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 results, with total revenues of $501 million, up 71% year-over-year.

• EBITDA reached $280 million (or $296 million adjusted for merger-related costs), and EBIT was $104 million ($120 million adjusted), both showing double-digit growth compared to Q3 2023.

• Merger integration synergies are ahead of schedule, with $55 million annual run-rate realized and a target of $110–$130 million by year-end 2025.

• Credit ratings were substantially upgraded by Moody’s and S&P, enhancing refinancing prospects.

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

Financial highlights

• Produced revenue: $500.9 million in Q3 2024 vs $292.5 million in Q3 2023; multi-client sales were $277 million, contract revenues $291 million, and NES revenues $19 million.

• Net income was $37.5 million, more than doubling from $16.8 million in Q3 2023; EPS at $0.19.

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

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

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

Outlook and guidance

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

• Q4 2024 guidance: normalized OBN crew count ~3.5, streamer 3D fleet utilization ~70%, multi-client investment $100–$125 million.

• Improving streamer utilization anticipated for 2025; OBN market remains strong.

• Clients indicate seismic spending plans for next year are expected to see low single-digit growth.

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