OSLO Norway (13 April 2021) - Based on preliminary reporting from operating units, TGS management expects net IFRS revenues* for the first quarter of 2021 to be approximately USD 186 million, up from USD 52 million in Q1 2020. Net segment revenues* are expected to be approximately USD 75 million, compared to USD 152 million in Q1 2020.
Kristian Johansen, CEO at TGS, stated, "As expected the challenging market conditions continued in Q1 2021. However, we remain cautiously optimistic for the remainder of the year, with the higher oil prices expected to result in higher activity level in the latter part of the year. Furthermore, I am pleased to note that we continue to outperform our cost expectations, which together with relatively low investments of approximately USD 37 million, resulted in a solid free cash flow and a cash balance in excess of USD 250 million at quarter close. Thus, our confidence in a strong cash flow development for the year continues to grow."
TGS will report the Q1 2021 financial results on 12 May 2021.
* Following recent notification from The Financial Supervisory Authority of Norway (Finanstilsynet) TGS will from 2021 increase emphasis on IFRS in its financial reporting to the market. The Company will continue to provide segment information for historic comparison and as alternative performance measures of the business as such measures are commonly used throughout the industry, and TGS' management believes they better reflect the ongoing activity in projects-in-progress. The main difference between IFRS and Segment reporting relates to revenue recognition. Under IFRS revenue recognition generally is deferred until project completion and delivery to the customer when performance obligations are met. Under Segment reporting, net revenue from projects-in-progress is recognized based on Percentage of Completion (POC). Revenue recognition has subsequent effects on the recognition of amortization of the multi-client library. Please see annual report for a complete description of the Company's accounting principles.
Adjustments between preliminary IFRS and Segment revenue numbers for Q1 2021:
Preliminary IFRS reported revenue: USD 186 million
- Revenue recognized from performance obligations met during Q1 for completed projects: USD 157 million
+ Revenue recognized under POC during Q1: USD 46 million
= Preliminary net segment reported revenue: USD 75 million
For more information, visit TGS.comor contact:
Sven Børre Larsen
SVP Strategy
Tel: +47 90 94 36 73
E-mail: investor@tgs.com
