6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2005
GENERAL COMPANY OF GEOPHYSICS
(Translation of Registrant’s Name Into English)
1, rue Leon Migaux,
91341 Massy
France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes o No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82____________
TABLE OF CONTENTS
COMPAGNIE GENERALE DE GEOPHYSIQUE
Third quarter 2005 results
Operating result of €13M up 25%
Strong growth of backlog at 756M$
Excellent market perspectives for Q4 2005 and 2006
Paris, November 10, 2005
Compagnie Generale de Geophysique (ISIN: 0000120164 — NYSE: GGY) published today its unaudited
consolidated results for the third quarter of 2005.
Pursuant to European regulation n°1606 dated July 19, 2002, the consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
and its interpretations adopted by the International Accounting Standards Board (IASB). They
include comparative information for the period of 2004 using the same standards.
Q3 2005 highlights:
| • |
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Third quarter 2005 Group revenues of Euros 216.7 million, up 30% compared to the third quarter of 2004. |
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| • |
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Group operating profit of Euros 13.0 million compared to Euros 10.4 million in Q3 2004. |
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| • |
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Geophysical Services operating profit of Euros 2.5 million. |
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| • |
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Sercel record quarterly revenues of USD 118 million with operating margin close to 20%. |
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| • |
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Group net income of Euros 5.8 million before specific financial charge compared to a net profit of Euros 4.2
million in Q3 2004. |
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| • |
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Specific financial charge of Euros 23.3 million related to the IFRS accounting treatment of the convertible bond,
as communicated by the Group on October 17, 2005, leading to a negative net result of Euros 17.5 million. |
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| • |
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Record Group backlog of USD 756 million as of November 1st 2005, a 74% year on year increase. |
Comments and Perspectives :
CGG Chairman & CEO, Robert BRUNCK, commented: “The Company activity did strengthen during the third
quarter with Sercel’s sales at a record high and a sustained market demand in all the Geophysical
Services segments. Our offshore fleet operating during the summer principally in North Sea had to
face exceptionally bad weather conditions, which had a negative impact on our operational marine
performance. However, the outlook for the fourth quarter 2005 remains excellent for both Sercel and
Geophysical Services and we are confident that we will reach our 2005 operating profit target. Our
backlog is at a record level and is of excellent quality. During the last industry convention in
Houston, Sercel has launched the 428 XL its new generation of land acquisition systems and its new
marine solid streamer, the Sentinel, for which several orders have already been received. The
integration process of Exploration Resources is developing in line with expectations. The CGG Group
is thus in a good position to reap the benefits of the favourable market conditions we see ahead of
us in 2006 and later.”
Page 2
Consolidated Statement of Earnings
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| IFRS |
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| Million Euros |
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YTD 2005 |
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YTD 2004 |
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Q3 2005 |
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Q3 2004 |
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Operating revenues |
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600.4 |
|
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488.2 |
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216.7 |
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166.8 |
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Gross profit |
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133.0 |
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96.2 |
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46.0 |
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38.3 |
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Operating income (loss) |
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42.5 |
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26.2 |
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13.0 |
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10.4 |
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Equity in income (loss) of affiliates |
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9.6 |
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7.7 |
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2.9 |
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2.9 |
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Cost of financial debt |
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(26.7 |
) |
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(16.8 |
) |
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(7.1 |
) |
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(5.5 |
) |
Variance on derivative on convertible bonds |
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(38.0 |
) |
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(23.3 |
) |
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Other financial income (loss) |
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1.3 |
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(1.4 |
) |
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0.6 |
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2.2 |
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Income taxes |
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(18.2 |
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(15.0 |
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(3.6 |
) |
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(5.8 |
) |
Net income (loss) |
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(29.5 |
) |
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0.7 |
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(17.5 |
) |
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4.2 |
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Net income (loss) per share / diluted in Euros |
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(2.51 |
) |
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0.06 |
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(1.50 |
) |
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0.36 |
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Weighted average number of shares outstanding |
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11.765.118 |
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11.681.218 |
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11.698.623 |
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11.681.718 |
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Revenues:
At Euros 217 million, Group revenues for the third quarter of 2005 were up 30% in Euros and in
USD compared to the third quarter of 2004.
