REG - IG Seismic Services - 1H2014 Financial Results Press Release <Origin Href="QuoteRef">IGSSq.L</Origin>

IG Seismic ServicesAnnouncement

29/10/2014 13:05

RNS Number : 1074S
IG Seismic Services PLC
19 September 2014
IG Seismic Services PLC
IG SEISMIC SERVICES ANNOUNCES UNADITED IFRS RESULTS
FOR THE SIX MONTHS OF 2014
Moscow, September 19, 2014
IGSeismic Services PLC ("IGSS" or the "Company", LSE: IGSS), the leading pure-play land and transition zone seismic company in Russia and the CIS and one of the largest land seismic companies globally, announces unaudited consolidated financial results for the six months ended June 30, 2014. 
During the first half of 2014, the Company changed the currency in which it presents its consolidated financial statements from US dollars to Russian Roubles, in order to better reflect the underlying performance - the Company's revenues, profits and cash flows are primarily generated in Russian Roubles, and are expected to remain principally denominated in Russian Roubles in the future. 
Key Financial Results for the First Six Months of 2014

1H 2014
1H 2013
Change
in million RUR, unless otherwise stated



Revenue
10,398
10,716
-3.0%
EBITDA
2,154
2,305
-6.5%
EBITDA margin
20.7%
21.5%
-80 bp
Net Profit / (loss)
(335)
79
--
Operating Cash Flow
3,513
4,734
-25.8%
Capital Expenditures
1,467
1,629
-9.9%
Net Debt
11,569
10,098
14.6%
*For details please see the Management Report on 1H 2014 Results
 Revenue amounted to RUR 10,398 mln, having decreased by 3.0% year-on-year; 
 EBITDA decreased by 6.5% year-on-year and amounted to RUR 2,154 mln. EBITDA margin decreased to 20.7% of sales compared to 21.5% of sales for the same period of 2013;
 Net loss amounted to RUR 335 mln.; 
 Operating Cash Flow for the first six months of 2014 decreased by 25.8% over the same period of 2013 to RUR 3,513 mln.;
 Capital Expenditures for the first half of 2014 amounted to RUR 1,467 mln.;
 As of 30 June 2014, net debt amounted to RUR 11,569 mln. 
Key Operating Results for the for the First Six Months of 2014
 IGSS seismic crews performed 1,017 thousand shot points, out of which 190 thousand related to 2D surveys, 504 thousand to 3D surveys, and 323 thousand to HD (high density) surveys; of which 964 thousand shot points were performed in Russia, 7 thousand - in Kazakhstan, and 46 thousand - in India. 
 Total of nearly 10 thousand linear kilometers related to 2D surveys, 7 thousand square kilometers related to 3D survey, 0.62 thousand linear kilometers related to HD and 0.75 thousand square kilometers related to HD were performed.
 As of 30 June 2014 the Company operated 67 field crews with 364,089 channels, 120 vibroseis sources, 171 pulse sources and 589 drilling units. 
Operating Results for the First Six Months of 2014
Kilometers
1H 2014
1H2013
Change
2D (km)
9,509
7,289
30%
3D (sq.km)
7,401
11,060
-33%
HD (km)
621
1,001
-38%
HD (sq.km)
751
522
44%
Shot Points performed by IGSS crews 



2D 
190,162
176,903
7%
3D 
504,005
687,214
-27%
HD
322,598
268,011
20%
TOTAL performed by IGSS crews
1,016,765
1,132,128
-10%
including 



Russia
964,145
1,066,232
-10%
Kazakhstan
6,723
61,189
-89%
Other *
45,897
4,707
875%




TOTAL subcontracted
0
20,351
-100%
*Includes India in 1H 2014; includes Azerbaijan in 1H 2013.
Order Book as of June 30, 2014 
 As of June 30, 2014, the Company's seismic services order book amounted to approximately RUR 24,750 mln. (inclusive of VAT), of which approximately RUR 18,028 mln. accounted for signed contracts and approximately RUR 6,722 mln. represented tenders won. 
 The seismic services order book as of June 30, 2014 increased in RUR terms approximately by 10% compared to the order book as of June 30, 2013.
 As of June 30, 2014, the Company's Data Processing and Interpretation order book amounted to approximately RUR 455 mln. (inclusive of VAT) of which approximately RUR 324 mln. accounted for signed contracts and approximately RUR 131 mln. represented tenders won. 
SEISMIC SERVICES 
Order Book as of 30 June 2014 (including VAT)

As of 30.06.2014
As of 30.06.2013
Change

RUR mln
RUR mln
RUR, %
Western Siberia
6,984
6,020
16%
Eastern Siberia
10,909
7,827
39%
Timano-Pechora
5,654
4,307
31%
South of Russia
176
2,183
-92%
Kazakhstan
0
288
-100%
Other*
1,027
1,798
-43%
TOTAL,including
24,750
22,423
10%
Contracts signed**
18,028
19,367
-7%
Tenders won, contracts to be signed
6,722
3,056
120%
Order Book as of 30 June 2014 Breakdown by Year (including VAT)*

