59 million and the hefty one-off depreciation charges of intangible assets of US$389 million, fourth-quarter net income dropped to US$5.2 million from US$164 million in the comparable period last year. In Euro terms, adjusted net income decreased to EUR 3 million from EUR119 million in the year-ago period.
Group revenues for the period declined 28% to US$747.8 million from US$1.04 billion last year, and in Euro terms, declined 35% to EUR 499.9 million from EUR 766.8 million in the prior year.
Segment-wise, Sercel revenue declined to US$215.0 million from US$332.7 million in the year-ago quarter. Services revenue decreased to US$561.8 million from US$696.2 million in the same quarter last year.
The company noted that Marine contract revenue dipped 39% in dollars and 47% in euro, Land contract revenue was down 34% in dollar and 42% in euro, driven mainly by the North American market as activity remained slow with gas prices continuing to stagnate.
Processing & Imaging revenue was down 2% in dollars and 10% in euros, as performance and demand for the company's innovative technology continued to grow, particularly in the Gulf of Mexico.
Multi-client revenue was up 11% in dollars and 3% in euro, as multi-client marine revenue increased 5% in dollars and Multi-client land revenue rose 42% in dollars and 27% in euro.
Chairman & CEO, Robert Brunck said, "In the perspective of a marine market that is continuing to rapidly evolve toward high-resolution and reservoir development, we decided in 2009 to reduce the capacity of our low-end fleet while increasing our position in the high-end market."
Operating loss for the period was US$393.2 million in dollar and EUR 285.1 million in euro currency.
For the full year, the company reported a net loss of US$360 million. Excluding restructuring costs of US$144 million and one off depreciation charges of intangible assets of US$389 million, net income declined to US$109.7 million from US$502.8 million last year.
In Euro terms, net loss for the year was EUR 258.9 million. Adjusted net income for the year declined to EUR 78.8 million from EUR 340.0 million last year.
Group revenue for the year was down 19% to $3.11 billion from US$3.85 billion last year In euro terms, revenues decreased to EUR 2.23 billion from EUR 2.60 billion in the prior year.
The company said, "Looking forward, in the context of increasing exploration and production spending and given the fleet rationalization efforts undertaken by the leading seismic companies, we expect the seismic market to progressively recover in 2010."
CGV closed Wednesday's regular trading at $24.65 per share on the NYSE.
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