Total Group revenues at the end of September 2005 were Euros 600 million, up 23% in Euros and up
27% in USD, compared to the same period of last year.
Revenues per segment:
Total revenues for Geophysical Services for the third quarter 2005 were Euros 139 million, up 37%
in Euros and in USD compared to the third quarter of 2004. Exploration Resources is consolidated,
starting September 1st with a revenue contribution of Euros 9 million.
Land revenues were Euros 34 million, up 80% in Euros and in USD when compared to the third quarter of 2004. During this quarter, 11 crews were in operation. Offshore revenues of Euros 76 million for the third quarter of 2005 were up 37% in Euros and in USD compared to the third quarter of 2004. Multi-client after sales of Euros 24.1 million were up 55%
year on year. At the end of September, the net book value of the multi-client library was Euros 101 million. For the third quarter 2005, Processing and Reservoir revenues were Euros 30 million, up 9 % in Euros and in USD compared to the third quarter of 2004.
Total revenues for Geophysical Services at the end of September 2005 were Euros 385 million up 41%
in Euros and 46% in USD compared to the same period last year.
For the third quarter of 2005, Sercel total sales were Euros 97 million, up 41% in Euros and in
USD, compared to the third quarter of 2004. External sales for the third quarter of 2005 were Euros
77 million up 18% in Euros and in USD.
Total revenues for Sercel at the end of September 2005 were Euros 256 million, up 12% in Euros and
up 15% in USD compared to the same period last year. External sales at the end of September 2005
were Euros 216 million.
Operating Income:
Page 3
The Group Operating Profit for the third quarter of 2005 was Euros 13.0 million compared to Euros
10.4 million operating profit for the third quarter of 2004.
With Argas contribution, this profit for the third quarter 2005 is Euros 15.9 million compared to
Euros 13.4 million for the same period last year.
The Geophysical Services operating profit for the third quarter of 2005 was Euros 2.5 million
compared to a Euros 1.9 million operating profit for the third quarter of 2004. Including Argas
contribution, this profit for the third quarter 2005 is Euros 5.4 million compared to Euros 4.8
million for the same period last year.
Sercel operating profit for the third quarter of 2005 was Euros 19.2 million compared to Euros 10.9
million for the third quarter 2004, corresponding to close to 20% operating margin.
The Group Operating Profit at the end of September 2005 was Euros 42.5 million compared to Euros
26.2 million operating profit at the end of September 2004.
With Argas contribution, this profit at the end of September 2005 is Euros 52.1 million compared to
Euros 34.0 million at the end of September 2004.
Segment information
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| Million Euros |
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| IFRS |
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YTD 2005 |
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YTD 2004 |
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Q3 2005 |
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Q3 2004 |
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Operating revenues |
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Services |
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385.0 |
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273.1 |
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139.6 |
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101.6 |
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Products |
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256.0 |
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228.9 |
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97.1 |
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69.1 |
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Elimination |
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(40.6 |
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(13.8 |
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(20.0 |
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(3.9 |
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Total |
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600.4 |
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488.2 |
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216.7 |
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166.8 |
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Operating income (loss) |
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Services |
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11.5 |
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(15.5 |
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2.5 |
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1.9 |
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Products |
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49.3 |
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46.5 |
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19.2 |
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10.9 |
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Corporate |
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(8.9 |
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(9.2 |
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(2.5 |
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(3.7 |
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Elimination |
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(9.4 |
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4.4 |
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(6.2 |
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1.3 |
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Total |
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42.5 |
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26.2 |
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13.0 |
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10.4 |
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Net Result :
The Group net result for the third quarter of 2005 was a loss of Euros 17.5 million compared to a
net income of Euros 4.2 million for the third quarter of 2004.
Not including the Euros 23.3 million specific financial charge related to the IFRS accounting
treatment of the convertible bond (variance on derivative of the convertible bonds), as
communicated by the Group on October 17, 2005, the net result for the third quarter 2005 is a
profit Euros 5.8 million.
The Group net result at the end of September 2005 was a loss of Euros 29.5 million compared to a
net income of Euros 0.7 million for the same period last year.