As of 30.06.2014

RUR mln
2014
9,860
2015
14,890
TOTAL
24,750
SEISMIC DATA PROCESSING AND INTERPRETATION 
Order Book as of 30 June 2014 (including VAT)

As of 30.06.2014
As of 30.06.2013


RUR mln
RUR mln
Change
Contracts signed**
324
476
-32%
Tenders won, contracts to be signed
131
44
201%
TOTAL
455
520
-13%
* Includes India as of 30 June 2014; Includes India, Uzbekistan and Azerbaijan as of 30 June 2013.
**Signed contracts may be subject to renegotiation of volumes and/or other terms or even cancellation, and both signed contracts and tenders won may not proceed as originally planned at all.
Order Book Update as of September 13, 2014
 As of September 13, 2014, the Company's seismic services order book amounted to approximately RUR 28,588 mln. (inclusive of VAT), of which approximately RUR 25,277 mln. accounted for signed contracts and approximately RUR 3,311 mln. represented tenders won. 
 The seismic services order book as of September 13, 2014 increased in RUR terms approximately by 8% compared to the order book as September 13, 2013.
 As of September 13, 2014, the Company's DPI order book amounted to approximately RUR 410 mln. (inclusive of VAT) of which approximately RUR 322 mln. accounted for signed contracts, and approximately RUR 88 mln. represented tenders won. 
SEISMIC SERVICES
Order Book as of 13 September 2014 (including VAT)

As of 13.09.2014
As of 13.09.2013
Change

RUR mln
RUR mln

Western Siberia
6,775
7,295 
-7%
Eastern Siberia
 12,043
11,627
4%
Timano-Pechora
5,330
4,080 
31%
South of Russia
3,512
1,404 
150%
Kazakhstan
17
226
-93%
Other *
911
1,805
-50%
TOTAL,including
28,588
26,437
8%
Contracts signed**
25,277
19,835
27%
Tenders won, contracts to be signed
3,311
6,602
-50%
Order Book as of 13 September 2014 Breakdown by Year (including VAT)

As of 13.09.2014

RUR mln
2014
6,879
2015
16,181
2016
5,528
TOTAL
28,588
SEISMIC DATA PROCESSING AND INTERPRETATION 
Order Book as of 13 September2014 (including VAT)

As of 13.09.2014
As of 13.09.2013
Change

RUR mln
RUR mln

Contracts signed**
322
365
-12%
Tenders won, contracts to be signed
88
-
100%
TOTAL
410
365
12%
* Includes India as of 13 September 2014; Includes India, Uzbekistan and Azerbaijan as of 13 September 2013.
**Signed contracts may be subject to renegotiation of volumes and/or other terms or even cancellation, and both signed contracts and tenders won may not proceed as originally planned at all.
Nikolay Levitskiy, IGSS Chief Executive Officer, commented: 
"The indicators were affected by a reduction in seismic volumes because of a shortened winter field works season due to warm weather, which led to later mobilization and earlier end of works due to early thawing. The revenue dynamics was also affected by later than usual contracts signing by some of the customers, resulting in postponement of part of the seismic works. The above effects on revenue were partially offset by a higher average price per 1 shot point as a result of Company strategy to concentrate on advanced technology projects. 
We aim to improve our results by means of focusing on earlier contracting in the future, and by continuing to work on reducing the effects of traditional seasonality on business. We are gradually increasing the amount of works conducted during warm months of the year. This includes conducting in summer and early autumn wood-cutting and other preparation works necessary to provide for winter contracts works. Conducting works in different climates (for example, works under our contract in India are conducted all year round) will also contribute to the leveling off the seasonality effect. I think that we can expect the season 2014-2015 to be less dependent on weather conditions that the season of 2013-2014.
We also continue to work on further improving efficiency and reducing costs. In the first half of 2014 we have implemented next steps to optimize the Company's corporate ownership structure and business unit's management structure. We have streamlined our operations by clearly dividing our assets into two business units in accordance with existing business lines (seismic services and data processing and interpretation). The next logical step has been to move our main operational office to Tyumen - the majority of operational units are concentrated in Siberia. Thus, we expect that the future financial results will be positively affected by the reduction of costs associated with Moscow office and some operational subsidiaries, and by overall operational efficiency increase resulting from such optimization."
Contacts
For further information please visit www.igseis.com or contact:
IGSS Investor Relations
Olga Popova
+ 7 495580 7882 ext. 129
o.popova@geotechcom.ru
This document may contain "forward-looking statements" which include all statements other than statements of historical fact. Such forward-looking statements can often be identified by words such as "plans", "expects", "intends", "estimates", "will", "may", "continue", "should" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the IG Seismic Services PLC's (the "Company") control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and neither the Company, nor any of its respective agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. The information and opinions contained in this document are provided as at the date of this document or as otherwise specified herein and are subject to change without notice.

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