CGG’s operating profit for 2003 was 10.6 million Euros down from 61.6 million in 2002. Robert Brunck, chairman and CEO, declared, ‘While the market in 2003 continued to suffer from the combined effects of very slow demand and persistent overcapacity, CGG has further reduced its debt, delivered positive earnings before exceptional items and preserved its technological leadership. Only a consolidation of our industry followed by a significant reduction in capacity, particularly in marine, will bring the changes needed to allow the actors of the industry to reach satisfactory level of return. This is the reasoning behind our stake in competitor PGS.’ In a webcast Brunck re-iterated his call for consolidation between PGS and CGG, stating that, ‘The companies have agreed to deliver a clear message to market in the near future.’
PGS
PGS president Svein Rennemo did not share Brunck’s enthusiasm for a joint statement when questioned during the PGS 4th quarter conference call. Rennemo denied that such an agreement had been reached, stating that, ‘Any accommodation—be it with CGG or another company can be entertained—but must satisfy our criteria’. PGS posted a net loss of $815 million (down from $1.2 billion in 2002) on revenues of $1,1 billion (up 12%). PGS expects industry overcapacity to remain for the short to medium term but believes there is an opportunity for higher pricing of technology.
Fugro
Fugro’s 2003 net result was €32.4 million, down from €60.2 million in 2002. President and CEO Gert-Jan Kramer commented, ‘In a year in which incidental factors resulted in disappointing financial results, Fugro made an important strategic step with the acquisition of Thales GeoSolutions. The integration process is now almost finished and we have a strong starting position for 2004. The strengthened market position of Fugro combined with the sound development of the order book are positive signs.’ Fugro reports that oil and gas sector clients will be cranking up investment by some 4-6% in 2004. Positive developments are expected from deepwater projects, particularly in the Gulf of Mexico and West Africa. Good capacity utilization is also anticipated for the activities in the Middle East, the Caspian Sea and Asia. The company described as ‘delightful’ the fact that several of the largest oil companies will now use $20 (instead of $16) per barrel to determine the feasibility of new investments.
Iron Mountain
Richard Reese, Iron Mountain chairman and CEO said, ‘2003 was another solid year for us. Revenues exceeded $1.5 billion for the first time in our history and we doubled our presence in Europe with the strategic acquisition of Hays. We see tremendous opportunities before us and we are focusing our efforts on capturing them.’
Kelman
2003 operating revenue was $ 24 million, down 14% from 2002; the company posted a $341,000 loss for the year. Kelman president David Richard described 2003 as, ‘A difficult period for the seismic processing industry. Clients’ activity was more weighted to exploitation—requiring less seismic information.’ Kelman has taken steps to reduce operational costs and expects savings will be reflected in the second and subsequent quarters of 2004. Richard sees an ‘improved operational climate’ for 2004 and believes the company is ‘well placed for the future’. ‘Our Houston, Denver and Oklahoma offices have been refurbished and expanded. The current high and comparatively stable commodity prices are expected to encourage our clients to expand their 2004 capital exploration budgets. We expect that the combination of cost savings, expanded operational capacity and increased seismic spending by our clients will reward KTI in 2004.’
Veritas DGC
Veritas posted revenues for the six months ending January 31st 2003 at $252 million – down 4% on the same period of 2002. This translated into a net loss of $12 million (against a profit of $6 million). Outgoing chairman and CEO, Dave Robson said, ‘Although I am leaving, I’m confident that the management team will continue to emphasize technology, operational excellence and positive cash flow.’
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