PARIS: French seismic survey group CGG said on Thursday it would further cut its fleet of vessels, after declining demand from oil and gas clients led it to take one-off charges of $643 million in the fourth quarter.
Like peers across the oil services industry, CGG has been hit by cutbacks in the sector as major producers slash exploration in response to oil prices more than halving since June. But the group has also been the subject of takeover speculation.
Last year, it rebuffed a 1.47 billion euro ($1.7 billion) preliminary takeover approach by fellow French oil services group Technip.
Asked if Technip or other companies had approached the group, Chief Executive Jean-Georges Malcor said he had never been hostile to the idea of creating a larger French oil services group, provided CGG was not split up.
"We are absolutely open to consider all opportunities if they make industrial sense," he said.
Technip said last week it was still looking at ways to boost its seismic activities, possibly via acquisitions.
Shares in CGG rose more than 5.8 percent in early trade, the biggest gainers on France's SBF 120 index.
"Our clients remain very careful, so we're focused on cost reduction and understanding what our clients want in terms of capital spending cuts," Malcor told reporters in a conference call.
The group, whose fleet of three-dimensional seismic vessels roam the oceans to map oil fields under the seabed, will cut its fleet to 11 vessels in 2015, after reducing it to 13 from 18 last year.
It also announced an additional cost-reduction plan and a further 25 percent capital expenditure cut for 2015. The group has already reduced its staff by close to 12 percent, or 1,150 people, in 2014, it said.
Malcor said CGG would cut staff by about 400 people around the world in 2015.
Before non-recurring charges, earnings before interest and tax (EBIT) came in at $69 million in the quarter, down from $73 million a year ago.
Operating profit rose to $111 million from $67 million, on revenue which fell to $906 million from $955 million.
Comments
Comments are closed.