TGS Announces Q1 2020 Results

ASKER, NORWAY (13 May 2020) – TGS today reported net segment revenues of USD 152 million for Q1 2020, a 3% decline compared to Q1 2019. The quarter saw solid pre-funding revenues driven by Latin America and North America onshore, while late sales were hurt by the COVID-19 crisis and the large oil price drop towards the end of the quarter.

At USD 125 million, EBITDA* in Q1 2020 came in 1% above Q1 2019 as a result of favorable development in operating costs.

TGS continues to deliver industry-leading Return on Average Capital Employed (ROACE) with 17% annual return as per the end of Q1 2020.

TGS’ balance sheet remains strong, with a cash holding of USD 248 million at 31 March 2020, allowing the Company to pay a dividend of USD 0.125 per share in Q2 2020, despite the challenging market conditions.

On 8 April 2020 TGS announced several measures in response to the market turmoil. The highlights are:

• Cost reduction: Centralization of offices, a global salary freeze, temporary cessation of employee bonuses and right sizing of the organization leading to a 2020 cost base that is approximately 35% below the 2019 pro-forma numbers
• Multi-client investments: 2020 guidance reduced to approximately USD 325 million from USD 450 million by postponing projects and reducing scope
• Dividends: Q2 2020 dividend reduced to USD 0.125 per share from USD 0.375 per share in Q1 2020

“Q1 2020 was impacted by the COVID-19 crisis and the sharp drop in oil price. Protecting the health and safety of our employees at the same time as ensuring minimal disruption to the business have taken top priority, and in that regard, I’m extremely pleased with how the organization has performed during these challenging times. With the announced measures to protect cash flow the Company is well positioned to use the difficult market conditions to form the basis for further long-term value creation and continued industry-leading returns.”   

A pre-recorded presentation of the Q1 2020 results by CEO Kristian Johansen and CFO Fredrik Amundsen can be found at www.tgs.com or at this web address: https://www.tgs.com/hubfs/Quarterly%20earnings%20releases/Q1%202020%20 ...

CEO Kristian Johansen and CFO Fredrik Amundsen will host a conference call today at 1500 CEST to go through the results and answer questions. We encourage attendees to call in 5-10 minutes before 1500 CEST to ensure registration and access.