Falling: profits at CGGVeritas
CGGVeritas numbers take a dive
CGGVeritas reported an 18.7% drop in first-quarter operating profit to €100.3 million ($137 million) as oil companies cut spending, reducing demand for the French company's seismic surveys.
In dollars operating profit was down 29% at $131 million, said the company which is based in Paris and Houston.
CGGVeritas also said it was implementing "rigorous" cost cuts, giving no estimates, and said it was planning to remove five vessels - three 3D and one 2D - from the market in 2009.
"Since visibility remains particularly low for the rest of the year we are implementing cost savings and adjusting capacity to strengthen our ability to deliver optimal performance and focus on our priority of a healthy net free cash flow in 2009," chairman Robert Brunck said in a statement.
The company, which is battling unlisted Schlumberger's WesternGeco unit for leadership of the seismic services market, has a fleet of vessels towing long streamers that survey wider and deeper zones than was possible a few years ago.
In February Brunck forecast a fall of 15% to 20% demand for seismic imagery in 2009 and 2010, compared with 2008.
But Brunck reiterated today that he remained confident in the outlook for the industry in the longer term.
CGGVeritas, born out of the merger of Compagnie Generale de Geophysique and Veritas in 2007, recently acquired Norwegian company Wavefield Inseis to boost its fleet of vessels.
The group has a market capitalisation of €1.9 billion, reported Reuters.