CGG - 2Q16 RESULTS

CCG, a listed global player in the geophysical and geological industry, reported 2Q16 results slightly above market expectations. Revenue decreased by 39% yoy to $290m driven by lower sales in all segment with i) -58% in equipment, ii) - 54% in contractual data acquisition and iii) -24% geology, geophysics and reservoir (GGR), the segment with the highest margin. CGG estimates that it kept its leading market share in equipment and still expects some rebound in 2H16 while contractual data acquisition decline resulted from CCG’s near exit of the business. Reported EBITDA decreased by 7% yoy to $104m (36% margin vs. 24% last year), however it benefited from an exceptional €20m R&D tax credit. Excluding it, the yoy decline was 16% (29% margin), still less severe than in the previous quarters culminating with the complete collapse of EBITDA in 1Q16 at $27m (9% margin). EBITDA also supported $5m of cost related to the stacked vessels.​