CGG - comment

Good numbers and some good news for bondholders. CGG generated cash in both the final quarter and for the full year. Management is going to buy $30m of its bonds in 2024. The Data business is forecast to remain strong over the next two years. Equipment is still waiting for the uptick in Streamer (marine) orders, but for now, there is a high reliance on onshore mega crews (particularly in the Middle East). 

Q4 revenue was in line with our forecast, although Data was ahead on strong external geodata, and Equipment was lower as some orders slipped into Q124. EBITDA was ahead of our modelling on a better-than-expected ED performance. Net Cash Flow beat our expectations by $68m, $36m from working capital on lower-than-expected inventory levels and $30m from lower capex/investment. In 2024, CGG expects to generate a similar cash flow (rising to $100m in 2025). The company is targeting $30m of bond buybacks in 2024 and a refinance in Q1 26. The company has not decided whether this will be a tender or via market buyback. The minimum required cash on hand is now $100m, giving the company more scope to manage its liabilities.