Not including the Euros 38.0 million specific financial charge related to the IFRS accounting
treatment of the convertible bond (variance on derivative of the convertible bonds), the net result
at the end of September 2005 is a profit of Euros 8.5 million.
These specific financial charges have no effect on the Group operating result, or on cash flows.
Page 4
Group net result
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| Millions Euros |
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End of September |
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Q3 |
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| IFRS |
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2005 |
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2004 |
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2005 |
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2004 |
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Net income before variance on derivative of CB |
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8,5 |
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0,7 |
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5,8 |
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4,2 |
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Variance on derivative of the convertible bonds (CB) |
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(38.0 |
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0.0 |
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(23.3 |
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0.0 |
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Net income (loss) |
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(29,5 |
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0,7 |
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(17,5 |
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4,2 |
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Operating Result Before Depreciation and Amortization :
The Operating Result Before Depreciation and Amortization, “ORBDA”, previously denominated
“Adjusted EBITDA” in our former financial reports, is defined as operating income (loss) excluding
non-recurring revenues (expenses) plus depreciation, amortization and additions (deductions) to
valuation allowances of assets and add-back of dividends received from equity companies.
The notion of ORBDA serves as a reference for CGG debt covenants and is consequently communicated
for that purpose.
The ORBDA for the third quarter of 2005 was at Euros 49.4 million, representing 22.7% of revenues
and a 23% increase year on year.
The ORBDA at the end of September 2005 was at Euros 146.4 million, representing 24% of the revenues
and up 24% year on year.
ORBDA
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| Million Euros |
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End of September |
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Q3 |
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| IFRS |
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2005 |
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2004 |
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2005 |
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2004 |
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ORBDA |
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146.4 |
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118.4 |
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49.4 |
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40.0 |
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Summary of cash-flows:
Cash flows
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| IFRS |
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| Million Euros |
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YTD 2005 |
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YTD 2004 |
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Q3 2005 |
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Q3 2004 |
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Net cash before changes in working capital |
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118.7 |
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93.5 |
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39.1 |
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33.8 |
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Net cash flow provided by operating activities |
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109.3 |
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77.0 |
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31.4 |
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3.9 |
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Total purchases of tangible and intangible assets |
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(82.4 |
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(40.5 |
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(32.1 |
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(13.0 |
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Investment in multi —clients surveys |
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(19.2 |
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(39.8 |
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(4.2 |
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(12.4 |
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Balance Sheet items:
As of September 30th 2005, net equity was Euros 390.9 million after the specific IFRS
accounting treatment of the convertible bonds which requires the Company to recognize a non current
liability of Euros 72 million. After the acquisition of Exploration Resources net financial debt
was Euros 500.5 million, representing a 128% gearing ratio.
Equity and Net Debt
Million Euros
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| IFRS |
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30/09/ 2005 |
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31/12/2004 |
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Shareholders’ equity |
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390,9 |
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395,6 |
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Net financial debt |
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500,5 |
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121,8 |
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Gearing ratio |
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128 |
% |
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30,8 |
% |
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Page 5
Backlog :
The backlog as of November 1st 2005 was at the record level of USD 756 million, up 74%
compared to November 1st 2004.
Contact : Christophe BARNINI (33) 1 64 47 38 10 / (33) 1 64 47 38 11
The information included herein contains certain forward-looking statements within the meaning of
Section 27A of the securities act of 1933 and section 21E of the Securities Exchange Act
of 1934. These forward-looking statements reflect numerous assumptions and involve a number of
risks and uncertainties as disclosed by the Company from time to time in its filings with the
Securities and Exchange Commission. Actual results may vary materially.
The Compagnie generale de Geophysique group is a global participant in the oilfield services
industry providing a wide range of seismic data acquisition. processing and geoscience services and
software to clients in the oil and gas exploration and production business. It is also a global
manufacturer of geophysical equipment through its subsidiary Sercel..
Page 6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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COMPAGNIE GENERALE DE GEOPHYSIQUE
1, rue Leon Migaux
91341 — Massy Cedex |
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GENERAL COMPANY OF GEOPHYSICS |
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| Date : November 10, 2005 |
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By Senior Executive Vice President
Technology, Control, corporate planning &
Communication
/Gerard CHAMBOVET/ |
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