TGS (TGS) Q2 2024 earnings summary

Executive summary

• Q2 2024 POC revenues were $215 million, down from $241 million year-over-year, with a 94% early sales rate and late sales of $66 million.

• Proprietary revenues were $100 million, EBIT was $28 million, and a record $368 million in new contracts were signed, raising backlog to $611 million.

• The PGS acquisition was completed on July 1, 2024, with integration underway and substantial synergies expected.

• Significant activity occurred across all major basins, including the U.S. Gulf of Mexico, Atlantic margin, Asia-Pacific, and new onshore/offshore wind initiatives.

• Multi-client & Imaging revenues were $164 million, and Digital Energy Solutions contributed $18 million.

Financial highlights

• IFRS revenues for Q2 2024 were $224.3 million, up 9% year-over-year; EBITDA rose 35% to $130.7 million.

• Net income increased 56% to $35.2 million; EPS was $0.27, up from $0.18 in Q2 2023.

• Operating profit (EBIT) was $54.6 million, up from $23.0 million year-over-year.

• Cash and cash equivalents at quarter-end were $125 million, with net cash from operations at $89.1 million.

• Dividend of $0.14 per share declared for Q3 2024, with over $1.5 billion returned to shareholders since 2010.

Outlook and guidance

• Early sales and revenues are expected to improve in H2 2024, with multi-client investments set to rise to $120 million in Q3.

• Integration of PGS expected to deliver $100 million in annual synergies; new organizational model in place.

• Strong contract inflow and backlog position the company for increased activity and revenue growth in H2 2024 and 2025.

• Board resolved to maintain dividend at $0.14 per share for Q3 2024.

• More details on combined guidance, capital allocation, and reporting structure will be provided at the August 29 Capital Markets Day.