TGS (TGS) Q4 2023 earnings summary

Executive summary

• FY2023 pro forma POC revenue was $968 million, up 14% YoY; Q4 POC revenue declined as weaker late sales offset stronger early and proprietary sales.

• Q4 contract inflow was $275 million; POC backlog, including acquisition backlog, reached $545 million, 21% above a year earlier.

• 2024 priorities include improving sales-to-investment ratio, cash flow and returns, with multi-client investment guided at $300–350 million.

Financial highlights

• Q4 IFRS revenue was $189.4 million, down 14% YoY; EBITDA was $120.7 million versus $143.5 million.

• Q4 IFRS operating profit was $10.9 million versus $65.9 million; net loss was $9.1 million versus net income of $43.4 million.

• Q4 POC revenue was $205.9 million versus $226.9 million; POC EBITDA was $137.3 million versus $151.4 million, and EBIT was $46.6 million versus $73.6 million.

• FY2023 IFRS revenue was $794.3 million versus $716.6 million; net income was $21.6 million versus $88.0 million, and diluted EPS was $0.17 versus $0.74.

• Q4 operating cash flow was $147.6 million versus $119.2 million; free cash flow was $38.2 million versus $37.1 million.

Outlook and guidance

• 2024 multi-client investment guidance is $300–350 million; the POC early sales rate target is at least 85% of investment.

• Exploration spending is expected to grow more slowly in 2024 than in the prior two years, with a larger share directed to offshore basins.

• E&P guidance cited 12% spending growth in 2024 versus 7% in 2023; mid- and deepwater OBN market revenue is expected to grow.