TGS (TGS) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the first quarter post-merger with PGS, resulting in full consolidation, significant scale-up in operations, and strong financial performance amid geopolitical and macroeconomic uncertainty.

• Total revenues reached $501 million, up 71% year-over-year, with EBITDA at $280 million and EBIT at $104 million.

• Integration synergies are ahead of schedule, with $55 million annual run-rate realized and total expected synergies of $110–130 million by end-2025.

• Credit ratings were substantially upgraded by Moody's and S&P, supporting future refinancing efforts.

• Dividend maintained at $0.14 per share for Q4 2024.

Financial highlights

• Produced revenue: $500.9 million in Q3 2024, up from $292.5 million in Q3 2023; EBITDA was $280 million, and EBIT was $104 million.

• Net income was $37.5 million, more than doubling from $16.8 million in the prior year; EPS (diluted) at $0.19.

• Cash flow from operations was $265 million, with a quarter-end cash balance of $214 million.

• Free cash flow reached $54 million, up from $31.7 million year-over-year.

• Order inflow was $423 million, with a backlog of $750 million at quarter-end.

Outlook and guidance

• Multi-client investment guidance for 2024 reduced to $425–450 million, with some projects deferred to 2025.

• Q4 2024 guidance: normalized OBN crew count of 3.5, streamer 3D fleet utilization around 70%.

• 2025 streamer vessel utilization anticipated to be significantly higher than 2024.

• Long-term growth expected in seismic industry, supported by sustained oil & gas demand and need for high-quality subsurface data.

• Geopolitical tensions and oil price volatility noted, but energy companies' investment plans remain robust.