(Adds CFO and CEO quotes, analysts, details)
OSLO Feb 16 Seismic surveying company PGS
posted a bigger loss than forecast for its fourth
quarter on Thursday due to weaker than expected sales of its
data, but said it expects demand for its services to grow as the
oil market picks up.
The Norwegian company, which maps out the seabed for oil
firms in search of hydrocarbon deposits, has been struggling in
recent years as persistently low crude prices have sapped demand
for its services.
However, it expects business to grow by around 10 percent
this year as oil prices stabilise and oil companies seek data to
help them replenish depleted reserves.
At 0952 GMT, PGS shares traded 2.9 percent down in Oslo,
underperforming European oil and gas shares .SXEP which traded
0.7 percent down.
PGS posted a fourth-quarter loss before interest and taxes
and excluding one-offs of $65 million, deeper than the expected
loss of $38 million expected in a Reuters poll, and than the
loss of $23 million posted at the same time a year ago.
"The fourth quarter results were very disappointing due to
lower than expected multi-client sales, while the outlook is
neutral," John Olaisen at ABG Sundal Collier brokerage said.
Swedbank's analyst Teodor Sveen-Nilsen said PGS's late sales
were around 30 percent of his expectations for the fourth
PGS's multi-client late sales were down to $52.4 million in
the fourth quarter, from $67.5 million a year ago, and $63.2
million in the third quarter.
Late sales are sales of seismic data after the surveys are
complete, as opposed to initial sales to pre-fund the projects.
MORE ACTIVITY IN 2017
"Looking forward, (vessel) utilisation will be much higher,"
PGS Chief Financial Officer Gottfred Langseth told investors at
a presentation in Oslo. The PGS utilisation rate fell to 52
percent in the fourth-quarter.
"We are starting more or less fully booked for the first
half, with 100 percent (vessel booking) for the first and 80
percent for the second quarter."
The day rates, which varied from $130,000 to $220,000 last
year, are not expected to fall further in 2017, but upside
potential was uncertain, PGS executives said.
PGS's Chief Executive Officer Jon Erik Reinhardsen said he
expected the range's top rate of $220,000 to be broken in 2017.
"We are trying to see how far we can push the rates given
higher utilisation in the overall fleet globally," he added.
PGS competitor TGS said on Feb. 2 that 2017 vessel
rates faced more upside than downside risks.
But higher activity also meant gross cash costs rising
year-on-year by 6 percent to around $700 million in 2017, partly
due to higher fuel costs, PGS added.
(Reporting by Nerijus Adomaitis; editing by Terje Solsvik/Ruth